A Comparison of the U.S. and Canadian Immigration Systems

Pia Orrenius and

Madeline Zavodny

The views expressed here are here are solely those of the authors and do not reflect those of the Federal Reserve Bank of Dallas or the Federal Reserve System

Overview

• Canada and the United States have very different admissions policies

• Canada has better-educated and younger immigrants than the United States

• Nonetheless, there are concerns about Canadian immigrants’ economic success – These concerns have led to a number of changes in

immigration policy in Canada – Early indicators suggest those policy changes are positive

Canada has a higher foreign-born share than the U.S.

0%

5%

10%

15%

20%

25%

1900-01 1910-11 1920-21 1930-31 1940-41 1950-51 1960-61 1970-71 1980-81 1990-91 2000-01 2010-11

Source: US Census Bureau; Statistics Canada; Canadian data correspond to the year after the U.S. Census

21%

13%

U.S.

Canada

Canada admits more permanent residents relative to its population

0.0%

0.5%

1.0%

1.5%

2.0%

1940 1950 1960 1970 1980 1990 2000 2010

Source: US Department of Homeland Security and US Census Bureau; Citizenship and Immigration Canada

Canada

U.S.

Immigrants are more educated in Canada

0

0.5

1

1.5

2

2.5

3

3.5

Not completedhigh school or

equivalent

Completed highschool, no college

Some college Bachelor's degree Graduate degree

Canada US

Source: Calculations based on 2011 American Community Survey (US) and 2011 National Household Survey (Canada); only includes people aged 25 and older

Ratio of foreign born share to native born share

Family-based

Employment-based or economic

Humanitarian

Other

Canada U.S.

Source: U.S. Department of Homeland Security; Citizenship and Immigration Canada; average of new permanent residents over 2009-2013 for both

Family-based Employment-based or economic

Humanitarian

Other

Employment-based immigration is more important in Canada

Managerial & professional

Sales, office and service

Trades & laborers

Children & students

Retired

Not planning to work or unemployed

Canada

U.S.

Managerial & professional

Sales, office & service

Trades & laborers

Children & students Retired

Not planning to work or

unemployed

Source: U.S. Department of Homeland Security; Citizenship and Immigration Canada; average of new permanent residents over 2008-2012 for both; does not include unknown occupation or “new workers” or entrepreneurs

U.S.

More new immigrants are in managerial & professional occupations in Canada

60% 40% 20% 0% 20% 40% 60%

0-4

5-9

10-14

15-24

25-44

45-64

65+

Source: U.S. Department of Homeland Security; Citizenship and Immigration Canada; average of new permanent residents over 2008-2012 for both

New immigrants to Canada are more likely to be working age

Canada U.S.

So what’s the catch?

• Canadian immigrants are highly geographically concentrated

• Skills don’t necessarily match employers’ needs – Education and experience acquired abroad not highly

valued – Concerns about language skills despite point system

Foreign born are geographically concentrated in both countries

Source: Calculations based on 2011 American Community Survey (U.S.) and 2011 National Household Survey (Canada)

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

Natives Foreign born Natives Foreign born

Mobility rates are lower in Canada

Canada U.S.

Source: Calculations based on 2011 American Community Survey (U.S.) and 2011 National Household Survey (Canada); among those in country last year, share living in a different state or province this year

Percent moving states or provinces

Low mobility even among college graduates in Canada

Canada U.S.

Source: Calculations based on 2011 American Community Survey (U.S.) and 2011 National Household Survey (Canada); among those in country last year aged 25 and older with a least a bachelor’s degree, share living in a different state or province this year

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

Natives Foreign born Natives Foreign born

Percent moving states or provinces

Ratio of foreign-born share to native-born share

0

0.5

1

1.5

2

2.5

3

At least bachelor's degree PhD

Immigrants are more likely to work in STEM occupations in the U.S.

Canada U.S.

Source: Calculations based on 2011 American Community Survey (U.S.) and 2011 National Household Survey (Canada); only includes people aged 25 and older

Source: Calculations based on 2011 American Community Survey (U.S.) and 2011 National Household Survey (Canada); only includes people aged 25 and older

0%

10%

20%

30%

40%

50%

60%

70%

At least bachelor's degree PhD

But Canada relies more on immigrants for STEM workers

Canada U.S.

% of STEM workers foreign born

How Canada admits economic class immigrants has changed

• Provincial Nominee Programs created in 1990s – Allow provinces to select immigrants – Most nominees have job offers or desired skills – Many nominees not highly educated

• Canadian Experience Class created in 2008 – Allows temporary foreign workers and international

students to stay – Primarily—but not exclusively—for skilled occupations

• Federal Skilled Trades Program created in 2013

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Canadian experience class Provincial nomineesSkilled workers Entrepreneurs, investors and self-employedLive-in caregivers

Provincial nominees and Canadian experience class are growing in Canada

Source: Citizenship and Immigration Canada

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Newfoundland and Labrador Prince Edward Island Nova ScotiaNew Brunswick Quebec OntarioManitoba Saskatchewan AlbertaBritish Columbia Territories

Source: Citizenship and Immigration Canada. Numbers for 2013 are preliminary.

Permanent residents’ destinations are more diverse

Source: U.S. State Department; Citizenship and Immigration Canada; does not include TN (NAFTA) visas or entries

Use of temporary worker visas has increased faster in Canada

Relative to 2003 level

1

1.2

1.4

1.6

1.8

2

2.2

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Canada

U.S.

