Ferrer, Ana, David A. Green, and W. Craig Riddell. 2006. “The Effect of Literacy on Immigrant Earnings.” Journal of Human Resources 41(2): 380–410.
We examine the impact of literacy on immigrant earnings and the sources of lower returns to education and experience among immigrants. We find that the native-born literacy distribution dominates that for immigrants. However, the two groups obtain similar returns to literacy skills, contrary to discrimination-based explanations for immigrant—native-born earnings differentials. Among the university-educated, literacy differences account for about two-thirds of the earnings gap. However, low returns to foreign experience have a larger impact on this differential. Among the less educated, literacy differences and differences in the returns to experience have similar effects on the earnings differential.
Ana Ferrer is an adjunct assistant professor of economics at the University of Calgary; David A. Green and W. Craig Riddell are professors of economics at the University of British Columbia. The authors wish to thank Scott Murray for providing access to the OILS data, and Statistics Canada and the SSHRC for research support. They are also grateful to the referees and to seminar participants at the University of Copenhagen, University of Western Ontario and UBC for their helpful comments. The data used in this study were provided under contract with Statistics Canada and cannot be released by the authors. Individuals wishing to request access to these data should contact Yvan Clermont at Statistics Canada yvan.clermont@statcan.ca or one of the authors.