THE ROLE OF SOCIAL CAPITAL IN THE SETTLEMENT OF IMMIGRANTS IN CANADA BLAIR JACKSON. Integrated Studies Final Project Essay (MAIS 700)

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1 THE ROLE OF SOCIAL CAPITAL IN THE SETTLEMENT OF IMMIGRANTS IN CANADA By BLAIR JACKSON Integrated Studies Final Project Essay (MAIS 700) submitted to Dr. Foshay in partial fulfillment of the requirements for the degree of Master of Arts Integrated Studies Athabasca, Alberta December, 2012

2 Contents Context... 2 Research Question... 3 Relevance to Integration and Interdisciplinarity... 4 Methodology... 5 Findings... 7 Conclusions References... 20

3 ABSTRACT Despite societal benefits expected from immigration, successful settlement is typically measured largely in economic terms. Selection criteria, largely comprising human capital criteria, mirror this economic focus. Conversely, the benefits of the social capital immigrants possess are essentially disregarded. Evidence from numerous sources suggests that the human capital approach to selection is not leading to improved settlement outcomes. Discussion considers the limitations of the human capital metrics that are currently applied and considers how social capital could contribute to an enhanced settlement experience. The literature on the role of social capital in the settlement experience is limited. To address this gap, the literature review includes not only the standard peer-reviewed sources but is also expanded to include other publications, such as program evaluations and grey literature. 1 P a g e

4 Context Canada relies on immigration for the majority of its net population increase. Since 2001, sixty-six per cent (66%) of the net Canadian population growth has been a result of new immigrants. (Statistics Canada 2012) The immigration formula is largely used to build capacity in labour market areas that require specific skill sets. The exception to this is that Canada also accepts immigrants for compassionate reasons (i.e. family class and refugees). In theory, to meet economic needs and effectively fill specific labour market gaps, Canada must attract potential immigrants who align with labour market gaps and hold the required skill sets. Despite Canada s reliance on immigration for growth, we continue to see newcomers encountering challenges when integrating into the Canadian labour market. Therefore, consideration must also be given to the soft skills (or social capital) required to successfully settle in Canada. Statistics Canada data (2006) suggests that immigrants who have been in Canada five years or less, have the most difficulty integrating into the Canadian labour market, even though they are more likely than the Canadian-born population to have a university education. The situation improved for immigrants who had been in Canada between 5 and 10 years. Therefore, the longer immigrants remain in Canada, the better they fare in the labour market, and the gap narrows between these immigrants and Canadian-born workers. This suggests more can be done to improve the settlement experience for newcomers. The economic agenda for immigration arguably has a large social dimension, beyond labour market integration. Fundamentally, without social supports and social ties it is difficult to retain immigrants. However, more comprehensively, when newcomers attach to 2 P a g e

5 communities and the labour market we are essentially expanding our society. This societal shift cannot occur smoothly without considering the formal supports that facilitate settlement, including interventions and services that are in place (e.g. programs and services, etc.). It is equally important to consider the role of informal supports (e.g. family, friends, language, cultural groups, etc.). Theoretically, if immigrants have social connections to attach to (e.g. family, friends, cultural community, etc.) they will face reduced barriers, compared to immigrants with similar characteristics, but limited social connections. Research Question This research project investigates the impact of social and economic factors on settlement of immigrants to Canada over the past 10 years. The focus is on immigrants who landed as Economic class immigrants. The rationale for exclusion of refugee class immigrants is the nature of their immigration process. Due to the circumstances that refugee class immigrants face prior to arriving in Canada, it can be assumed that refugees would put less emphasis on labour market integration, and more emphasis on meeting immediate needs. Family class immigrants are considered, in that they arguably contribute to the social capital of economic class immigrants. Due to the relationships that exist between social and human capital, these factors must be considered, in parallel, when determining factors that have significant influences on the ability of new Canadians to successfully settle in Canada. Ultimately, the human capital model could likely benefit from greater consideration of social capital factors. This topic 3 P a g e

6 will be addressed through examination of the question, What social and human capital factors should be considered in the settlement experience of new Canadians?. Relevance to Integration and Interdisciplinarity Research on settlement, integration, human capital and social capital has been completed in the disciplines of sociology and economics, as well as interdisciplinary studies. For example, from the sociological perspective, immigrants are people with their own cultures who are living among a new culture. We must understand the social context of settlement in order to understand the other characteristics. Economics also plays a key role in measuring and understanding settlement. Economists track the economic performance of immigrants, and correlate it to integration. Over a period of time it is anticipated that individuals will perform better in the labour market. This performance is most often measured by earnings. From the psychological perspective, there is a great deal of pressure placed on individuals to integrate into the labour market. These pressures come from within the individual, within the family, and from society. All of these factors potentially have a psychological impact on the individuals. Ultimately, integration is about the path that individuals take to transition from one society to another. The economic aspects are easier to quantify and as a result, most monitoring systems have an economic bias. This suggests that more emphasis needs to be placed on measuring the human experience in order to better understand the impact of social capital on the settlement and integration experience. The intent of this interdisciplinary paper is to develop a broader understanding of the research problem (and solutions) by comparing and contrasting information from diverse sources. 4 P a g e

