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Anil Verma University of Toronto Jeffrey G. Reitz University of Toronto Rupa Banerjee

Unionization, Race, Immigrants and Earnings: A Longitudinal Examination of the Effect of Union Membership on the Earnings of Immigrants to Canada. Anil Verma University of Toronto Jeffrey G. Reitz University of Toronto Rupa Banerjee Ryerson University.

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Anil Verma University of Toronto Jeffrey G. Reitz University of Toronto Rupa Banerjee

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  1. Unionization, Race, Immigrants and Earnings:A Longitudinal Examination of the Effect of Union Membership on the Earnings of Immigrants to Canada Anil Verma University of Toronto Jeffrey G. Reitz University of Toronto Rupa Banerjee Ryerson University

  2. Canada: Immigration and Race Relations • Continuing aggressive Canadian immigration program for nation-building: • 250,000 per year • 3 times per capita U.S. immigration rate • 18.9 percent of population • Increased racial diversity since 1970 • 13.4 percent ‘visible minorities’ in 2001 • Largest: Chinese, South Asians and Blacks • Concentration in Toronto, Vancouver and Montreal • Toronto now 37 percent ‘visible minority’

  3. Immigrants and Earnings • Initial earnings disadvantage (‘entry’ effect): 15-45% • Earnings growth: • immigrant earnings gap decreases over time (‘catch-up’) • Persistent gap: • immigrants do not fully close the gap after many years

  4. The Unionization Question • Does access to or holding of a unionized job help immigrants close the income gap? • Unions have historically pursued the interests of the disadvantaged • If immigrants have better access to unionized jobs, the income gap would be smaller

  5. Contributions of this Study • Longitudinal Data: most studies have used cross-sectional data • Earnings patterns of previous cohorts may not predict the expected wage progression of newer immigrants • Cross-sectional analyses may be biased if success in the host country affects immigrants’ decision to return home • Follow the same group of people over time • Focus on the effect of unionization for recent immigrants

  6. Research Questions Does holding a unionized job: • … reduce the income gap at the beginning of the period? • … result in faster growth in the income of immigrants?

  7. Survey of Labour and Income Dynamics (SLID) • Longitudinal survey with three panels: • 1993-1999 • 1996-2001 • 1999-2004 • Variables includes earnings, union membership, immigration status and racial origins • Approx. 25,000 households in each panel • Under-sampling of immigrants and minorities

  8. Data Restrictions Included only those with earnings in at least 2 of the 5 years of each the panels Included only those between 20 and 60 Recent immigrants ≤ 10 years With these, n=~38,000

  9. Variables • Dependent Variable: • Log of annual incomeit in constant 2004 dollars • Independent Variable: • Union statusit • White recent immigrant statusi • Visible minority recent immigrant statusi • White native-born Canadian statusi is reference category

  10. Gender Years of work experience Post-secondary education Province Size of city/town Number of jobs held Marital status Number of pre-school children Hours worked per year First language Control Variables

  11. Descriptive Stats Year 1

  12. Earnings Growth Years 1 to 6

  13. Unionization Years 1 to 6

  14. Years in the Union

  15. Growth Curve Modeling • Specialized application for longitudinal data • Describes and predicts within and between-person differences in the time trajectory of a response variable • Growth model is estimated at 2 levels: • Level 1: within-person trajectory of growth • Level 2: between-person differences in growth are examined

  16. Growth Curve Modeling Using year by year OLS modeling, we lose up to ~11,000 respondents Using growth curve modeling, we lose only ~3,000 respondents; a net gain of ~8,000 Allows for time-varying co-variates

  17. Main Effects: Growth Model of Logged Annual Income, Years 1 to 6

  18. Interaction Effects: Growth Model of Logged Annual Income, Years 1 to 6

  19. Effect of Unionization on Recent Immigrants’ Earnings

  20. Summary of Findings • Visible Minority recent immigrants start off with significant initial disadvantage, AND they do not have faster earnings growth than native born workers • White recent immigrants start off with less initial disadvantage, AND have faster earnings growth than native born workers

  21. Summary of Findings • Unionization improves all workers’ initial earnings, HOWEVER; • Visible minority recent immigrants benefit less than native born workers • White recent immigrants receive similar benefits to unionization as their native born counterparts • Unionization does not have an effect on earnings growth for any of the groups

  22. Implications for Unions • Unions have historically pursued the interests of the disadvantaged • Unions are currently losing ground in terms of density • Immigrants account for almost all the growth in the labour force • Unions need to find ways to champion their cause

  23. Questions and Comments

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