A study titled, An Analysis By Gender & The Role Of Immigration defines human capital as an individual’s knowledge and skills from proper training, education, and experience – measured as the current value of future earnings.
For instance, people’s human capital is their current earnings and what they expect to earn until they retire. In addition, the government calculates this using information from the census, thus surveying life expectancy & mortality rates.
If a person makes a massive investment in their education or somehow acquires work experience that adds value to their career, their level of human capital would rise with the new expected earnings.
Immigrants & Human Capital in Canada
Canadian immigrants (both men & women) were found to have a lower average human capital than Canadian-born ones.
Still, the study shows that immigrants have increased their contributions to Canada’s average human capital growth. This is in significant part because the number of immigrants is also growing. In the year 1970, Canada welcomed 147,700 immigrants. This figure reached an all-time high of 341,000 at the year’s end. Moreover, by the end of 2025, Canada will hit its target of welcoming over 500,000 new permanent inhabitants.
Both immigrant men and women have increased their human capital growth over time. The majority of Canada’s human capital growth after 1995 came from immigrants.
In addition, the study attributes 56% of the growth to immigrant men & 44% to immigrant women. Eighteen percent of Canada’s overall human capital increase occurred before 1995, and it was all due to immigration.
Immigrants made up 25% of Canada’s working-age population by 2020, up from 19% in 1995, and their average human capital development outpaced that of native-born Canadians.
Today, immigrants make up nearly a quarter of Canada’s total population & are responsible for 100% of the labor force growth along with 75% of the economic growth.
Immigrants & Canadian Women – The Gender Pay Gap
As a percentage of the overall human capital, women’s share grew from 30% in 1970 to 41% in 2020.
As more & more women entered the workforce in Canada, this percentage rose quickly until 1995. As a result, women’s portion of the economy’s human capital increased from 30% to 39% between 1970 and 1995. From 1995 to 202, the percentage increased to 41%.
Even though the gender gap has shrunk over time, it was found to be still prominent between Canadian-born women and immigrant women. For example, in 1970, immigrant women had roughly 31% of immigrant human capital, while Canadian-born women had 36% of the same.
Between 1970-2020, the gender gap narrowed at a similar pace for both immigrant & Canadian women.
In addition, the study found that gender gaps among immigrants existed on almost every level, particularly for high school graduate immigrant women or below.
Moreover, the study also showcases an increase in total wealth per capita arising from more women’s labor force participation – a higher education level or a raise in women’s earnings. This signals a high level of future income for a nation.
Finally, the study ends by suggesting that there should be policies that increase labor force participation, earnings, and working hours, thus increasing women’s human capital & income in the future.