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Immigrants in urban labour markets: place of birth and immigrant concentrations in British Columbia.


Although immigration policies and regulations select immigrants based on their human capital, newly arriving immigrants find it increasingly difficult to integrate into the Canadian labour market. An analysis of 1996 Canadian census data concentrates on the province of British Columbia to examine the relationship between labour market outcomes among immigrants, residency in large, mid-size and smaller settlements, and the size of local immigrant and ethnic communities. In particular, comparisons are made between the metropolitan area of Vancouver, which is the major immigrant gateway, and the metropolitan area of Victoria, smaller cities and the non-metropolitan area of British Columbia. It also differentiates between gender, levels of education and place of birth. The results reveal high labour force participation rates and higher incomes among groups that settle outside of the Vancouver metropolitan area, but this advantage is contingent on gender, place of birth and the size of existing ethnic and immigrant communities.

Keywords: labour markets, immigrants, place of origin, settlement area, British Columbia.


Bien que les reglements et les politiques concernant l'immigration choisissent des immigrants bases sur leur capital humain, les immigrants recus trouvent de plus en plus difficile d'integrer le marche du travail canadien. La presente etude est basee sur les donnees du recensement canadien de 1996 et se concentre sur la province(domaine) de la Colombie-Britannique. L'etude a pour but d'examiner le rapport entre les immigrants et le marche du travail, le lieu de residence (ville de taille metropolitaine, moyenne et petite) et la concentration locale des immigrants et des communautes ethniques. L'analyse est basee sur des comparaisons entre la region metropolitaine de Vancouver (port d'entree principal des immigrants), la region metropolitaine de Victoria, les villes de petite taille et le secteur non metropolitain de la Colombie-Britannique. L'etude incorpore egalement les differences entre les sexes, le niveau d'education et le lieu de naissance. Les resultats revelent un haut taux de participation de main-d'ouvre et des revenus plus eleves parmi les groupes qui vivent a l'exterieur de la region metropolitaine de Vancouver. Toutefois cet avantage depend du sexe, du lieu de naissance et de la concentration d'immigrants et des communautes ethniques qui existe deja dans les villes et regions.

Mots cles : marches du travail, immigrants, place d'origine, secteur de reglement, la Colombie Britannique.


Although immigration policies and regulations select immigrants based on their education, skills, and ability to speak English and French, this human capital does not always translate into labour market success. Many immigrant groups find it increasingly difficult to integrate into the Canadian labour market (Badets and Howatson-Lee 1999, Baker and Benjamin 1995, Bloom et al 1995), and place of settlement emerges as a defining element of the labour market experiences of immigrants (Ettlinger and Kwon 1994, Pendakur and Pendakur 1998, Hiebert 1999b). Current public debate in Canada focuses on the performance of immigrants in the labour markets of large metropolitan areas vis-a-vis smaller cities and towns. Minister of Citizenship and Immigration Canada, Denis Coderre, recently proposed to create incentives for immigrants to settle in smaller communities (The Leader-Post 2002).

In this paper I take a supply-side approach to explore the linkage between place of settlement and immigrant labour market performance. I examine several alternative models to human capital theory that conceptualize the relationship between immigrant and ethnic communities and the economic integration of newcomers. According to these models, immigrant and ethnic communities can serve as labour market resources to newcomers, or they can be a source of competition and a site of exploitation. Since immigrant communities typically form within distinct urban contexts (e.g. Ley 1999, Hiebert 1999a, Bauder and Sharpe 2002), the study focuses on cities and non-CMA areas with immigrant communities of different sizes.

I use data from the 1996 Canadian census to investigate whether and how differences in place of settlement and the size of local immigrant communities shape the labour market experiences of newcomers in British Columbia (BC). Roughly 23 percent of all Canadian immigrants settled in this province in 1996 (Bauder et al 2001: 7). The analysis also examines gender, levels of education and place of birth. The analysis compares, in particular, the settlement contexts of the Vancouver Census Metropolitan Area (CMA), which is a major immigrant gateway, the smaller Victoria CMA, other smaller cities and the "non-metropolitan" areas of BC.

Literature Review

Immigrant Communities and Immigrant Labour

Several theories conceptualize the relationship between local immigrant communities and the labour market performance of newcomers. These theories associate immigrant and ethnic concentrations with different labour market effects. While immigrant and ethnic concentrations can be a valuable resource for immigrants, these concentrations can also obstruct the economic integration of immigrants into the mainstream labour market. Below I review a series of theories that argue for either one of these two possibilities.