7 Methodology The research genres considered for analyses include literature review, empirical data review, and standard content analysis. Reliability of sources is weighed; as were the limitations of these lines of inquiry. This research utilizes multiple disciplines and multiple sources of knowledge. The disciplines that have been drawn on are primarily sociology and economics; however the analyses was transdisciplinary. Disciplinary vocabulary and scholarly sources have been used in order to form part of a transdisciplinary approach that considers disciplines and traditional sources of knowledge, as well as non-traditional sources (e.g. grey literature, program evaluations, special studies, etc.). Notably, several of the peer reviewed journal articles were interdisciplinary efforts, as were many of the program evaluations. This is not a result of targeted selection of these articles on this basis- much of the body of literature around immigration crosses sociology and economics. One limitation identified in the review literature review is the lack of research on the influence of social capital on the settlement process. This finding is juxtaposed to a very deep body of literature on income disparities, settlement challenges, and labour market integration issues. 5 P a g e

8 Definitions Human Capital: The definition of human capital is fairly uniform in the literature. It comprises skills, education, and experience. (Chakraborty & Guptab 2009) This concise definition is also the operational definition for this research paper. Social Capital: There are a myriad of definitions of social capital. The nominal definition that is best aligned with this research topic is the ability of actors to secure benefits by virtue of membership in social networks or other social structures (Portes 1998). For the purpose of this research the definition is operationalized as the network of support available to immigrants, including social networks and other social structures (e.g. family), which enable the settlement and integration process. 6 P a g e

9 Findings Overview of Immigration System and Supports The intent of immigration, as written in the Immigrant and Refugee Protection Act, is to permit Canada to pursue the maximum social, cultural and economic benefits of immigration. The nuance here is that the Act is to permit Canada to derive these benefits, rather than to allow each immigrant the ability to maximize social, cultural and economic benefits. (IRPA 2002) Additional objective under IRPA are to see that families are reunited in Canada (IRPA 2002) and to promote the successful integration of permanent residents into Canada, while recognizing that integration involves mutual obligations for new immigrants and Canadian society. (IRPA 2002) To contribute to the objectives of the Act, the Canadian immigration system is stratified into three key categories whereby potential immigrant can apply. These categories are 1) economic class immigrants; 2) family class; and 3) refugees. Economic class immigrants are selected based on their potential to contribute to Canada s economy. This includes subcategories of skilled workers, business immigrants, provincial and territorial nominees, and live-in caregivers. The common thread of these sub-categories of the economic immigration stream is that the applicant is assessed on their likelihood contributing economically by participating in the labour market. In the case of business immigrants this participation may be through investment, rather than active participation. Family class immigrants and refugees are not assessed based on self-sufficiency in the Canadian economy. Rather, family 7 P a g e

10 class immigrants are sponsored by close relatives or family members in Canada who agree to support them financially, and refugees are sponsored by the Government of Canada or private sponsors. To support immigrants across these categories the federal government offers approximately $1Billion in programs and services to support immigrants. (CIC 2012a) However, settlement supports (CIC 2012a) are oriented largely toward labour market integration, and include language training, employment services, and building professional connections. To a lesser extent, support is available for services that build social capital (e.g. mentoring, promotion of multiculturalism, etc.). (CIC 2012a) This research examines the human capital factors that are expected to contribute to economic outcomes, and also examines how social capital can contribute to settlement (economically and otherwise). Human Capital Dominance Human capital theory has been applied in measuring economic integration for several decades. Human capital factors are often used to describe the quality of immigrants. For example, Wright and Maxim (1993) use wage differentials on arrival as a measure of immigrant quality. In this context, a small wage differential on arrival, and/or fast wage growth post-arrival supposedly indicates higher quality. It is a common method of analysis; however, the extent to which human capital calculations consider the labour market needs that align with specific cohorts, is questionable. Although wage differential and wage growth can be considered indicators of integration success, it is also important to consider the economic conditions of sectors immigrant are applying to as well as the social capital of 8 P a g e

