Immigrants' Economic Status in Toronto:
Rethinking Settlement and Integration Strategies
(Full Text Version)

©Lucia Lo, Valerie Preston, Shuguang Wang, Katherine Reil, Edward Harvey & Bobby Siu
This paper is presented for discussion and comments.  A revised version of this paper will appear as a chapter in the volume Integrating Diversity, to be published by CERIS-Toronto in 2001.  The authors acknowledge support from the Major Projects Initiative of CERIS-Toronto.

Although the Toronto CMA (Census Metropolitan Area) has one-twelfth of Canada’s population, it is home to approximately 43 percent of Canada’s recent immigrants. For its size, Toronto has three times as many immigrants as the rest of Canada and a much larger share of recent arrivals (City of Toronto Planning Department 1998). Since most immigrants are of working age, their economic participation, performance, and impact are of the utmost importance for both the immigrants themselves and Canadian society.

Immigrants participate in the labour market in three different ways: salaried employees, self-employed individuals, and entrepreneurs employing others. Their performance and success are often measured by their ability to achieve income parity with native-born Canadians and linked to their socioeconomic assimilation. Historically, the majority of immigrants have achieved some degree of economic success in the Canadian labour market. Upon entry, many immigrants earned wages and salaries lower than the earnings of comparable Canadian-born workers. But as length of residence in Canada increased, their earnings approached, and sometimes exceeded, those of Canadian-born workers. However, recent trends have led many analysts to question this benign historical view of immigrants’ economic integration. Since the 1980s, immigrants’ earnings have stalled and are not converging on those of comparable Canadian-born workers (DeVoretz 1985; Ley 1998; Reitz 1997). At a national level, there is also growing evidence that visible minority workers, many of whom have arrived since 1980, are stuck disproportionately at the bottom of the economic ladder (Akbari 1999; Lian and Matthews 1998; Reitz 1998).

Two factors have been proposed to explain immigrants’ recent economic performance: changes in local labour demand and local labour supply. In Toronto, deindustrialization since the 1970s has resulted in the loss of many manufacturing jobs; at the same time, employment in service sectors expanded (Norcliffe et al. 1986; Berridge et al. 1995). Different skills and experience are required for service and manufacturing jobs, contributing to the feminisation of the workforce. Labour demand in service industries is also bifurcated between well-paid, highly skilled professional positions and poorly paid, semi-skilled and non-skilled jobs. Since 1980, more newcomers have come from Asia, Africa, Latin and South America, and the Caribbean than from Europe. Until the mid-1990s, the share of immigrants admitted on the grounds of family reunification increased steadily; however, since 1994, trends have reversed. Independent and business immigrants account for a growing share of all immigrants. Many family-class immigrants are considered to have poor economic prospects in the new service-based economy (DeVoretz 1995).

Against the backdrop of industrial restructuring, many immigrants see self-employment and small business creation as an alternative to working as employees. The rate is slightly higher among immigrant men than native-born men, 16.6 percent versus 14.2 percent. Previous studies (Razin and Langlois 1995) have shown tremendous variations in the rates of self-employment for immigrant groups in Canadian cities and among those who are self-employed, an ethnic division of labour in which immigrant groups specialize in various industries. The impact of these ethnic businesses and their implications for the employment and incomes of immigrants are still debated. Some authors emphasize that ethnic businesses create job opportunities for immigrants who are unlikely to find other employment, while others highlight the low salaries, poor working conditions, and limited opportunities for advancement that characterize many jobs in ethnic businesses (Liu 1995).

Despite the rise of self-employment and small business development, there is growing evidence that many immigrants, particularly recent arrivals, women, and members of visible minorities, are encountering barriers in their quest for employment and entrepreneurial opportunities. One national study (Lian and Matthews 1998) found persistent differences in earnings among various immigrant groups, even when demographic and linguistic variables are controlled. A recent study by Ornstein (1996) acknowledges that some visible minority groups have low levels of education that contribute to high rates of poverty and unemployment. The findings underscore previous evidence (Ley and Smith 1997; Basavarajappa and Halli 1997; Kazemipur and Halli 1997; Sloan and Vaillancourt 1994; Li 1996; Marr and Siklos 1994; Harvey and Wortley 1993; Daenzer 1991) of significant differences in the economic achievement and assimilation of men and women from different immigrant groups. In this period of rapid economic change, with its diverse consequences for immigrants, public concern about the economic impact of immigrants on the host society has increased.

