When it comes to hot topics like immigration and gender roles in the workplace, popular rhetoric doesn’t always separate common sense from shared fallacies. Xiner Xu wants the evidence to help her make that distinction. The result of Xu’s need for evidence is two research projects that are filling in the gaps between what no one knows, and what people just think they know, about the Canadian economy and its labour market.
The first is a research paper, “Understanding Firm Responses to Immigration Shocks,” that examines how Canadian businesses responded to the arrival of a large wave of immigrants who entered the Canadian labour market between 2016 and 2018.
“I was hearing and reading public arguments that related immigration to the declining productivity of the Canadian economy, and I thought it deserved some rigorous examination, so that’s some of what I’m trying to do in this paper,” the PhD candidate with the Department of Economics explained. “I am looking at the effects on innovation and productivity through how Canadian businesses access immigrants’ expertise and abilities as waves of immigrants enter the labour market.”
Using data from the tax filings of both individuals and business entities, Xu was able to match employer and employee data that she then linked to immigration records. The linkages enabled Xu to see the immigration history of each employer’s employee in terms of where they came from, when they arrived, and when their employment experience began with that employer.
From her review of existing literature, Xu already knew that immigrants tend to co-settle with co-ethnics, creating ethnic clusters of communities within communities. What Xu’s data showed her that this kind of a pattern is replicated in employment among specific businesses’ employees as well.
“There are ethnic clusters within employers, which means that businesses have differential access to these new arrivals,” Xu said. “I want to see what that differential access meant for businesses with access versus those that don’t have it.”
What followed was a comparison of how access to newcomer labour affected two Toronto-based businesses. Her findings ultimately contradicted beliefs that immigration takes jobs away from the settled population.
“Contrary to a lot of people’s perceptions, businesses that have a better access to immigrants, not only hire more immigrants, but they also don’t inhibit opportunities for native-born Canadians,” Xu said. “I also didn’t find anything that suggests immigrants suppress local wages. Instead, I see that firms grow more rapidly after they absorb new arrivals. As for the impact on productivity, I don’t see any evidence that hiring more immigrants is crowding out any sort of a capital investment. It’s clear that an abundance of labour doesn’t disincentivize firms from engaging in innovation and R&D.”
When employers need to hire, current employees who belong to the same ethnic groups as new arrivals, function as informal ambassadors who vouch for both the new wave of immigrants and for their employers. These co-ethnic employees also give their employers insider knowledge about education standards and the meaning of past work experience they wouldn’t normally have.
“These firms are absorbing immigrants with human capital that’s not really recognized by the broader labour market because they are foreign-educated and have no Canadian work experience,” Xu explained. “My intuition is that these employers are better positioned to evaluate the quality of recently arrived immigrants, consistent with the fact that they recruit greater number of candidates without Canadian credentials.”
For her next project, Xu is delving into a study of the labour market where there is also a strong need for good evidence. Xu is working with Kourtney Koebel, Assistant Professor with the University of Toronto’s Centre for Industrial Relations and Human Resources to understand how government childcare policies and subsidies impact childcare workers.
While it is well-documented that childcare workers earn lower wages than workers in jobs requiring similar education and experience, there is not an understanding as to why care work is so undervalued or how that undervaluation came about and continues. Funded in part by the Institute for Gender and the Economy (GATE), the project will examine the introduction of universal childcare in Quebec to ascertain how government subsidies impact the childcare provider market. The research has important policy implications as Canada’s federal government rolled out a national low-cost childcare program in 2021.
“There are two things we are interested in,” Xu said. “First, system welfare. What do government subsidies do for existing early childhood educators as childcare providers? Second, who is going into the profession and who is leaving and why? Anecdotally, we know the provision of universal childcare in Quebec was a very stressful transition for these providers, because basically they’re class sizes expanded very rapidly while the struggle to catch up their pay levels continued for a good number of years. Ultimately, what happens to the quality of providers and care we have at the end of the day? It’s a very important question because the evaluation of the Quebec childcare policy, so far, has yielded a mixed bag of evidence.”
The Xu-Koebel collaboration excited the review committee at GATE who ultimately granted the team $5000 in support of the project.
“Our reviewers saw this research project as one that will bring insights to light about women’s participation in the workforce, about pay equity and closing the wage gap, and about creating social equality,” said Lechin Lu, Associate Director of GATE. “It is also research in a Canadian context, which is one of our key priorities. We want to enrich this kind of analysis and thinking around key issues like the availability of affordable childcare.”
In Xu, Koebel believes she has found the right colleague to meet the expectations attached to this research.
“When I met Xiner in the University of Toronto’s Research Data Centre two years ago, I was instantly impressed with the rigour of her thinking and how interesting and topical her research is,” said Koebel. “I am very excited that we have the opportunity to collaborate on a project that overlaps with our common interest in worker and employer dynamics in the labour market. She brings with her the rigorous applied econometrics skills and creative thinking required to make this project a success!”
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