11 the immigrant. Perhaps the outcome of this would be a broader definition of what successful settlement and integration means. More recent trends indicate that additional emphasis continues to be placed on the human capital that immigrants possess. In 2011, significant reforms were applied to the immigration system to respond to Canada s economic needs (CIC 2012a). These reforms included more emphasis on selecting newcomers with skills relevant to economic needs. These policy reforms were implemented specifically to improve economic objectives. In addition, a recent CIC announcements highlighted that recent changes to the federal skilled worker immigration stream will improve Canada s ability to... select skilled workers who can hit the ground running upon arrival (CIC, 2012b). This suggests that there is little patience for immigrants with deficits in social and human capital. The federal government has identified the need for highly skilled labour and certain trades as Canada s growth continues to rely, in significant part, on selecting immigrants who can meet the needs of Canada s changing labour market. The intent is for these strategically selected immigrants to have access to settlement programs that maximize contributions to the Canadian economy (CIC 2012a). The government continues to focus on developing an immigration system with a primary focus on meeting Canada s economic and labour market needs. To this end, some specific changes in immigration criteria include working to establish a minimum language threshold and mandatory language testing for low-skilled provincial nominees (CIC 2012a). Other reforms include a continued focus on highly educated immigrants, with a new stream under the Federal Skilled Worker Program for 9 P a g e

12 international students pursuing PhD studies in Canada. In addition, a new Federal Skilled Trades Program is planned in fiscal year 2012/2013 which will assist in expediting the immigration process for immigrants in Trades where Canada has identified shortages. (CIC 2012a) With changes in labour market demand the education levels of immigrants are changing. Approximately half of the immigrants to Canada had some post secondary education. Within these proportions the mix is shifting towards higher education. For example the proportion of those with bachelor degrees has steadily declined since 2002 and been replaced by an increasing proportion of immigrants with a Masters degree or PhD (CIC 2011b). Notably, when examining access to a job in the desired occupation, the desired occupation is obtained more rapidly by those seeking work in nonprofessional jobs (e.g. sales, services, trades, transport and equipment operators, primary industry, and processing and manufacturing occupations). This highlights yet another misalignment between the intent and the result of assessing human capital. Additional characteristics that influenced the speed of access to a desired occupation include human capital elements, such as education, English language ability, Canadian work experience, as well as, social capital factor, including networks of friends facilitating access to the intended occupation (Grenier & Xue 2011). While policy refinements with a heavy focus on economic criteria have been implemented, the proportion of economic class immigrants rose to 63% of total new immigrants in 2011, up 8% from (CIC 2006; CIC 2012a). This results in shrinking intake of family class 10 P a g e

13 immigrants. It is not evident that this policy shift has considered the value that family class immigrants have on economic class immigrants. For example, family members (particularly parents) theoretically play a role in supporting the work of the economic immigrant, by providing childcare, conducting household tasks, and by reducing pressure to return to the country of origin to be with family. A key barrier that is not addressed by current human capital intake criteria is foreign credential recognition (FCR). One issue around FCR is that the federal government valuation of foreign credentials (Carter 2009) does not entirely align with that of labour market realities. Human capital is open to interpretation and when comparing fact and perception, it is often the perceived that is most important. For example, if an employer does not recognize the human capital of an individual then their labour market integration will not be commensurate to their expectations. This interpretation of human capital is often influenced by employer requirements and regulatory requirements for Canadian work experience, credential recognition, licensing for regulated professionals, and work-specific language abilities (Alboim et al, 2007). This discounting of foreign credentials is widely recognized in the literature (Brouwer 1999; Alboim, Finnie and Meng 2005; Carter 2009; CIC 2010c; Sommerville & Walsworth 2010). Discounting of foreign credentials is further evidence that more consideration of social capital is required. Boudarbat and Boulet (2007) support the argument that selection and integration are not directly aligned, indicating that Canada s immigration selection criteria is intake focussed rather than integration focussed. Selection grids give considerable weight to foreign work 11 P a g e