Existing studies seldom consider the many aspects of Immigrants' economic experiences outlined above. The diverse economic experiences of immigrants in Toronto have not been documented comprehensively. In this chapter, we analyze variations in the work and income experiences of Toronto's immigrants, as well as their economic impact on the host society. We aim to outline the current state of knowledge about the economic experiences of immigrants in Toronto and to identify research and policy gaps that impede efforts to facilitate immigrants' successful settlement.

The chapter is divided into four sections. In the first section we examine the changing division of labour by gender and ethnicity since 1971 as a result of deindustrialization, and compare the industrial distribution of employment of immigrants with that of Canadian-born workers. In the second section we attempt to uncover the extent of immigrant entrepreneurial activities in Toronto, the nature and structure of various ethnic economies, and their role and impact on the overall economy. Specifically, we want to find out why some immigrant groups are more entrepreneurial than others, what makes for successful enterprising, who benefits from this entrepreneurial behaviour, and what the pros and cons of ethnic economies are. Within the context of the industrial division of labour and self-employment activities provided in the first two sections, the third analyses the economic performance of Toronto's immigrants, which both reflects Immigrants' well being and has a major influence on their economic contribution to Canadian society. The analysis considers how the period of arrival in Canada and individual differences (to the extent that they are captured by gender and visible minority status) affect earnings, unemployment rates, and poverty rates. In the last section, we address the concerns of the Canadian public by exploring the economic impact of Toronto's immigrants on Canadian society. Specifically, we assess Immigrants' net contributions to the Toronto economy and, in a limited way, compare the contributions of different classes of immigrants.

Our attempt to explore in the same paper Immigrants' economic activities, performance, and impact necessitates the use of information drawn from a variety of sources, including previous research, unpublished studies, and original analysis of census and administrative data. It is inevitable that the data sometimes cover different time periods or use different classification schemes. Some information refers to 1996, some to the period between 1980 and 1995, and some to 1991. Nonetheless, these sources provide the most contemporary information available at the time of preparing this paper, and all of the sources contribute to our analysis of the period from 1971 to the present.

Since 1971, a series of empirical studies has highlighted the industries employing immigrants living in Toronto. Many immigrants work in a few industries, specifically, the goods-producing sectors of manufacturing and construction and certain consumer services (Preston and Giles 1997; Mata 1996; Richmond 1992). The industrial concentration of immigrants that is associated with low occupational status and low wages (Badets and Howatson-Lee 1998; Ornstein 1996; Richmond 1992; Reitz 1990, 1998) is also affected by ethnic origin and gender. Immigrants from different ethnic backgrounds often work in different industries as do immigrant men and women.

Turning first to ethnic origin, three types of immigrant workers have been identified. They include well-established immigrants similar to Canada’s charter ethnic groups of French and British who are mainly from the United Kingdom, Western and Northern Europe, and the United States and have employment patterns similar to those of the Canadian-born. Postwar immigrants from Italy, Portugal, Greece, and Eastern Europe form a second type whose incomes have increased fairly steadily despite concentrations of employment in construction, manufacturing, and consumer services. Despite their diverse countries of origin, immigrants from Asia, Africa, the Caribbean, and Central and South America, many of whom are visible minorities, are disproportionately concentrated in declining industries and in those that offer insecure and poorly paid employment (Mata 1996; Preston and Giles 1997; Reitz 1998).