Ethnic communities can assist immigrants in gaining access to the labour market and in becoming successful entrepreneurs in niche industries (Waldinger 1996, 1999, Kaplan 1997). Waldinger (1993: 695) states: "ethnic entrepreneurs ... are social outsiders who must compensate for the technical background deficiencies of their group and the discrimination they encounter through the use of their distinctive sociocultural resources." Portes and Bach (1985: 24) note the "functional advantage of ethnicity" in the urban labour market. They argue that ethnic economies provide economic opportunities for immigrants with low human capital, enabling them to obtain jobs that they would otherwise not be able to get. Ethnic and national identities emerge as coping mechanism "among immigrants who shared only the most tenuous linkages in the old country (Portes and Bach 1985: 25)." Although ethnic economies can hamper interaction with wider society (Fong and Ooka 2002), they can also offer substantial economic benefits to the members of an ethnic immigrant group.

Light et al (1999) make distinctions between ethnic economies, in which immigrant entrepreneurs hire co-ethnic immigrants, and immigrant economies, in which immigrant entrepreneurs employ immigrants of other ethnic groups. In these immigrant economies, "entrepreneur-rich" immigrant groups (such as Koreans in Los Angeles) benefit from the availability of non-co-ethnic immigrant workers (such as Mexicans) (Light et al 1999: 10). In this case, immigrant concentration has a generally positive effect on newcomers from various ethnic backgrounds.

The argument that immigrants benefit from the presence of large immigrant and ethnic communities is also supported by the middleman theory, which suggests that trade with specialty goods and ethnic services create labour market opportunities for newcomers. (Bonacich 1973; Bonacich and Modell 1980). In recent years, immigrant "middlemen" have increasingly operated at the conversion points of international and transnational trade networks, where opportunities and profits can be enormous (Mitchell 1995, Lin 1998).

Immigrant concentrations can also be associated with labour market disadvantage for newcomers. The queuing theory (Waldinger 1996), for example, argues that ethnic minorities are situated in a labour queue based on the immigration history of their group. Peripheral immigrant groups are positioned at the end of the queue and have only restricted access to the labour market. Furthermore, Bonacich (1993) presents the "other side" of ethnic entrepreneurship and argues that immigrant workers can be most effectively exploited in the context of their own ethnic communities--in sweatshops, for instance, that routinely violate labour standards. In this case, ethnic identity facilitates the labour market marginalization of ethnic immigrants (Bonacich 1972). In addition, ethnic economies can isolate newcomers and prevent them from acquiring English language skills and the cultural capital required in the mainstream economy (Moos and Tilly 1996). Thus, immigrants remain confined to the exploitative conditions of the ethnic economy.

Gender is an important dimension of the immigrant labour market: immigrant women tend to surfer from exploitation more than men do. In fact, immigrant men may benefit precisely from the exploitation of co-ethnic immigrant women (Zhou and Logan 1989). In addition, immigrant women often work in occupations, such as domestic services, that isolate them from the ethnic community, while men often benefit from the opportunities provided by these communities (Hagan 1998). Gender effects differ between ethnic immigrant groups (Grasmuck and Grosfoguel 1997, Wright and Ellis 2000), and even within given ethnic groups men and women perform different roles depending on their socio-economic status. For example, relatively few middle-class Chinese immigrant women participate in the New York labour force because they are not competitive for middle-class occupations, while working-class women are disproportionately drawn into exploitative working arrangements (Zhou 2000). In Southern California, on the other hand, many working-class Mexican immigrant women never enter the labour force because of family and household obligations (Mattingly 2001).

The theories reviewed above make contradicting predictions about whether or not immigrants benefit or surfer from settling in cities with large immigrant populations. On the one hand, large immigrant concentrations may offer greater employment and entrepreneurial opportunities for newcomers than places with lower immigrant concentrations. On the other hand, immigrants, particularly women, may be disadvantaged in large immigrant gateway cities, where immigrant communities facilitate entry into sweat-shop employment and low-paying wholesale, trade and service occupations (Sassen 1988, 1994, Daniels 1992). In Los Angeles, for example, "there would be no gardeners, no baby-sitters, no garment workers, no hotel housekeepers, without the Mexican and Central American newcomers (Waldinger 1999: 282)."

The labour market experiences of immigrants vis-a-vis their areas of settlement are shaped by so-called selection effects. According to these effects, immigrants with certain skill characteristics select certain cities for settlement to optimize their labour market opportunities. The characteristics of local and urban labour markets may "influence self-selection at particular skill levels and affect earnings allocation for those with given levels of skill (Reitz 1998: 27)." One of the main consequences of these selection effects is that educational and skill levels likely differ between immigrants in different settlement contexts.

