Education, credentials, and immigrant earnings

Abstract

Using 1981 to 2001 Census data, we study how the human capital of immigrants is rewarded in Canada. We distinguish between years of schooling and degrees obtained in order to estimate 'sheepskin' effects - the gain in earnings associated with receipt of a degree, controlling for years of schooling. We find that immigrant years of schooling and immigrant work experience accumulated before arrival is valued much less than Canadian experience of comparable natives. However, for immigrants the increase in earnings associated with completing educational programs is generally higher than that of comparable natives. We provide both signalling and human capital interpretations of this finding. © 2008 The Canadian Economics Association.