Gender alters the effects of ethnic origin on Immigrants' employment (Boyd 1991; Preston and Giles 1996; Ornstein 1996; Reitz 1990, 1998; Richmond 1992). Immigrant women often work in different industries than immigrant men from the same ethnic group and in different industries than immigrant and Canadian-born women of the same ethnic background (Reitz 1990; Ornstein 1996). Gender effects differ among ethnic groups. Liu (1997) found no gender differences in the work histories of immigrants from Mainland China. He attributes the lack of gender effects to the particular history of this immigrant group, many of whom were admitted to Canada as permanent residents after the Tiananmen Square incident. Men and women were equally likely to be well-educated students who had been studying abroad at the time they decided to settle permanently in Canada.

In 1996, immigrants are significant participants in the Toronto labour market where immigrant men and women each account for almost one quarter of the workforce, 24.9 percent and 21.6 percent, respectively. Looking at the composition of the workforce for major industries, longstanding gender differences consistent with those reported nationally (Statistics Canada 1998) are evident for Canadian-born and immigrant workers (Table 1). Many women work in service industries, particularly consumer services, health and education services, and finance, insurance, and real estate services, while men are more likely to work in the goods-producing industriesCconstruction and manufacturingCand in the distributive servicesCtransportation, utilities, communication, and wholesale trade. Employment in accommodation, food, and beverage services is an exception to this pattern of gender differences. Among the Canadian-born, women and men have almost equal shares of employment in the industry, 22.8 percent versus 21.0 percent. The relationship is reversed for immigrant workers. Immigrant women are 24.5 percent of the workforce, while immigrant men are 31.7 percent. The large number of male immigrant workers may indicate difficulty finding suitable employment. Immigrants settle for jobs in the accommodation, food, and beverages sector because entry costs are low, skill requirements are minimal, and other job opportunities are not available to them (Waldinger 1996).

Analysis of the proportions of immigrant men and women's total employment in each industry highlights the importance of manufacturing jobs for immigrant workers. The sector employs 16.8 percent of immigrant women and 25.5 percent of immigrant men ( Table 2). Immigrants' continued reliance on manufacturing jobs as a major source of employment, at a time when employment in the sector is declining, renders them vulnerable to layoffs and unemployment. The unstable nature of employment in the other industries where large proportions of immigrants work underscores their vulnerability. For immigrant men, seasonal and cyclical construction jobs account for 8.9 percent of all their jobs, whereas for immigrant women, other services, a catchall category for many consumer services, in which insecure and poorly paid jobs predominate, comprise 9.9 percent of all their jobs. Furthermore, only small proportions of immigrant men and women work in educational, government, and business services, service sectors where, traditionally, employment has been well paid and secure.

Location quotients that compare the proportions of immigrant women's employment in each industry with those of Canadian-born women and the proportions of immigrant men's employment with those of Canadian-born men confirm the vulnerability of immigrant workers. Immigrant women's jobs are concentrated in manufacturing with lesser concentrations in the accommodation, food, and beverage services (Table 2). Immigrant men are overrepresented in construction as well as manufacturing and accommodation, food, and beverage services. Location quotients less than 1.00 indicate that immigrant workers of both sexes are underrepresented in many service industries including distributive services, retail trade, and business, educational, and government services.

The location quotients reveal that immigrant women are more likely than immigrant men to work in growing service industries such as finance, insurance, and real estate services (Economic Council of Canada 1991). Immigrant men's proportions of employment in finance, insurance, and real estate and in other services are less than those of Canadian-born men, while immigrant women's proportions of employment in these industries are approximately equal to those of Canadian-born women. Immigrant women's parity with Canadian-born women's employment in the industry is a hopeful sign that the employment circumstances of some immigrant women have improved.

Despite the growing importance of self-employment in the Canadian economy (Statistics Canada 1998), the vast majority of immigrant workers in Toronto are employees. In Toronto, the proportion of immigrant women who are self-employed is identical to the proportion for Canadian-born women, 8.4 percent, while a slightly higher proportion of immigrant men than Canadian-born men are self-employed, 17.0 percent versus 14.7 percent. There is little evidence that, in aggregate, immigrants are more likely than the Canadian-born to be self-employed.

