1. Incidence and Returns to Apprenticeship Training in Canada: The Role of Family Background and Immigrant Status Ted McDonald Department of Economics University of New Brunswick Christopher Worswick Department of Economics Carleton University 1

2. Background: Immigration and the Skilled Trades Canada historically has relied extensively on immigration to help meet the demand for skilled tradespeople, but selection of skilled immigrants has shifted in favor of tertiary qualifications – esp. 1990s reforms to the points system. ◦ Bill C50 (2008) makes it easier for immigrants with skills in short supply to immigrate to Canada. Composition of immigrant inflows by source country has changed very significantly over time, in large measure towards immigrants from Asia and away from UK/Europe (regions from where many skilled tradespeople had originated) Given the evolution of immigration flows, much of the demand for skilled tradespeople must be met by the resident Canadian population, an increasing proportion of whom have non-European backgrounds. 2

3. Research Questions What is the incidence of apprenticeship completion among immigrant and non-immigrant Canadians? ◦ What does the changing composition of immigrants over time mean for the takeup of apprenticeships by the children of these immigrants – i.e., are there intergenerational effects? What are the rates of return and employment outcomes of those individuals who have completed an apprenticeship, and do they vary by immigrant status? The main focus of this paper is on apprenticeships obtained in Canada by child arrivals and second generation Canadians ◦ For tractability, we do not consider the issues of credential recognition, nor the related decision by adult arrivals to return to education after arriving in Canada 3

4. Data Confidential Masterfile of the 2006 Census of Canada (20% sample, n ~ 6 million) ◦ Completion of the census questionnaire is compulsory ◦ ‘Highest level of education’ specifically identifies apprenticeships for the first time in 2006 ◦ Country in which highest level of education was obtained is reported for the first time in 2006 4

5. Strengths ◦ Very detailed data on field of study, current occupation, annual earnings, weeks of work, sources of income ◦ Precise data on country of birth, year of arrival, age at arrival Limitations ◦ No data on educational qualifications other than the highest level obtained ◦ No data on educational qualifications undertaken but not completed ◦ No data on educational qualifications of parents 5

6. Methods We identify four groups and focus on the latter three ◦ Immigrants arriving as adults ◦ Immigrants arriving as youth ◦ Canadian born 2 nd generation ◦ Canadian born 3 rd generation or later We focus only on men. Apprenticeship rates for women are in the order of 2%, and a large majority of women apprenticeship holders completed apprenticeships in hair styling and similar service sector fields that are relatively low-paid We include controls for 5yr cohort of arrival (landing) in Canada, region of birth (1 st gen), region of birth of father (2 nd gen). With a single cross-section, we cannot disentangle cohort and years-since- arrival effects. 6

7. Intergenerational effects for 1 st gen child arrivals and 2 nd gen, aged 29-44 years in 2006 ◦ The proportion of male immigrants aged 45-64 and born in the respondent’s father’s country of birth who have completed an apprenticeship ◦ This variable is set to zero for individuals with a father born in Canada (3 rd + gen and mixed background individuals) This effect is identified in the presence of controls for broad region of birth based on inter-country variation within these regions (120+ countries) Ideally, we would use 1981 or 1986 data to construct these measures. We would need 1980s census files to consider intergenerational income effects 7

8. Possible transmission channels Father-son information and role modeling Ethnic community and/or peer effects Employer effects – apprenticeship enrolment and completion requires finding an employer willing to take on the apprentice. This may be more easily done through one’s own family or ethnic peer group Unobserved country-specific heterogeneity 8

9. 9 Table 1: Educational attainment by generation of immigrant arrival in Canada (aged 28-65)

10. Table 2: Average Weekly Earnings ($) by Generation of Immigrant Arrival in Canada and Level of Education 10

11. Table 3: Proportion of individuals who completed an apprenticeship, by region of birth 11

12. Incidence of completed apprenticeship – Logit (MEN) 12

13. Incidence of completed apprenticeship – Logit (MEN) 13

14. Determinants of log earnings - OLS (MEN) 14

15. Determinants of log earnings - OLS (MEN) 15

16. Determinants of log earnings - OLS (MEN) 16

17. Earnings regressions - extensions Including 18 indicator variables for field of study has little substantive effect on the 1 st and 2 nd generation immigrant effects ◦ The earnings gap of immigrants with apprenticeships who were born in Western Asia or in the developing parts of East Asia are a little smaller in magnitude, suggesting that differences in field of study explain a small part of the earnings discrepancy. Similarly, including 10 indicator variables for occupation of employment has little substantive effect Controlling for weeks of work during the reference year also has no effect on the immigrant earnings gap 17

18. Implications for policy Selection of immigrants based on tertiary qualifications and the changing composition by source country have contributed to lower takeup of apprenticeships by immigrant children. Source country differences persist for Cdn-born 2 nd generation ◦ The magnitude of these effects might become more important over the next decade, as the children of 90s-00s immigrants enter the workforce Policies similar to those implemented to attract women into skilled-trade apprenticeships may be needed for younger immigrants and ethnic minority groups 1 st and 2 nd gen. minorities may benefit from employment assistance following completion of an apprenticeship to help guide them into skilled trades 18