Another contested issue is the spatial scale at which immigrant labour markets should be examined. Ethnic labour markets are sometimes conceptualized on municipal, neighbourhood or block levels (Hiebert 1993, Kaplan 1997, Germain and Gagnon 1999, Ley 1999). In a related context, Werbner (2001: 676) points out that "the enclave was never defined in residential terms (original emphasis)." Rather, immigrant labour markets can be locally concentrated or spatially dispersed. In Vancouver, immigrant communities are increasingly fragmented and disperse into suburban areas (Hiebert 1999a, Bauder and Sharpe 2002). Ethnic businesses also pursue various kinds of locational strategies (Zhou 1998), and community linkages tend to extend far beyond the neighbourhood boundaries (Mattingly 1999). Therefore I follow other empirical studies (Ettlinger and Kwon 1994, Wright and Ellis 2000, Light et al 1999, Zhou 2000) and use the urban area rather than the neighbourhood as unit of analysis.

Canadian Immigrants in the Urban Labour Market

The labour market performance of immigrants and ethnic minority groups varies between cities in Canada. Canadian cities experience different degrees of economic globalization, which has varying effects on the earnings of immigrants and visible minority groups (Ooak and Fong 2002). The unemployment rates among immigrants tend to be lower in Vancouver than in Toronto or Montreal (Badets and Howatson-Leo 1999). In addition, immigrants are more likely to find high-skill employment if they live in Vancouver (and Toronto) than in other cities (Thompson 2000). Regarding earnings, many visible minority immigrants surfer from low returns on their human capital. In Vancouver, this earnings penalty tends to be smaller than in Montreal or Toronto (Pendakur and Pendakur 1998). In Vancouver and Victoria visible minority women may even enjoy higher earnings than comparable 'white' women (Pendakur and Pendakur 2000).

It is unclear whether or not the relative success of Vancouver's immigrants relates to the presence of large immigrant and ethnic economies. For example, compared to other Canadian CMAs, a large proportion of Vancouver's foreign--born labor force was self-employed, but the self-employment rate for Canadian--born workers was also higher in Vancouver than elsewhere (Razin and Langlois 1996). Other research emphasizes that the province of BC--Vancouver in particular--has attracted a disproportionately large share of business-class immigrants (Woo 1997, Ley 1999) who are ready for business with the local community (Mitchell 1993, 1996, Olds 1998). However, the effect of immigrant entrepreneurship may not always be positive. Most newly established East Asian businesses, for example, are small and sometimes subject family members and co-ethnic workers to considerable exploitation and patriarchal labour practices (Froschauer 1998). Similarly, Indo-Canadian entrepreneurs in Vancouver's wood-processing and construction industry hire family and ethnic community members to fill positions with low wages and substandard working conditions (Walton-Roberts and Hiebert 1997).

While the literature reviewed above suggests that Vancouver's immigrants may not benefit from the local presence of a large immigrant community, Wanner (2000), supporting the queuing theory, finds that occupational status among immigrants increases with an ethnic groups' proportionate share of the total population. However, workers can also be moved back in the labour queue, depending on their place of birth and country of education.

Ethnic queuing and ethnic economies probably contribute to the segmentation of Vancouver's immigrant workers into distinct occupational and industrial sectors (Hiebert 1999b, Informetrica Limited 2000). Although segmentation tends to diminish over time for most immigrants, some ethnic and gender groups, such as female South Asian immigrants, remain locked into secondary occupations (Hiebert 1999b). Occupational and industrial clustering often produces lower earnings and less favourable working conditions (Pendakur and Pendakur 1998).

The Vancouver CMA is BC's major immigrant gateway. Does the presence of large immigrant and co-ethnic communities enhance or constrain the labour market prospects of newcomers? How does the labour market experience of Vancouver's immigrants compare to the experience of newcomers who settle in places in BC with lower immigrant concentrations? The empirical analysis below investigates these questions.

Research Design

One potential problem for labour market research on immigrants is that different origin groups have different histories, community structures and sociocultural resources (Waldinger 1996). Therefore, different groups are difficult to compare with each other. Comparing the same origin group in different regional contexts (such as New York and Los Angeles) is equally problematic, because one must account for "the institutional features of the economies in which immigrants find themselves (Waldinger 1993: 699)." To deal with the problem of regional differences in economic structure, I compare immigrant groups in different settlement contexts within a single Canadian province, British Columbia. BC's economy is distinct from other economic regions in Canada (Wallace 2002: 211-229), while provincial labour standards, administrative structures and professional regulatory bodies are consistent across the province.

The settlement contexts under investigation include the large immigrant gateway CMA of Vancouver, the smaller CMA of Victoria, several other small cities and the non-CMA area of BC. Although these settlement contexts are integrated into the same economic region, the local circumstances of labour demand differ between these places. The Vancouver CMA is a quickly growing service and high technology centre tied to the Pacific Rim economy. Service sector employment, particularly in the public sector, is even more prevalent in the provincial capital, Victoria, than Vancouver. Smaller cities and non-CMA areas of BC rely relatively heavily on the primary sector (agriculture, fishing and mining) and resource-based manufacturing. Some communities recently acquired a significant tourist industry (Wallace 2002: 225-228).

