Immigrant earnings growth: Selection bias or real progress?

Abstract

We use longitudinal tax data linked to immigrant landing records to study the effect of selective attrition on the estimated earnings assimilation of immigrants to Canada. Contrary to findings in the existing international literature, we show that the immigrant-native earnings gap closes at the same pace in longitudinal and cross-sectional data. Low-earning immigrants are likely to leave the cross-sectional samples over time, but the same is true for the native born. Our study suggests that immigrants to Canada have labour market participation dynamics similar to those of the native born.