Why Do Recent Immigrants to Canada Struggle in the Labour Market? New Evidence from a Field Experiment Using Six Thousand Résumés

Transcription

1 Why Do Recent Immigrants to Canada Struggle in the Labour Market? New Evidence from a Field Experiment Using Six Thousand Résumés Philip Oreopoulos University of British Columbia National Bureau of Economic Research Canadian Institute for Advanced Research With thanks for support from Metropolis Vancouver

2 Unemployment and Earnings Differences Between Recent Immigrants and Natives Aged 25 to 39 From the 2001 Census

3 Recent immigrants to Canada are struggling in the labour market. Average earnings for Canadian-Born are 40-60% higher than for recent arrivals Gap has been getting larger not only over last 30 years, but over last 5 years This, despite a shift towards accepting more immigrants under skilled status (the point system) and a dramatic rise in holders of university degrees E.g. % male immig. with a univ degree increased from 24.5% in 1980 to 58.2% in For Canadian-born male earners, the corresponding percentages were 14.1% and 19.9%, respectively.

4 Why is this happening? especially to immigrants being let in under skilled status (the point system)? The usual suspects: Foreign experience valued less Foreign education valued less Language difficulties Culture differences Poor access to job networks Lower returns to Canadian experience Taste -Discrimination (e.g. hiring workers more likely to get along )

5 Previous research Past work uses worker-survey data to decompose differences in relative wages between differences in basic demographic characteristics (year of arrival, country of origin, years spent in Canada, years of education) Recent studies seem to suggest lower immigrant wages due to lower value placed on foreign experience Problem 1: Immigrants and Canadian-Born that appear similar to researchers may look very different to employers (e.g. unobserved reasons why some immigrate sooner). Problem 2: Data limited (does not facilitate analysis of diff. kinds of discrimination, language diff, skill diff, )

6 Now for something different Field experiment with 8,000 mock resumes, ed in response to newspaper and online job postings Randomize name, experience, education, and other characteristics, send, and compare callback rate differences Builds on previous U.S. audit studies. Focus on immigrants (in Canada). Some recent work has looked at immigrants in Sweden (Dan-Olof Rooth et al.) Offers clear and convincing evidence on why recent immigrants fare poorly in the Canadian labour market

7 Example: Different experience Names

8 Example: Different name

9 What are resume audit studies? Field experiments to test how characteristics on resume affect decisions to contact applicant for job interview Similarities and differences btw applicants perfectly known Relatively Cheap, so sample can be large Bertrand and Mullainathan (2004) Resumes with randomly assigned white sounding names receive 50% more callbacks than resumes with black sounding names Other resume audit studies: Swedish names versus middle-eastern names in Sweden Old versus young (by date of HS graduation) Mother/Father versus single (by extracurricular activities) This one: First audit study to look at immigrants that differ from natives by potentially more than one factor First resume audit study in Canada

10 Set-up Respond only to internet or newspaper postings (e.g. Workopolis, Job Bank, Craigslist, ) May Nov resumes per posting, sent over 2-3 days, with order randomized: 0: Can. name, Can. education, Can. experience 1: foreign name, Can. education, Can. Exp. 2: foreign name, foreign education, Can. Exp. 3: 4: foreign name, foreign educ., foreign exp. Include additional credentials to all resumes if required, or random subset if not required (e.g. CGA, Flash experience)

11 What I randomize (1) address (yahoo or google) subject line Introduction Cover Letter

12 What I randomize (2) name (24 male/female common names from Canada, China, India, Pakistan, Britain) Address (4 in mississauga, 1 in toronto, 3 apartments, 2 houses Personal statement (or not) {occupation specific} Profile (or not) {occupation specific} Experience set (of last 3 jobs, all with 4-6 years) {occupation specific} City/country of experience ~50% company names the same, otherwise try to use equivalent in type/size

13 What I randomize (3) University (different qualities and countries) Degree (1 of 2 or 3) {occupation specific} Extracurricular activities (or not) Fluent in French (and English and Mother Tongue) References (or not): used for space filler Canadian masters degree for 20% of resumes (occupation specific)

14 What I randomize (4) Resume template (1 of 5)

15 Application restrictions Employer must accept direct Job position within driving distance of Toronto Apply only to jobs requesting 3-7 years experience Apply to jobs requiring PSE, but not if masters min. requirement Don t apply if French required