Spatially varying economic structures provide different sets of opportunities for both long-time residents and newcomers. For example, in 1996 the percentage of immigrants in managerial and professional occupations was 32.1 percent in Victoria, 29.9 percent in Vancouver, and only 21.1 percent in non-CMA areas. At the same time, skilled and semi-skilled craft, trades and manual workers constituted only 11.7 percent of the immigrant workforce in Victoria, 13.5 percent in Vancouver and 21.5 percent in non-CMA areas (Bauder et al. 2001: 60-61). Given the local variation of economic circumstances it is important that comparisons between the labour market outcomes for immigrants are cross-referenced with the labour market situations of Canadian-born workers in the same locations.

I measure labour market performance as labour force participation, labour force activity and income. Besides place of settlement, I differentiate between gender, period of immigration and education. Previous research has shown that men and women play different roles in immigrant economies (Zhou and Logan 1989, Grasmuck and Grosfoguel 1997, Hagan 1998); period of immigration reflects the origin of immigrant groups and the degree of integration into the Canadian labour market (Wanner 2000); and education constitutes an important aspect of human capital that influences labour market outcomes (Pendakur and Pendakur 1998, Hiebert 1999). In addition, differentiating by levels of education controls for a particular type of self-selection effect: if immigrants with different levels of education choose to settle in different geographical contexts, then a comparison between settlement contexts should focus on immigrants with similar educational attainments. In the analysis I use the Statistics Canada's 1996 Public Use Microdata File (PUMF) and a series of cross-tabulations of immigrant status, place of residence and labour market characteristics from the 1996 Canadian Census.


Labour Market Performance In BC Settlement Contexts

Almost half of BC's 3.7 million residents lived in Vancouver in 1996. Victoria is much smaller with about 300,000 residents. Roughly 1.6 million people lived in non-CMA areas (Table 1). Of Vancouver's population, 35 percent were immigrants, and roughly a third of those were recent immigrants who became Canadian residents between 1991 and 1996. In Victoria, only 19 percent were immigrants, and only every tenth immigrant was a recent (1991-96) immigrant. In the remainder of the province, immigrants constituted 14 percent, and of those less than 10 percent were recent immigrants. Obviously, immigrants in non-CMA areas tend to be of 'older stock.' Of the recent immigrants who settled in non-CMA areas, 90 percent lived in the mid-size cities of Kelowa, Kamloops, Abbotsford, Nanaimo and Prince George (not in Table 1). In these cities, immigrants constituted only 2.5 percent of the population. (1)

One of the main premises of immigrant and ethnic economy theories is that local immigrant communities facilitate entrance into the labour force. I therefore expect that settlement contexts in which immigrants constitute a high proportion of the population (i.e. Vancouver) are associated with relatively high labour force participation rates among recent immigrants. Figure 1 displays the labour force participation rates among Canadian-born residents, immigrants and recent immigrants (2). The category "recent immigrant" separates 'newerstock' immigrants from the general pool of immigrants.


Canadian-born men have relatively consistent participation rates across the province, indicating the absence of strong variations in local demand structures. In comparison, participation rates among immigrant men are lowest in Vancouver and highest in non-CMA areas. While in non-CMA areas there is almost no difference between immigrant status groups, in Vancouver the labour force participation rates among immigrant men are far below the rate of Canadian-born men. Immigrant women have consistently lower participation rates than Canadian-born women across the province. This gap, however, is widest in Vancouver and narrowest in non-CMA areas; it is also wider among recent immigrants than among 'older stock' immigrants. Apparently, the large immigrant community of Vancouver does not facilitate participation in the labour force. One possible explanation for the high participation rates among immigrants and recent immigrants outside of Vancouver are self-selection effects. In this case, self-selection effects could offset the effects of ethnic, immigrant and middleman economies that possibly operate in Vancouver.

Figure 2 examines differences in income between contexts of settlement and immigrant status among working persons. Canadian-born men and women have the highest average incomes in Vancouver, followed by Victoria and non-CMA areas (Figure 2). Among immigrant men and women, the average incomes are lower in Vancouver than in Victoria. Recent immigrants in Vancouver (both men and women) have lower mean incomes than recent immigrants in both Victoria or non-CMA areas. Contrary to the effects predicted by middleman, ethnic and immigrant economy theories, the large immigrant community of Vancouver fails to provide higher incomes to immigrant workers.


Education and Place of Settlement

From the above analysis it is unclear to what degree education shapes the employment outcomes of immigrants in different settlement contexts. For example, it could be possible that the patterns revealed in Figures 1 and 2 reflect higher educational attainment among newcomers who settle in Vancouver, Victoria and non-CMA areas. Such an explanation would be consistent with the idea that self-selection processes attract higher educated immigrants to Victoria and, to a lesser degree, non-CMA areas. To examine this possibility, I separated Canadian-born residents and immigrants according to education levels.

