More Canadian Immigrants Are Working Jobs They Are Overqualified for Compared to the U.S

Report Finds 35 Per Cent of Canadian Newcomers Are Overeducated for Their Current Jobs

A recent report from Statistics Canada has revealed that newcomers to Canada are far more likely to be “over-educated” for jobs than immigrants who have settled in the United States.

The term “overeducation” in the context of the report refers to immigrants who hold a Bachelor’s degree, Master’s, or Ph.D., but are working jobs that only require a high school diploma or no education at all.

The study, which was first reported on by iPolitics, found that 35 per cent of working-age, university-educated immigrants who settled in Canada within the last 10 years had much higher than the minimum educational requirements for the jobs that they held.

Down in the U.S, only 21 per cent of immigrants were found to be over-educated for their jobs.

So, why is this? Compared to the U.S, the report found that “Canada’s industrial structure is less knowledge-intensive and has a weaker demand for university-educated workers.”

Also, in the U.S, most university-educated immigrants were handpicked and sponsored by individual employers.

But in Canada, up until the early 2010s, the majority of university-educated immigrants in Canada were admitted using a points system that selected applicants based on characteristics such as education, language, age, and work experience.

Canada’s process of selecting immigrant applicants based on factors such as education has resulted in a significant number of university-educated immigrants “relative to labour market demand for skilled workers in Canada than in the United States.”

“The differences in supply–demand balance and how new immigrants are selected could affect immigrants’ relative performance in the labour market in the two countries,” the report continued to read.

What this means is that immigrants with higher levels of education are given preference, but aren’t being offered jobs they are qualified for, leading to a decrease in productivity among workers.

“Overeducation leads to inefficient use of human capital and lost productivity,” the report stated, adding that productivity is incredibly important to economic growth, wage increases, and improved standard of living.

It’s also important to note that this data reflects a more recent shift, as the gap between education levels and labour market needs for immigrants who arrived more than a decade ago was much smaller.

In fact, 10 years ago, only 21 per cent of Canadian immigrants were found to be over-educated, compared to 18 per cent for U.S newcomers.

So why the change? That part is unknown. But what can be drawn from the Statistics Canada report is that more can be done to support highly educated immigrants and find ways to better link our immigration system to Canada’s economic needs.