14 experience. However, immigrants who have been selected at least in part on the basis of their professional experience often find that foreign experience is not recognized in the Canadian labour market (Boudarbat & Boulet 2007). By valuing an applicant s foreign credential and work experience, the applicant assumes that these credentials will be recognized in the labour market (Sommerville & Walsworth 2010). To address challenges related to discounting of credentials some immigration intake streams require the applicant to secure employment in advance (CIC 2011a). This prerequisite mitigates the uncertainty between foreign credentials and labour market realities. It is not a perfect solution, however. If the first employment opportunity terminates, the individual is left to see if other employers will recognize their skills and experience. To address these FCR issues, CIC continues to implement measures to improve recognition of foreign credential (CIC 2012a). Dobrowolsky (2012) provides a regional perspective on the debate over how Canada selects immigrants and what factors assist with settlement. Dobrowolsky suggests that a better balance must be struck between economic and social immigration priorities, which, according to the author, are out of balance under the current neo-liberalist federal agenda (Dobrowolsky 2012). The author qualifies this remark by highlighting the government s emphasis on attracting highly skilled immigrants; expanding low wage (i.e. low skilled positions) temporary foreign worker positions; and encouraging settlement in less populated areas (where formal settlement supports are minimal). Although economic opportunities are distributed across Canada, formal and information social supports are not delivered consistently outside major urban centres (Akbari 2008). Economic agendas tend not to recognize this imbalance in distribution of social supports. 12 P a g e

15 Social Capital Considerations Overall the literature on the influence of social capital on settlement success is not extensive. In the absence of a significant body of literature characterising the influence on social capital on settlement, a cross sectional analysis of program evaluation findings was completed for this research paper. The findings of this cross sectional analysis suggest that measurement of social capital is limited and the correlation to social capital and settlement is essentially non-existent. However, there are some indicators that emerged, which could be catalysts for further investigation. For example, the Provincial Nominee Program (PNP) selects immigrants based on their ability to attach to regional labour markets. Provincial Nominees emphasize the importance of the network of support provided by friends and family through their settlement process (Carter 2009). Recognizing this, some provinces deliberately use social supports to attract immigrants away from major centres (Akbari, 2008; Carter et al, 2008), such as Montreal, Toronto and Vancouver. For example, the Manitoba PNP emphasises the importance of social factors such as family and community ties; settlement and integration support; timely, accessible and appropriate language training; access to health care, education and social programs; and cultural and recreational opportunities (Carter et al 2008). Ultimately, targeted selection of immigrants, based on human capital, does not appear to unilaterally assist individuals with labour market integration (Boudarbat and Boulet 2007). Despite the importance of social capital, the capacity of the primary service providers is limited in providing a full spectrum of social and economic settlement supports (Richmond and Shields 13 P a g e

16 2005). However, on a small scale, some successful support to human capital is being delivered. Findings from the review of evaluations related to immigration indicate that although social capital is under represented, some relevant findings emerged. A review of a Federal Provincial Nominee Program evaluation found recognition of the importance of family connections in the selection criteria. This is unique for an economic program. The assumption behind the Family Stream in PNP is that having a family connections means that nominees are more likely to settle in the province or territory of nomination (CIC 2011a). It should be noted that the eligibility criteria for family member is broader than federal Family Class definition. Under the provincial streams sisters/brothers, step-brothers/sisters, nieces/nephews, step-daughters/sons, uncles/aunts, sisters/ brothers-in-law and first cousins are all included. Although the scope of family is broader, provincial Family Stream applicants must demonstrate the ability to establish economically; unlike the Federal family class (CIC 2011a). The existence of this stream further supports the theory that social capital makes an important contribution to settlement. This is not the case for criteria on other programs. The FSW program presented mixed perspective with respect to social capital. For, example, the FSW program considers family relations in Canada somewhat of an asset in scoring criteria. Conversely, however, family was also considered a potential risk, as a potential source of fraudulent job offers from family members (CIC 2010c). Analysis of some evaluation conclusions suggest that further consideration is required on the part of policy makers when balancing program objectives. For example, the Federal Skilled Worker evaluation (CIC 2010c) concluded that the FSW Program contributes to increasing diversity in the social and economic fabric of Canadian society by supplying 14 P a g e

17 qualified and experienced workers. Although, the economic contribution is evident, it is unclear how the contribution qualified and experienced workers make to the social fabric is measured. The Host Program leverages the experience of Canadians to build the social capital of newcomers. An Evaluation of the Host Program, which partners newcomers with Canadians who can assist them in becoming oriented with their community, found that settlement and adaptation was significantly improved by connecting with a Canadian to guide them and introduce them to community connections (CIC 2010a). The program led to improved social capital through improvement in newcomers language skills, understanding of Canadian culture, familiarity with community and independence. The Host Program also assisted in reducing settlement related stress, and improved social networking. The program also had a moderate impact on some program participants professional networks (CIC 2010a). It was anticipate that the Multiculturalism Program evaluation (2012d) would supply significant evidence on the benefits of social capital. After all, this program is the main program oriented at building a socially cohesive society. Part of the programs function is to facilitate interaction among communities in order to increase mutual awareness and understanding. These interactions are found to be effective in promoting social cohesion. The program also emphasises equal opportunity for individuals of all origins. Measuring the former (interactions) is far easier to measure than the latter (equal opportunity for all) activities. The evaluation found there are inherent challenges with measuring the outcomes 15 P a g e