Hours of work are also very similar for immigrant and Canadian-born workers in Toronto. The majority of people work fulltime, at least 30 hours per week, although women are more likely than men to work fewer hours. Canadian-born and immigrant women both work part-time at approximately twice the rate of men. For example, more than 20.0 percent of immigrant women in Toronto work part-time compared with 10.0 percent of immigrant men. Part-time work is slightly more common among Canadian-born women than among immigrant womenC26.9 percent versus 20.0 percent. Economic necessity may well account for the slightly lower rate of participation of immigrant women in part-time work.

Gender structures the industrial division of labour in Toronto, but its effects interact with those of colour, birthplace, and ethnicity. Ethnic origin, as described by self-reported ethnicity, affects rates of self-employment and industry of employment with little impact on hours of work. Regardless of their birthplaces and ethnic origins, men are more likely to be self-employed than women. While the proportions of self-employment for immigrant men range from 37.1 percent to 9.7 percent and those for Canadian-born men range from 37.7 percent to 5.2 percent, those for immigrant and Canadian-born women range between 20.5 percent and 2.7 percent (Table 3). The variations in the proportions of self-employed workers among ethnic groups are much greater than the differences between Canadian-born and immigrant workers from the same ethnic background. Self-employment is more common among Jewish, Chinese, and other European immigrants than among any other ethnic group.

There are substantial ethnic differences in Immigrants' industries of employment. Location quotients were calculated to identify the industries in which immigrants from each ethnic group are overrepresented and those in which they are underrepresented. The importance of manufacturing jobs crosses all ethnic and gender groups. For immigrant women, 11 of 13 location quotients exceed 1.0 and for immigrant men, 13 of 13 exceed 1.0 (Table 4). Immigrant workers of both sexes are also concentrated in accommodation, food, and beverage services where the location quotients for 9 of 13 ethnic groups exceed 1.0 for men and 10 of the 13 location quotients for women exceed 1.0. Without exception, immigrant men and women are underrepresented in government services where every location quotient is less than 1.0 and almost equally underrepresented in regulated utilities. Immigrants from most ethnic groups are also excluded from education and, ominously, business services.

Gender differences cut across the ethnic division of labour. Immigrant women often work in other services and health and social services, while the vast majority of immigrant men are excluded from other services. Construction is an important source of employment for immigrant men from several ethnic groups: Italian, Polish, Southern European, British, French, and Latin, Central, and South American, while it is relatively unimportant for immigrant women. Even

where the location quotients exceed 1.0, the numbers of immigrant women working in the construction industry are small compared with those employed in manufacturing and other services.

Comparing the location quotients among ethnic groups rather than industries, offers some evidence of the three employment patterns identified in previous research. Jewish and Charter immigrants stand out with location quotients close to 1.0 in business services and finance, insurance, and real estate, while their location quotients in manufacturing are relatively low. There are also large concentrations of Jewish immigrant women in health and social services and education, services where jobs have been stable and well paid. Ukrainian immigrants, a long-established ethnic group, have remarkably similar employment patterns, suggesting that in Toronto they are attaining the same economic success that has been observed earlier for Jewish, British, American, and Northern European immigrants.

The location quotients highlight the persistent concentration of Polish, Italian, and Southern European immigrants in the goods-producing sector (Table 4). The manufacturing location quotients for women from these ethnic groups exceed 2.0. These women are also concentrated in construction, perhaps because of involvement in family businesses, particularly on the part of Italian women. Construction is also an important source of men's employment for these ethnic groups with location quotients that exceed 1.0 by a wide margin. The reliance on goods-producing sectors is balanced by under-representation in business, government, and health services, where the location quotients are low for men and even for women. Italian immigrants have the most extreme concentration in goods-producing industries accompanied by the greatest under-representation in services. One example is business services where the location quotient for Italian immigrant men is 0.25. Although the earnings of these immigrants from Southern and Eastern Europe who immigrated mainly in the 1960s and 1970s have increased, their failure to penetrate the dynamic service industries indicates the lingering effects of limited education. Many immigrants from Southern and Eastern Europe were skilled tradespeople but lacked the formal education that is often required in business, finance, insurance, and real estate services; government; and health, social, and educational services.