Table 2 shows the profile of the education levels of male and female Canadian-born residents, immigrants and recent immigrants in the three settlement contexts under investigation. For BC as a whole, immigrants (in particular recent immigrants) are more likely to be university educated than Canadian-born residents. (3) Canadian-born men tend to have the highest levels of education in Vancouver, slightly lower levels in Victoria and considerable lower levels in non-CMA areas. Canadian-born women are most likely to be university educated in Victoria, followed by Vancouver and non-CMA areas. Education levels among male and female immigrants tend to be considerably higher in Victoria than in Vancouver and they are lowest in non-CMA areas. Recent immigrants tend to reproduce the locational differences observed for immigrants as a whole, although they tend to be more likely to be university educated. For example, more than 45 percent of Victoria's recent male and female immigrants are university educated.

In order to account for these education differences, Figure 3 depicts labour force participation rates for men and women, and immigrant status groups separately for different educational categories. (4) The results substantiate the earlier finding that Canadian-born residents confront relatively similar labour market circumstances in the three different settlement contexts (see Figure 1): in the same educational and gender category Canadian-born residents have relatively consistent labour force participation rates in Vancouver, Victoria and non-CMA areas. (5) Among immigrants in the same gender and educational categories, however, the participation rates tend to be lower in Vancouver than in Victoria or non-CMA areas. The relative consistency of this difference across educational categories indicates that higher educational attainment is unlikely to be the reason for overall higher labour force participation rates in Victoria and non-CMA areas (see Figure 1).

Human capital theory suggests that education is a major influence on income. The relatively high mean incomes among immigrants in Victoria (Figure 2) could be driven by the comparatively high educational attainments of this group (Figure 3). Figure 4 displays total average incomes of working men and women by immigrant status, settlement context and education. Again, average incomes are relatively consistent across settlement contexts for Canadian-born workers in the same gender and educational categories. (6) This consistency indicates that Canadian-born workers receive similar returns on education in the three locations. Among immigrants,


Canadian Journal of Urban Research, Volume 12, Issue 2, pages 179-204. Copyright [c] 2003 by the Institute of Urban Studies All rights of reproduction in any form reserved. ISSN: 1188-3774

average incomes are more variable, suggesting that place of settlement is an important factor influencing income. However, contrary to the predictions of the immigrant economy and middleman theories Vancouver, where a large immigrant community resides, is generally not associated with higher earnings among immigrants. Among recent immigrants, the average incomes in Vancouver exceed those of Victoria and non-CMA areas only in one case: women with high school or trade certificate.

Interestingly, immigrant men with below high school education in non-CMA areas have higher average incomes among any other group in this category, including Canadian-born workers. This anomaly raises the question if immigrants have moved to non-CMA areas because they were offered high-wage jobs in the first place. A similar scenario may apply in other cases, male university-educated men in Victoria and non-CMA areas, and immigrant women with high school diplomas and trade certificates in Victoria, all of whom have average incomes above their Canadian-born counterparts. Another possible explanation is that place of origin among immigrants relates to labour market outcomes. The next section therefore examines place of birth.

Place of Birth and Community

According to the ethnic economy theory, foreign-born communities can generate labour market opportunities for members of their own ethnic group. Table 3 shows the population sizes of foreign-born communities in the seven BC cities with the highest foreign-born population. The analysis focuses on Chinese-born and South-Asian-born residents, because these communities provide a sufficient sample size for analysis. (7)

Approximately 45 percent of the "Chinese-born" population were born in Hong Kong, 39 percent in the People's Republic and 16 percent in Taiwan (not in Table 3). The largest concentration of Chinese-born immigrants (both in absolute and relative terms) exists in Vancouver (Table 3). While Victoria has a much smaller Chinese-born population, other cities in BC lack a significant Chinese-born community. The South-Asian-born population also concentrates in Vancouver; in addition, it is strongly represented in Abbotsford. Although the South-Asian-born population is small in Kelowna, Nanaimo, Kamloops and Prince George, it is still larger than the Chinese-born population in these cities.

The literature suggests that in Vancouver economic and labour market opportunities for both Chinese-born and South Asian-born immigrants are intimately linked to the presence of sizeable foreign-born communities (Olds 1998, Mitchell 1995, 1996, Walton-Roberts and Hiebert 1997). I would therefore expect high self-employment and low unemployment rates among both groups in Vancouver relative to Victoria and other BC cities, which host smaller foreign-born communities. Table 4 (8) depicts the labour force activities of Canadian-born, Chinese-born and South Asian-born residents who work or seek work (i.e. who are active in the labour force). Self-employment rates of Canadian-born men and women are highest in Abbottsford, Kelowna and Nanaimo; they are lower in Victoria and Vancouver; and they are lowest in Kamloops and Prince George. Unemployment rates among Canadian-born workers are lower in Vancouver and Victoria than in other cities. These figures for Canadian-born workers provide a point of reference for Chinese-born and South-Asian-born workers.