18 of social programs, particularly with respect to the attribution of outcomes. In addition, little on-going performance measurement of project outcomes is occurring. Additional evidence of the value of social capital emerging from program evaluations includes refugees leaving their original destination in Canada to reunite with family, friends, and or ethnic community in other provinces; (CIC 2011b) and newcomers obtain information primarily from family and friends (CIC 2012c). In addition, Federal Skilled Workers cited limited social networks as a barrier to finding employment (CIC 2010c). Despite the pervasive human capital agenda, evidence from this cross sectional analysis suggests that targeted labour market programs benefits from supports that enhance social capital. Additional benefits of social capital are realized when complementary programs are accessed by immigrants. The Temporary Foreign Worker (TFW) program allows employers to hire foreign workers on a temporary basis to fill short-term labour market needs. These TFWs gains relevant Canadian work experience while working temporarily. The TFWs also build social capital during this period (e.g. social networks, community orientation/participation etc.). In addition, based on the lived experience as a TFW, the individual can make an informed decision on whether their experience and credentials match long-term labour market needs. Following the temporary work period, some TFWs apply to the PNP (CIC 2011a). The theory behind transitioning individuals from TFW to PNP is that the Provinces are in a position to assess skills and experience that includes Canadian work experience (CIC 2011a). Another method of concurrently building social and human capital is international graduate studies. International graduate students acquire education that assists in building their human 16 P a g e

19 capital, while developing life experience which builds their social capital (Akbari 2008). Using a Canadian education as path to improve settlement is supported by earlier literature (Reitz 1998), which suggests a greater impact will be made on long-term settlement, by integrating immigrants in educational institutions, while applying less concentration on labour market integration (Reitz 1998). Similar to TFWs, international graduate students can make more informed decisions on their ability to settle, compared to immigrants who have not lived in the country. Considering the long continuum of settlement and integration, the current range of initiatives may not be sufficient (Akbari 2008; Boudarbat and Boulet 2007; Robson-Haddow and Ladner 2005). To this end, recommendations have been put forth by the Standing Committee on Citizenship and Immigration in 2003 to improve the scope and the eligibility for federal settlement initiatives(robson-haddow and Ladner 2005). It appears that such recommendations are still relevant given the current context. Looking beyond the realm of labour market integration, social capital also influences the most fundamental settlement needs. For example, precariousness of housing situations may be increased in individuals lacking social networks and/or socially excluded individuals (Newbold 2010). Newbold adds that newcomers with limited social support in the community are more likely to experience homelessness as many rely on social networks for accessing housing. Low social capital has also been linked to poor physical and mental health outcomes (Newbold 2010). To mitigate negative outcomes of low social capital, mentor programs are available to assist newcomers. Mentors have the ability to provide information about Canadian culture, help to 17 P a g e

20 develop social network, and help tin building overall social capital (House of Commons 2010). An added advantage of mentor programs is that they leverage volunteers from the community so they are an efficient means of achieving results. Conclusions Labour market integration has been a continual challenge for immigrants, and little evidence suggests that progress is being made to reduce barriers. Considering economic realities and labour market needs, human capital will remain an important aspect of settlement selection criteria. However, more emphasis should be placed on determining the value of various aspects of social capital. Measuring success, purely on an economic basis, omits social factors that contribute to settlement and arguably sustain economic outcomes over the longterm. This is an important consideration given the high proportion of population growth that is attributed to immigration. The most commonly recognized elements of social capital that contribute to settlement include family/friend support and community connections. Although social capital facilitates settlement and integration, it cannot replace fundamental elements of human capital such as recognized skills and credentials. Moreover, if the basis of selection of immigrants continues to be weighted toward human capital, successful settlement could be further enhanced by additional consideration of social capital. This balance would provide and additional mechanism to validate whether an immigrants human capital will be realized in a successful settlement experience. 18 P a g e

21 In addition, considering the limitations in measuring and reporting on settlement outcomes (CIC 2010b), adding additional metrics related to the influence of social capital on settlement will be challenging, but necessary. Even one of the most robust Canadian studies of social capital (Xue 2008) found the relationships between social capital indicators and labour market outcomes are not clear. One avenue toward addressing this challenge would be an international comparative review to determine how other countries value social capital in the immigration and settlement process. In addition to human and social capital, societal factors should also be recognized when trying to understand barriers to integration, including gender, visible minority status, and disability (Hum 2003). 19 P a g e

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