Study: Immigrant women closing the human capital gender gap

Statistics Canada has released a new study that demonstrates women’s contribution to the overall level of human capital in Canada from 1970 to 2020 (50 years).

The study, Accumulation of Human Capital in Canada, 1970 to 2020: An Analysis by Gender and the Role of Immigration, defines human capital as an individual’s knowledge and skills that come from education, training, and experience, measured as the present value of future earnings. It says that human capital is the most important component of total wealth.

For example, a person's human capital is their present earnings and what they can expect to earn until they retire. The government calculates this using data from the census, labour force surveys, life expectancy and mortality rates.

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If a person makes a large investment in their education or somehow gains work experience that adds significant value to their career, their level of human capital would rise with their new expected earnings.

Immigrants and human capital in Canada

Canadian immigrants of both genders were found to have lower average human capital than those who are Canadian-born.

Still, the study shows that immigrants have dramatically increased their contributions to average human capital growth in Canada. This is in large part because Canada has been increasing the number of immigrants. In 1970, Canada welcomed 147,700 immigrants. By the end of 2019, this number climbed to 341,000 and it is expected that by the end of 2025, Canada will hit its target of welcoming 500,000 new permanent residents each year.

Immigrant women and men have both increased their human capital growth over time. After 1995, immigrants accounted for about 40% of the overall growth in human capital in Canada. The study attributes 56% of that growth to immigrant men and 44% to immigrant women. Before 1995, immigrants accounted for about 18% of Canada’s total human capital growth.

Between 1995 to 2020, the number of immigrants in the working-age population rose from 19% to 25%, and the growth in the average human capital of immigrants exceeded that of the Canadian-born population (0.88% per year for immigrants vs. 0.62% per year for the Canadian-born population).

Immigrants now make up nearly a quarter of Canada’s total population and are responsible for almost 100% of its labour force growth and 75% of its economic growth.

Gender gap between immigrant and Canadian women

The share of total human capital accounted for by women rose from 30% in 1970 to 41% in 2020.

The increase in that share was much faster up to 1995 because of the high number of women joining Canada’s labour force. From 1970 to 1995, the share of human capital of women rose from 30% to 39%. From 1995 to 2020, the share increased modestly from 39% to 41%.

Even though the gender gap (human capital of women relative to that of men) has shrunk over time, it was found to still be prominent between immigrant women and Canadian-born women. In 1970, immigrant women had roughly 31% of the human capital of immigrant men while Canadian-born women had 36% human capital as Canadian-born men.

Between 1970 and 2020, the gender gap narrowed at a similar pace for both immigrant and Canadian women (66% and 71%, respectively, in 2020).

The study found that gender gaps among immigrants existed for almost all age groups and education levels, particularly for immigrant women with a high school education or below.

The study notes an increase in total wealth per capita arising from more female participation in the labour force, a higher education level for women or a raise in women's earnings, signals a high level of future income for a nation.

The study concludes that there should be policies that increase the labour force participation, earnings and hours worked of women now to increase the human capital and the income of women in the future.

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