Self-employment rates among Chinese-born workers are generally higher than among Canadian-born workers (except for Kelowna). Among Chinese-born men self-employment rates are highest in Nanaimo and Prince George; Chinese-born women have high self-employment rates in Nanaimo, Kamloops and Prince George--all cities with small Chinese-born communities. Strikingly, high self-employment rates tend to occur in cities where the Chinese-born have low unemployment rates. This finding contradicts the idea that high unemployment rates push foreign-born workers into self-employment (Li 1997, 2000). Vancouver, with its large Chinese-born community, is not associated with lower unemployment rates or higher self-employment rates as predicted by immigrant, ethnic economy and middleman theories.

Despite the large South-Asian-born community in Vancouver relative to Victoria, self-employment rates among South-Asian-born men in Vancouver are not higher than in Victoria. In addition, unemployment rates among men and women are higher in Vancouver than in Victoria. In Abbottsford, which has a relatively large South-Asian-born community, South-Asian-born men and women have relatively low self-employment rates and comparatively high unemployment rates. Contrary to predictions of the ethnic economy theory, a large local ethnic community is not necessarily associated with high self-employment rates or low unemployment rates.

Neither of the two foreign-born groups replicate the patterns of self-employment and unemployment rates of Canadian-born labour force participants. Thus, it is unlikely that local labour market circumstances have a similar effect on the employment outcomes of Canadian-born, Chinese-born and South-Asian-born workers. Nevertheless, the size of the local immigrant community does not seem to be the defining factor of employment outcomes either. Vancouver's large Chinese and South-Asian-born communities do not appear to facilitate self-employment to a greater degree than some other urban settlement contexts. In addition, unemployment rates are often lower in cities where large ethnic foreign-born communities are absent.


In this analysis I found mixed evidence as to whether immigrants benefit from settling in places where large immigrant communities are already established. Labour market participation rates and incomes are often higher among immigrants settling in Victoria and non-metropolitan areas of BC than in the gateway city of Vancouver. This finding seemingly contradicts the prediction of immigrant and ethnic economy theories, which propose that immigrants obtain a benefit from locating in places with large immigrant populations.

A major lesson from this research is that the relationship between the size of local immigrant and ethnic communities and labour market outcomes cannot easily be packaged into any simplified model of explanation. For example, the association between immigrant communities and labour market outcomes is highly contingent on gender, period of immigration and place of birth. In addition, as outlined in the literature review, the effect of immigrant and ethnic communities is ambiguous and can produce various outcomes. The evidence presented above suggests that neither human capital theory nor immigrant and ethnic economy theories, nor middleman or queuing theories provide full explanations for the labour market situation of immigrants in BC settlement contexts.

Although the analysis attempted to account for possible self-selection effects by disaggregating the data by levels of education, other factors which are often associated with self-selection remain unaccounted for. For example, a disproportionate share of immigrants may have moved to a city in order to assume pre-arranged employment. This process could possibly explain the high average incomes of immigrants in Victoria. On the other hand, chain migration pattern may attract immigrants to settlement context where few labour market opportunities exist. In this case, self-selection could have a negative impact on employment outcomes.

Policy makers who support incentives for immigrants to settle in smaller cities and remote areas should consider the economic impacts on immigrants themselves, not only the benefits to local communities. In this respect, settlement in midsize cities and even rural areas may offer improved labour market prospects to some newcomers. However, immigrants' country of birth, gender and the effects of existing local immigrant and ethnic communities must also be considered in any policy framework. In addition, if immigrants are offered jobs with decent wages in places outside of Vancouver and Victoria, then self-selection processes are likely to have positive impacts on employment rates and incomes.

A limitation of the analysis above is that it used the labour market situation of Canadian-born workers as a proxy for the overall demand structure of the local labour market. This proxy, however, may not fully account for local labour market particularities, which could affect newcomers and Canadian-born workers in different ways. In addition, Canadian-born workers and immigrants may cluster in different occupational segments of the labour market, something this paper did not account for. Furthermore, the data did not enable me to completely isolate immigrant and ethnic economies, i.e. whether immigrants actually worked for, or hired, other immigrants and/or members of the same ethnic group. Qualitative research (Ley 1999, Zhou 2000) could complement this current study and shed further light onto the causal processes that shape the labour market outcomes for immigrant workers in different settlement contexts.