16 Names (picked from list of mostcommon names)

17 Finding 1: Canadian-born individuals with English-names are much more likely to receive a callback compared to foreign born individuals, but not from Britain

18 Finding 2: Employers value experience obtained in Canada

19 Finding 3: Conditional on 4-6 years experience, education plays little role in explaining gap

20 Obtaining degree from highly ranked foreign school doesn t help

21 A Canadian Masters degree does not help either

22 Finding 4: Name discrimination substantial, even for resumes with no other foreign indicators

23 Comments from CBC: Welcome to Canada where everybody is equal and the opportunities are open to all. Did I mention that Mr. Andre Thomas from France who can't speak much English but has a good name is 40% more likely to get a job interview than Chinese born Canadian like Mr. Yan Wang who speaks English as a first language and finds it difficult to speak Chinese. To the employers out there, Are you freaking kidding me? So that's why no one hired me after I changed my name to Rajesh Mohammed Hsiao? I just wanted to be part of the Canadian mosaic... Great...something else to feel guilty about in this politically-correct world. Give me a break. Well... you can imagine how difficult it is for me to get an interview. (from Ima Slobb)

24 What s going on here? Statistical Discrimination? (concern about communication/social skills) Why would you want to interview them in the first place, how do you know their not spies or Individuals connected to a Terroist or whack o reglious groups, why do you need the hassle. You can never check their backgrounds, and half of their credentials are fake! And most of them a lax about learning English and speaking it all the time! I think one very important point that was mentioned in the article, but a lot of people seems to fail to grasp is, just because someone got a foreign sounding name, does not mean they are a first generation immigrant. They could very well be born or grown up here, with English/French as their first language, and culturally identical to John or Jane Smith.Most famous (American) example, Barrack Obama.

25

26 Most agreed on comment: I have been guilty of this in the past. Not because I was prejudiced against a particular race, but because I felt that someone from overseas could have unverifiable information on their resume, and that a glowing resume was probably embellished. This is perhaps a sad reflection of myself. My mind was changed when I interviewed an Iranian man, with a name I could barely pronounce. I followed all of the regular protocols after reading his excellent resume, and ended up hiring a very skilled, disciplined individual who was universally admired by the rest of the staff. Since then, I have hired another "new Canadian", who has proved to be as valuable with an "unusual" name, with great results. If someone doesn't measure up to their interview during their probationary period, then you can address them accordingly, no matter what their name is. If you won't hire someone just because of their name, you're likely not living up to your resume. I'm embarrassed by how ignorant and bigoted I was, even though I didn't think I was either at the time I discounted people so trivially. I have seen the light, and I encourage you to take a leaf. In the words of Neil Peart: "Better the pride that resides in a citizen of the world, than the pride that divides when a colorful rag is unfurled".

27

28 What s going on here? Taste-Based Discrimination? (preference to work with individuals of same ethnicity or first-language) People tend to hire people with whom they believe they'll have a better chance of 'fitting in' within the company's social fabric, mostly due to fear of the unknown and a natural human preference for surrounding oneself with familiarity. It isn't 'right', but it is human. What is wrong with this practice? If I had a company, I would hire someone BORN here than someone who recently immigrated here. Lets take care of each other first.

29

30 Hello Dr. Oreopoulos, I am a former recruiter for IT companies I worked for 2 separate IT recruiting agencies during the biggest economic boom we have had.. On many occasions, I would interview a candidate for a specific IT job at one of my companies clients and feel that the candidate was a good fit.although accented, the candidate had a solid grasp of the english language and would be able to communicate well enough to succeed. It would only take a month or two before the candidate had a stronger capability of the English language. Being immersed in an english speaking environment, one learns quickly and evens starts to grasp our slang terminology. After presenting the candidate to the approriate venodrs or managers, more often then not a simple "no" would be the response. Some companies would come right out and state the candidate had no Canadaian expereince. Other times, they would state "we do not want an immigrant. We will only accpet a person if they are at the minimum a Permanent Resident". This was a common answer. I then decided to change my method. I would take the Name off of the resume of the same candidate and send it in again. Within minutes, I would get a phone call from the HR department of the company asking to see this candidate I had just sent in. When I raised this point to my superiors, I was always told to look the other way. It was not "my job to find immigrants work. It was my ob to help our client". They view immigrants as janitors and food prep workers regardless of their credentials.