Source: U.S. State Department; Citizenship and Immigration Canada; does not include TN (NAFTA) visas or entries; H-2 visas considered low-skilled in US; LMO visas considered low-skilled in Canada

Skilled workers dominate temporary worker visas in U.S.

Skilled worker share of temporary visas

30%

40%

50%

60%

70%

80%

90%

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Canada

U.S.

More permanent residents adjust from temporary visas in U.S.

Source: U.S. Department of Homeland Security; Citizenship and Immigration Canada

0%

10%

20%

30%

40%

50%

60%

70%

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Canada

U.S.

Share of employment-based principals adjusting from temporary visas has risen

Source: U.S. Department of Homeland Security; Citizenship and Immigration Canada

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Canada

U.S.

Early indicators are positive for new programs in Canada

• Provincial Nominee Program – Good within-province retention rates – Immigrants have high initial earnings &

employment rates • Canadian Experience Class

– Targeted groups have high initial earnings & employment rates

– Also high returns to education & experience

Canada

• Increased point system’s emphasis on age, language ability, and job offers; reduced emphasis on education

• Shift in admissions from point system to Provincial Nominee Programs

• Created the Canadian Experience Class

• Created the Federal Skilled Trades Program

• Overhauled the temporary foreign worker program

• Eliminated federal immigrant investor & entrepreneur programs

• Launching the Express Entry system in 2015

Canada’s immigration system is more fluid, flexible

Canada U.S.

• Increased point system’s emphasis on age, language ability, and job offers; reduced emphasis on education

• Relaxing work rules for spouses of H-1B visa holders if green card application in process

• Shift in admissions from point system to Provincial Nominee Programs

• Created Deferred Action for Childhood Arrivals (DACA) program

• Created the Canadian Experience Class

• Created the Federal Skilled Trades Program

• Overhauled the temporary foreign worker program

• Eliminated federal immigrant investor & entrepreneur programs

• Launching the Express Entry system in 2015

Canada’s immigration system is more fluid, flexible

Canada U.S.

• Open permits for International Mobility Program workers; Temporary Foreign Worker Program workers tied to employer

• Almost all temporary foreign workers tied to employer

• Spouses of skilled workers can work for any employer; spouses of low-skilled workers subject to labor market testing

• Few spouses allowed to work without own work visa

• Few rigid quotas • Quotas for H-1Bs, H-2Bs exhausted every year for a decade

• Dual intent allowed for almost all visas except seasonal agricultural workers

• No dual intent for H-2A or H-2B; technically students cannot be dual intent

• Students can work for up to 3 years after graduation

• Students receive 12 months OPT after graduation; 29 months for STEM grads

Canada’s temporary visa programs are more flexible

Canada U.S.

• Temporary foreign workers require Labor Market Impact Assessment (LMIA); International Mobility Programs do not - LMIA includes prevailing wage and recruitment requirements; employers must attest that hiring temporary foreign workers will not result in outsourcing or offshoring

• Labor Condition Application with employer attestation for H-1B visa - Prevailing wage requirement - “Does not adversely affect wages and working conditions” of similar workers

• Essentially no labor market testing for most economic class permanent residents - Must meet work experience and occupation requirements - Federal Skilled Trades Program requires LMIA

• Labor certification via PERM for EB-3 green cards - Recruitment requirements to ensure no U.S. workers who are able, willing, qualified and available - Prevailing wage requirement - “Does not adversely affect wages and working conditions” of similar workers

Canada’s labor market testing focuses on temporary, not permanent, immigrants

Canada U.S.

China Skilled worker Provincial nominee

21 months 25 months

China EB-2 EB-3

59 months 70 months

India Skilled worker Provincial nominee

22 months 16 months

India EB-2 EB-3

64 months 130 months

Philippines Skilled worker Provincial nominee

20 months 12 months

Philippines EB-2 EB-3

No backlog 41 months

Mexico Skilled worker Provincial nominee

33 months 17 months

Mexico EB-2 EB-3

No backlog 41 months

Canadian Experience Class 13 months

Backlogs for permanent resident visas are shorter in Canada, but still long

Lessons from Canada

• A point system may not be the answer • Too early to know whether new programs go far

enough – Early indicators on the Provincial Nominee Program are

positive – Canadian Experience Class is growing

• Importance of policy responsiveness

Canada U.S.

Philippines 12.1% Mexico 14.6%

China 11.7% China 7.1%

India 10.5% India 6.1%

U.S. 3.8% Philippines 5.3%

UK 3.2% Dominican Republic 4.1%

Pakistan 2.7% Cuba 3.6%

France 2.7% Vietnam 2.9%

Iran 2.5% Colombia 2.3%

South Korea 2.2% South Korea 2.2%

Morocco 1.8% Haiti 2.2%

Top origin countries of permanent residents overlap somewhat

Source: U.S. Department of Homeland Security; Citizenship and Immigration Canada; average over 2008-2012 for both

Canada U.S.

China 8.6% Mexico 29.0%

India 8.2% India 6.2%

UK 7.9% China 5.6%

Top origin countries of all foreign born also overlap somewhat

Source: 2011 American Community Survey (for U.S.); 2011 National Household Survey (for Canada)

Source: Calculations based on 2011 American Community Survey (U.S.) and 2011 National Household Survey (Canada)

Foreign born as a whole slightly more likely to work in managerial & professional occupations

in Canada Managerial & professional

Services, office & service

Trades & laborers

Children & students

Retired

Unemployed or not in labor

force

Managerial & professional

Services, office & service

Trades & laborers

Children & students

Retired

Unemployed or not

in labor force

Canada U.S.

Foreign born are geographically concentrated in both countries