Another important limitation of this study is that activity in the informal economy is usually not reported in the census. Participation in the informal economy may be a frequent practice and ethnic communities may be a crucial factor for obtaining informal jobs. By not accounting for informal employment, census data may underestimate the income and labour force participation rates among newly arriving immigrants and thereby exaggerate the labour market gap between Canadian-born and immigrants, especially in Vancouver. At the same time, exploitative labour conditions are probably more prominent in the informal economy than in the formal economy (Bonacich 1993). Thus, the effect of this limitation is unclear. Given these limitations and the inconsistent observed relationship between place of settlement and labour market outcomes, more research is needed to advise policy makers on the dangers and benefits of attempts to direct immigrants towards smaller communities.
Table 1: Immigrant Status by Settlement Context, 1996

 Total BC Vancouver Victoria Non-CMA

Total * Number 3,661,308 1,791,324 297,972 1,572,012
Canadian-born (%) 75.4 64.8 81.3 86.4
Immigrant (%) 24.6 35.2 18.7 13.6
Recent Immigrants 5.8 10.5 1.7 1.3
(1991-96) (%)

Source: 1996 Census of Canada: The Nation Series, 20% Sample Data.

* excludes non-permanent residents

Table 2: Immigrant Status by Settlement Context and Level of
Education, Ages 15-65,1996 (%)

Level of Education BC Vancouver Victoria Non-CMA

 Canadian by Birth


Below High School 29.9 24.7 24.8 35.1
High School or 45.8 43.7 44.8 47.7
 Trade Certificate
University 24.4 31.6 30.4 17.2


Below High School 26.2 21.2 20.3 31.7
High School or 48.1 47.5 45.1 49.1
 Trade Certificate
University 25.7 31.2 34.6 19.2

 Immigrants Men

Below High School 23.3 23.7 13.6 24.5
High School or 40.4 38.0 43.5 47.7
 Trade Certificate
University 36.3 38.3 42.9 28.1


Below High School 27.0 27.2 18.5 28.3
High School or 41.4 39.7 44.1 46.4
 Trade Certificate
University 31.7 33.1 37.5 25.3

 Recent Immigrants (1991-96)


Below High School 27.0 28.7 16.1 33.3
High School or 33.5 37.2 38.7 35.4
 Trade Certificate
University 39.5 34.1 45.2 31.3


Below High School 28.8 27.1 17.0 28.4
High School or 37.1 32.9 36.2 38.6
Trade Certificate
University 34.1 40.0 46.8 33.0

Source: 1996 PUMF

Table 3: Total Population by Place of Birth and Selected Cities,
15 years und Over Not Attending School Full-Time, 1996

 BC Vancouver Victoria Abbotsford

Total Number 33,689,755 1,813,935 300,035 103,895
Canada 2,756,530 1,156,365 240,390 80,265
Outside Canada 903,195 633,740 57,800 23,340
Americas 87,145 45,815 8,010 3,055
Europe 361,985 190,680 36,055 10,250
Africa 26,865 21,805 1,675 420
Asia 401,175 355,270 11,055 9,125
China * 222,355 210,395 5,450 785
South Asia 80,165 58,445 2,200 7,175
Oceania & Other 26,015 20,170 1,000 485

 Kelowna Nanaimo Kamloops Prince George

Total Number 88,455 120,785 75,630 74,725
Canada 75,765 100,595 66,575 66,390
Outside Canada 12,405 19,860 8,675 8,180
Americas 1,590 2,205 1,220 1,280
Europe 8,800 13,820 5,250 4,890
Africa 190 465 150 150
Asia 1,510 2,865 1,830 1,730
China * 280 645 475 470
South Asia 725 940 910 945
Oceania & Other 310 500 230 145

* Includes People's Republic of China, Hong Kong, Taiwan

Source: 1996 Canadian Census-Basic Summary Tabulations (BST)

Table 4: Labour Force Activity by Place of Birth and Settlement
Context, Labour Force Participants, Not Attending School Full-Time,

 BC Vancouver Victoria Abbotsford

 Canadian by Birth


Total Labour Force 707,375 299,985 59,690 25'795
Self-Employed (%) 16.5 16.0 16.6 16.9
Worker (%) 74.1 76.8 75.9 75.2
Unemployed (%) 9.3 7.2 7.5 7.9


Total Labour Force 591,700 256,940 55,155 20,670
Self-Employed (%) 10.7 9.7 9.7 11.7
Worker (%) 81.6 84.2 84.3 80.9
Unemployed (%) 7.7 6.1 6.0 7.3

 China (PRC, Hong Kong, Taiwan)


Total Labour Force 46,635 43,800 1,375 145
Self-Employed (%) 24.0 23.8 22.9 19.2
Worker (%) 67.5 67.6 71.3 80.8
Unemployed (%) 8.4 8.6 5.8 0.0


Total Labour Force 40,425 38,050 1,150 135
Self-Employed (%) 13.6 13.0 17.7 20.0
Worker (%) 76.6 77.0 76.7 68.0
Unemployed (%) 9.7 10.0 5.6 12.0