31 An Example of differences in opinion: I have worked in the High Tech community as an HR generalist for the past 15 years, recruiting across Canada and in the US. I agree with Roberticus that as far as the IT community goes, we heavily rely on foreign applicants to fill all levels of technology positions. The federal gov't has a special fast track visa program to easily allow these types of workers into Canada. I currently work for a Vancouver HT company that is like the United Nations. We view so many resumes that we don't even notice the names. We zero right in on current technical experience and education and go from there. Often the name has not even registered. Can't speak for other industries, but the High Tech community can not afford to 'discriminate'.

32 I will make you all a bet right now at 6:59 PM Wednesday May 20,2009 that you can walk into a any Chinese or Indo Canadian business and you will not see a caucasian canadian working there a business that is in their own country! Hit Agree - You right I have never Caucasian Canadian that speaks fluent English in any of these business. So much for SUCCESS doing a Study Tung Chan it will not be balanced that another bogger has stated. Hit Disagree - I saw one once and they are still probably making $6 dollars an hour, when the min wage is $8 and should be $17.50 Okay now ill put the foot on the other foot. i am a construction worker that speaks English in Vancouver and am finding that guys that are advertising on the government job bank are looking for me to speak and east Indian dialect or a Asian dialect for me to even be considered for the position.since when did English become the none speaking language of Canada and why is our government allowing this to be posted on there site. So who is now being discriminated in this case and why is being allowed to be done threw our government funded site. Did they study how well english sounding names did when the hiring manager was a chinese or hindi native speaker?i used to work for a company where you could tell which team a person belonged to because some managers basically only hired people from their native country. SoThis isn't a native english speaker problem. Non-native english speakers can be just as prejudiced when hiring as native english speakers. It's a people problem

33

34 Is discrimination intentional? Psychology evidence that recruiters prone to making subconscious split second decisions that are unintentional (time pressure, stress, and ambiguity in how to choose who to interview) Bertrand, Chugh, and Mullainathan find negative correlation btw IAT score and picking African American resumes, that gets larger when subjects said they felt rushed going through resumes Rooth also finds negative correlation, but no correlation when using more explicit measure of discrimination

35 Is discrimination illegal? Name discrimination illegal Subsection 11 (1) of the Code also establishes that the right of a person under Part I is infringed where a requirement, qualification or factor exists that is not a prohibited ground of discrimination, but that results in the exclusion or restriction of a group of persons who are identified by a prohibited ground of discrimination, unless the requirement or factor is reasonable and genuine in the circumstances, subject to hardship on the employer Applicants with foreign-sounding names not given chance to show employers that underlying concerns about inadequate skills are unjustified missing out on opportunities because of name alone Add this explanation to list of candidates to explain immigrant/native labor market gaps

36 Caveats Can t look at hiring outcomes or earnings Non-representative sample of jobs (restricted to online postings) Only job postings within Toronto, April - October 2008 Only looking at 3 ethnic groups (interesting to consider Western European, Caribbean, English applicants from Indian, etc )

37 Comments from CBC: The autophobia of this article makes it worthy to be published in a internet blog or street paper containing Free Press in the title. A word to Canadian Universities and MSM... we get it, Anglo=bad, Ethnic=good; can we move on. Reminds me of the paradox of the Trudeaupia socialist elites telling Canadians for 40 years to help reduce world population and have less children (zero population) because we are destroying the world and now we are told that we need to increase our economic advantages by opening up the borders because we cannot sustain economic growth due to our low birth rate by accepting everyone from places were populations exploded during that same timeframe.

38 Conclusions Callback differences between immigrants and natives substantial (can t get foot in the door) Difference reduced by listing more experience from Canada Conditional on 4-6 years experience, whether education/credentials foreign or not does not seem to matter Name discrimination significant for resumes with Chinese, Indian, and Pakistani names Neither stat. discrim. Or taste-based discrim. Alone seem to explain results

39 Ethics of Audit Studies Study requires deceiving employers Can t tell them in advance Expensive and time consuming to tell them after But: Employers are not altering behavior and not required to think differently to what they are already doing Additional time cost ~30-60 sec per resume Employers who contact applicant >1 told applicant no longer available (over or phone message) minimal inconvenience costs involved are outweighted by the precise information provided on discrimination, which cannot be obtained by any alternative procedure (Bovenkerk, 1992) Dozens of audit studies done before this one

40