Despite the continuing concentration of recent immigrants in manufacturing, their employment patterns differ from those of Southern and Central European immigrants in three respects. First, men from Africa, Asia, and the Caribbean are underrepresented in construction, perhaps because of the importance of ethnic networks in this industry (Waldinger 1996). Only immigrant men from Central and South America have a location quotient for construction greater than 1.0 (Table 4). Secondly, retail and wholesale trade are important sectors of employment for women from Asia and South and Central America. Chinese men are also involved in these sectors, perhaps a continuation of their historic roles as traders. Thirdly, African, Caribbean, and Chinese immigrants of both sexes have location quotients that approach or exceed 1.0 for finance, insurance, and real estate services, a promising indication that some recent immigrants are finding jobs outside the declining manufacturing sector (Table 4).

Period of arrival, which is related to the ethnic origin of immigrants, also exerts an independent influence on their employment patterns. Although concentrated initially in less-desirable jobs in declining sectors, with time, immigrants are expected to achieve parity in wages and in the industrial division of employment (DeVoretz 1985; Ley 1998). The literature suggests that recent immigrants may concentrate in declining economic sectors because they have difficulty satisfying employers' requirements for Canadian experience and Canadian education and training (Boyd 1991; Reitz 1990; Seward and Tremblay 1987). They also have had less time to develop social networks that are crucial sources of information about job vacancies, personal recommendations, and even job offers. Sassen (1990) has argued that the growth of business and financial services in Aglobal@ cities has also increased demand for immigrant workers to fill poorly paid and often insecure jobs in declining industrial sectors.

In Toronto, the exposed economic situations of recent immigrants who arrived between 1991 and 1996 are apparent in their industries of employment, but not in their hours of work nor their propensity for self-employment. Only two effects of years of residence in Canada are discernible. Immigrant women who arrived before 1966 are more likely to work part-time than other female immigrant workers. Immigrant men who arrived before 1966 are also more likely than other male immigrant workers to be self-employed. Apart from these early immigrants, period of arrival does not influence hours of work or self-employment.

Immigrants' industries of employment are also not influenced much by period of arrival. Correlation analysis indicated that period of arrival is not related to the proportions of immigrant men and women in each industry. For immigrant women, correlation coefficients that range from 0.86 to 0.98 reveal high levels of association between the sectoral distributions of female workers from all periods of arrival. The coefficients for male workers are slightly lower, ranging from 0.68 to 0.92, but all are significant (p<0.05). Regardless of length of residence in Canada, employment concentrations persist in manufacturing, while immigrants are underrepresented in several service industries, particularly government and business services.

Analysis of the 1996 census has confirmed that in the Toronto labour market, immigrants are still concentrated in manufacturing, an economic sector that has suffered major job losses over the past three decades. This concentration is accompanied by an almost uniform under-representation in business and government services, sectors where job growth has occurred since 1971. There are some encouraging signs of change. Ukrainian immigrants have employment patterns similar to those of Jewish, British, and American immigrants. On the basis of their industries of employment, Ukrainian workers no longer fit with other Southern and Central European immigrants. Among immigrants from Asia and Africa, the proportions of workers from each ethnic group employed in finance, insurance, and real estate services is almost equal to the proportions for Canadian-born workers. Chinese immigrants of both sexes along with men and women from selected Asian origins are also having success in retail trade. Employment in these service sectors does not imply that immigrant workers are all in well-paid, secure employment; however, their increasing presence in the expanding service industries promises improved economic prospects.

Differentiation of immigrants on the basis of ethnic origin and gender continues. Even at the aggregate level of 13 ethnic groups, three types of groups emerged. The composition of the three types has changed slightly with the inclusion of Ukrainians in the first, most successful type, but otherwise, the three types have persisted since 1971. Within the third type, where the majority of recent immigrants are found, a shared concentration of employment in manufacturing and accommodation, food, and beverage services and a shared exclusion from employment in business and government services are the main common elements. Employment in other service sectors remains very diverse. Asian, Caribbean, and African immigrants seem to have had more success entering expanding service sectors than immigrants from Central and South America. In this respect, the findings confirm Mata's (1996) assertion in 1991 that Central and South American immigrants were at the greatest disadvantage in the Toronto labour market.