 South Asia


Total Labour Force 29,985 21,750 815 2,885
Self-Employed (%) 14.1 15.4 18.4 9.5
Worker (%) 73.0 72.3 75.5 70.1
Unemployed (%) 12.9 12.3 6.1 20.4


Total Labour Force 22,270 15,700 635 2,510
Self-Employed (%) 4.7 4.9 1.6 2.4
Worker (%) 70.6 71.9 81.9 62.0
Unemployed (%) 24.7 23.2 16.5 35.7

 Kelowna Nanaimo Kamloops Prince George

 Canadian by Birth


Total Labour Force 29,050 17,870 19,440 18,080
Self-Employed (%) 20.5 17.5 14.3 9.9
Worker (%) 70.8 70.7 74.5 76.8
Unemployed (%) 8.7 11.7 11.2 13.3


Total Labour Force 24,920 14,960 16,455 14,945
Self-Employed (%) 11.3 11.0 9.1 8.4
Worker (%) 80.4 78.0 81.4 82.0
Unemployed (%) 8.3 11.1 9.5 9.6

 China (PRC, Hong Kong, Taiwan)


Total Labour Force 70 * 135 90 * 150
Self-Employed (%) 14.3 37.0 22.2 28.6
Worker (%) 85.7 63.0 66.7 71.4
Unemployed (%) 0.0 0.0 11.1 0.0


Total Labour Force 60 * 150 50 * 135
Self-Employed (%) 0.0 33.3 40.0 20.7
Worker (%) 100.0 60.0 60.0 72.4
Unemployed (%) 0.0 6.7 0.0 6.9

 South Asia


Total Labour Force 315 275 320 415
Self-Employed (%) 14.1 17.9 12.5 6.0
Worker (%) 60.9 66.1 84.4 88.0
Unemployed (%) 25.0 16.1 3.1 6.0


Total Labour Force 300 280 300 280
Self-Employed (%) 8.5 16.1 3.3 5.3
Worker (%) 67.8 67.9 77.0 77.2
Unemployed (%) 23.7 16.1 19.7 17.5

Source: 1996 Canadian Census, Department of Canadian Heritage custom

* Due to small sample sizes, caution should be used in interpreting
results in these categories.


I thank Dan Hiebert, Margaret Walton-Roberts, Randy McLeman and three anonymous referees for comments. Support was provided by the BC Ministry of Multiculturalism and Immigration, now part of the BC Ministry of Community, Aboriginal and Women's Services, and a Social Sciences and Humanities Research Council of Canada postdoctoral fellowship.


(1) Unfortunately, the data does not allow me to examine these cities individually for the labour market characteristics of immigrants. Only cross-tabulations on the aggregated non-CMA area outside of Vancouver and Victoria are available.

(2) I experimented with different age categories, in particular the 25-44 age category representing "prime working age (Badets and Howatson 1999)." Since the results of the analysis are robust across different age categories, I opted for the larger 15-65 age category to increase the sample size.

(3) Chi-Square tests show that the distribution across educational categories statistically differ between immigrant status groups and across settlement contexts at a .01 significance level.

(4) I did not use a multivariate modeling approach because I already disaggregated the data by gender, education and settlement context, and because "many of the factors controlled for in [multivariate models] (e.g., part-time vs. full-time status, or occupation) are products of the same processes that govern wage rates. From this viewpoint, the methodology of creating a model based on independent variables and controls is inherently suspect (Hiebert 1999: 346)." Although the disaggregation of the data by gender, education and settlement context reduced sample sizes, the smallest category (i.e. working male recent immigrants with below high school education who settled in Vancouver, Table 4) still contained n=108 cases, which is sufficient for statistical analysis. Unfortunately, the PUMF does not allow me to disaggregate the data for non-CMA areas into mid-size and smaller cities.

(5) A series of Chi-Square tests revealed that labour force participation rates among Canadian-born residents in the same gender and education category statistically differ between settlement contexts at a .01 significant level, and that labour force participation rates for all immigrant and recent immigrant groups statistically differ at a .01 significance level. Despite these statistical differences, the graphs visually demonstrate that the magnitude of the difference is relatively small among Canadian-born residents compared to immigrants and recent immigrants.

(6) Although ANOVA tests indicated that the mean incomes statistically differ at a .01 significance level between settlement context for all gender, immigrant status and educational groups (including Canadian-born workers), visual comparison illustrates the greater variability among the mean incomes of immigrants vis-a-vis Canadian-born workers.

(7) Unfortunately, it was not possible to disaggregate the data further by period of immigration.

(8) I am grateful to a reviewer who provided the data for this table. I was unable to disaggregate the data further by immigrant status or level of education.


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Harald Bauder

Department of Geography

Univesity of Guelph
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Author:Bauder, Harald
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Date:Dec 22, 2003
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