Stephen Tino is a first-generation Canadian whose upbringing was rooted in the immigration experience. As a PhD candidate in the Department of Economics at the University of Toronto, he has been drawing on that experience to explore the pay gap between immigrants and non-immigrants in the country.
“In various countries around the world, immigrants tend to earn less than non-immigrants,” Tino explained. “The pay gap in Canada is around 16%, and this is similar to the pay gap in other countries. A lot of previous research into the immigrant pay gap focuses on the skills of the workers, such as the language skills of immigrants when they come to a new country or their literacy, or how the different types of education they receive in their home countries might not translate to the same types of jobs in the host country.
“What I do is look at the role of employers and think about the precise mechanisms by which employers set wages and operate, which might affect immigrants differently than non-immigrants and cause them to earn less. I focus on mechanisms like wage-setting power, where employers can set wages differently for different groups and potentially pay immigrants less than non-immigrants. I also investigate the role of firm productivity, or how profitable and productive firms are, and how this affects earnings for immigrants compared to non-immigrants.”
Tino’s primary data source for the study came from the Canadian Employer-Employee Dynamics Database, or CEEDD. The extensive database contains information on the entire taxable population of individuals and businesses in Canada for about two decades. It also includes detailed information about immigrants, such as their immigration category, i.e., whether they are economic class migrants, refugees, or family class immigrants. This dataset allows Tino to infer the wage-setting power of employers and how they set wages for diverse groups.
“This paper was driven by my need to research one of the most important issues in Canada right now,” Tino said. “Yes, my interest in immigration comes from my family, it’s a topic close to home for me, but I’ve always been interested in understanding the sources of earnings inequality and the reasons why some people earn less than others. Understanding these issues can help develop policies that improve the economic integration of immigrants.”
In Canada, outside minimum wage legislation, employers set salaries, and they can, and do, use that wage-setting power to pay immigrants less than non-immigrants, Tino’s results show.
On average, the typical worker in Canada earns about 82% of the value they produce,” Tino said. “Non-immigrants tend to earn around 84% of the value they produce, while immigrants only earn around 77%. Immigrants also tend to work at more productive firms compared to non-immigrants. This helps reduce the pay gap, but immigrants are still paid less for the value they produce, even if they work at more productive firms.”
Tino’s job market paper, Labor Market Power, Firm Productivity, and the Immigrant-Native Pay Gap, is not his first entry in the realm of immigration economics.
“His other papers examine the rapid increase in international college students on local labor market outcomes and the effect of permanent residency on job mobility and earnings using matched employee-employer data,” said Professor Kory Kroft, Tino’s dissertation supervisor. “Stephen is a pleasure to co-author with and is hard working. We have several projects we are collaborating on related to immigration in Canada and I continue to learn a lot from him.”
Through Kroft, Tino became connected to Professor David Green of the University of British Columbia and Professor Mikal Skuterud of the University of Waterloo. The trio’s idea to study the recent increase in international students, and its effect on the economy, was born from conversations.
“Working with top scholars like David and Mikal has been amazing,” Tino said of the experience. “They’re very plugged into the top issues, and we’ve been writing the paper to speak to what we think is one of the most important issues in Canadian policy. In addition to contributing to the public policy debate, our paper is informative about the causal effects of immigration on the economy more generally.”
The work also emphasized Tino’s core academic values. The spirit and necessity of collaboration colours all his academic activities.
“Collaboration and teamwork are important in both research and teaching, as everyone brings something to the table,” Tino said. “In the economics community, you have experts with different backgrounds who sometimes disagree. Collaboration allows new ideas to be generated, building on people’s strengths and experiences. Listening to what others have to add and drawing on their strengths helps to come up with joint solutions to important problems. It’s been a great learning experience to focus on what’s important and come up with methods to answer important policy questions.”
Tino, who has been a teaching assistant for undergraduate microeconomic theory for many years also has experience teaching statistics and was the course instructor for a quantitative methods in economics class during his PhD.
“I found teaching to be a really enriching experience. Data literacy is important for everything, especially in economics,” he said. “Understanding the difference between correlation and causation is key, and teaching students these concepts is crucial. My experience is that students are quite collaborative in their classes. When there is a lot of communication between students, and between students and me, it creates a good environment for learning together about data literacy and economics.”
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