Social capital and labour market outcomes of recent immigrants to Canada: Employment entry, wages and duration of access to the first job in intended occupation

This thesis consists of three studies on the role of social capital on the economic performance of recent immigrants to Canada in terms of employment probability, wages and time taken to access to the first job in intended occupation. The first study addresses literature gaps by performing an empirical analysis of the relationship between social capital and employment entry of recent immigrants using the Longitudinal Survey of Immigrants to Canada (LSIC). The research builds indicators of social capital based on a network-based concept using information unique to the LSIC, considering the types of networks (kinship, friendship, organization) and their content (size, diversity, density, quality). The study further explores the relationship between those indicators and employment likelihood of immigrants, using panel logit models including fixed-effects, random-effects and generalized estimating equations (GEE) population-averaged models to control for unobserved individual heterogeneity. The analysis reveals significant variability in the social capital stock across immigration classes and ethnic groups; furthermore, social capital stock, as measured by various indicators, influences the probability of employment in the initial four years. Possibly through a more ethnically diverse network, social capital plays an important role in facilitating the economic assimilation of recent immigrants in terms of a higher probability of getting employment. The second study of the thesis investigates the interactions between social capital and immigrants' wages, attempting to deal with some of the difficulties faced by previous studies on returns to social capital. The suspected correlation between social capital and unobserved individual ability motivates the study to treat social capital as endogenous. The estimator proposed by Hausman and Taylor (1981) is used to take into account this endogeneity. This estimator is then shown to be efficient and consistent and is favoured over other panel data estimators. The results indicate that social capital adds to human capital and has important effects on immigrant wages during their first years in Canada. Strong ties such as family networks and friends dominate weak ties such as organizations in helping immigrants get higher wages during their first four years in Canada. This is true especially for those who are disadvantaged with respect to their human capital. Meanwhile, the ethnic diversity of the workplace network is the most influential factor within social capital that affects wages for both male and female immigrants. Using detailed information on employment trajectory and intended occupation provided by the LSIC, the third study of the thesis examines the occupational outcomes of recent immigrants in terms of duration of access to the first job in intended occupation. The matching between actual and intended occupations is obtained from the first two digits of occupational codes, considering both occupation type and skill level. Using a Cox proportional hazard model framework, the study investigates the roles of both human capital and social capital in speeding up the matching process of actual and intended occupations. It finds that the initial year in Canada is critical for an immigrant to land a job in intended field and after this period the hazards of finding employment in intended occupation flatten down for both genders. The results confirm the hypothesis that while human capital such as education and language ability, especially English proficiency and Canadian work experience, facilitates an immigrant's employment access to his or her intended occupation, social capital, mainly friend networks, also plays a role in hastening access to employment in desired occupational fields for both genders