The Short-Term Effects of COVID-19 on Labour Market Outcomes of Recent Immigrants to Canada

Our difference-in-difference analysis indicates that Covid-19 had a disproportionately adverse effect on the employment of recent immigrants relative to the Canadian-born and this was especially the case in lower-level occupations and in industries hard hit by the pandemic. The effects of Covid on actual hours worked for those who remained employed were modest as were the differential effects for recent immigrants, highlighting that most of the adjustment occurred in the extensive margin of reduced employment rather than the intensive margin of hours worked. Covid was associated with higher wages for recent immigrants who remain employed relative to their Canadian-born counterparts, and this is especially the case for recent immigrants in lower-level occupations and hard-hit industries. Reasons for these patterns are discussed.