Immigrants' industries of employment are also structured by gender effects that cut across ethnic differences in complex ways. Immigrant women are the most vulnerable group of workers. More reliant than immigrant men and Canadian-born workers of both sexes on manufacturing jobs, immigrant women are most likely to suffer layoffs and unemployment as jobs disappear in this sector. Furthermore, immigrant women are underrepresented in educational and government services that offer more remunerative and stable employment to Canadian-born women. At the same time, many immigrant women work in accommodation, food, and beverages services that are notorious for precarious and poorly paid jobs. Nevertheless, not all immigrant women are equally vulnerable. In aggregate, immigrant women emerged as the most precariously employed group, however, their employment patterns are diverse. Jewish, British, Ukrainian, and American immigrant women are employed in reasonable numbers in expanding service sectors. Although the success of women from these ethnic groups does not outweigh the disadvantages suffered by the majority of immigrant women, the success of some immigrant women bodes well for the future of others. The industrial division of labour changes slowly, but the recent success of some immigrant women who are employed successfully in growing economic sectors indicates that gender and ethnic disadvantage can be overturned.

One avenue for economic success is entrepreneurship, however, the literature on immigrant entrepreneurship and ethnic economies is bewildering because of its convoluted terminology. The three terms entrepreneurship, business, and economy with their two prefixes immigrant and ethnic are often used interchangeably although there are subtle differences among them. Entrepreneurship refers to the initiative and ability to create a business entity of any size, solely or jointly with others. An entrepreneur is a self-employed individual although self-employment is not analogous to entrepreneurship. Such businesses are termed immigrant businesses if they are owned and managed by immigrants. They are known as ethnic businesses if reference is specifically made to the cultural and national background of their owners. An ethnic business is not necessarily an immigrant business. An immigrant economy refers generally to the subeconomy of businesses created and maintained by immigrant members of a society. An ethnic economy refers to a subset of enterprises due to efforts of a specific ethnic group. Since most of our immigrants are of ethnic backgrounds other than English and French, this section refers only to two terms: immigrant entrepreneurs and ethnic economies.

The entrepreneurial activities conducted by immigrants to Toronto are diverse. The rate of self-employment varies tremendously among immigrant groups, ranging from 22.3 percent for Koreans to 1.6 percent for Somalis (Statistics Canada 1996c). The most entrepreneurial immigrant groups are generally from Europe, especially Poland and Israel, the origins of many German and Jewish immigrants. The least entrepreneurial are mostly visible minority immigrants from the Caribbean, Southeast Asia and Africa. Male immigrants are also more entrepreneurial than female immigrants. An ethnic division of labour accompanies immigrant entrepreneurship (Razin and Langlois 1995). Germans from USSR, Jews from Poland, and Italians have a high stake in the manufacturing and construction industries. Korean, Chinese, Greek, Israeli, and Middle Eastern immigrants concentrate in the distributive services: trade, food services, and transportation. Those from the U.S., Hungary, Czechoslovakia, and South Africa focus on business, personal, and public services.

Ethnic economies are similarly varied, ranging from a few restaurants and grocery stores mainly serving a specific ethnic group to one with a full range of economic activities serving a mixed clientele. While the new Somali, Ethiopian/Eritrean, and Maltese economies are representative of the former, the large Chinese and East Indian economies tend to the latter (Lo and Wang 1998; Marger 1989). These ethnic economies are sometimes visible in a single concentration such as the Malta Village at St. Clair Avenue and Dundas Street and the Portugal Village bounded by Dundas Street West, College Street, and Spadina and Ossington Avenues. Others extend across several separate locations. For example, South Asian commercial activities are found along Gerrard Street in East York, the Tuxedo Court Complex at Markham Road and Highway 401 in Scarborough, and the Ruby Queen Plaza at Airport and Derry Roads in Malton, and Italian businesses abound on St. Clair Avenue West and in the Town of Woodbridge. Alternatively, ethnic businesses may be dispersed throughout the metropolitan area. For example, Korean-owned convenience stores are all over the city despite the location of Koreatown on Bloor Street West.

This section reviews the emergence of immigrant entrepreneurship in Toronto, explores the varying representations of its ethnic economies, and examines the impact of immigrant entrepreneurial endeavours. We use a Chinese case study to illustrate the interdependence between immigrant entrepreneurship and ethnic economies, and the impact of immigration policies on ethnic businesses and the economies they comprise. The following terms are defined for the discussion that follows. While we refer to Aethnic@ as a specific cultural group, Aco-ethnic@ means belonging to the same ethnic group, and Anon-ethnic@ means not belonging to that particular group. We also define Aminority@ as the opposite of majority and visible minority as the racially distinct.

There are three competing explanations for different rates of entrepreneurial activities among immigrant groups. The blocked mobility thesis sees self-employment as a survival mechanism or a withdrawal response under discriminatory conditions (Light 1972, 1979; Portes and Bach 1985). The Amiddleman minority@ and Asojourning communities@ theories focus on entrepreneurship as an effective vehicle for improving social and economic status (Bonacich 1973; Bonacich and Modell 1980). The third explanation says unique characteristics of immigrant groups, such as merchant ideology and ethnic solidarity, predispose some groups towards business development (Light 1972).

A comprehensive argument that elucidates differences in Immigrants' entrepreneurial behaviour has been proposed by Waldinger et al. (1990). They argue that ethnic and class resources such as kinship networks, rotating credit associations, unpaid family workers, a large co-ethnic labour pool, advanced education, and access to capital (Light 1984; Lee 1992; Bates 1994) opportunity structures that include policies concerning the establishment, ownership, and operation of businesses (Rath 1999) and strategies with regards to resource mobilization and marketing interact to influence entrepreneurial behaviour. Variations in these elements explain the economic niches filled by different immigrant groups within the same area and the different economic niches filled by any one group in different areas. This interactive model appears to explain the entrepreneurial activities of Toronto's immigrants.

In Toronto, there is limited support for the blocked mobility hypothesis (Marger 1989; Rhyne 1982; Uneke 1994). While Bogue and Shakeel (1979) and Henry (1993) found perceived discrimination in employment high among Blacks and South Asians, only a few of the Blacks and South Asians in Uneke (1994) and Marger (1989) mentioned discrimination or lack of employment as a reason for self-employment. Pull and push factors encouraged visible minority entrepreneurs to go into business (Rhyne 1982; Uneke 1994). While pull factors, such as being one's own boss and being financially successful, are cited more often as reasons for going into business than push factors, such as poor pay, lack of advancement opportunities, and unrecognized qualifications, individual groups do feel push factors differently. For example, Japanese and South Asians are critical of insufficient chance for advancement, Chinese deplore the poor pay they receive as employees, and Blacks consider both factors important.

In contemporary entrepreneurial pursuits, the class component of education, wealth, and knowledge is found to be more important than the presence of ethnic networks and ethnic solidarity. It accounts for the various business participation rates of immigrant groups. In their study of Toronto's Chinese, East Indian, and Black communities, Chan and Cheung (1985), Marger (1989), and Uneke (1994) showed the insignificance of traditional collective financing such as rotating credit associations in contemporary visible minority business development. Instead, class assets mattered more. Recent Chinese and South Asian immigrants are wealthier and more educated. Education not only affects business operation, but also access to capital. Banks are more willing to give credit to those who can readily offer collateral or who have a reputation for business success. Black entrepreneurs have difficulty getting bank financing partly because of a lack of requisite collateral and partly because of the perceived higher failure rate. The effects of limited access to financing are heightened by their lack of business experience. As Uneke (1994) observed, more Chinese than Blacks have business experience through participation in family business. That more Chinese than other minorities were admitted into the country under the business immigrant programs highlights the correlation between class resources and entrepreneurship in the minds of policy makers (Marger and Hoffman 1992).

While class resources help with business startups, ability to sustain the business, in various degrees, depends on ethnic resources. Portuguese real estate brokers rely on kinship networks and community ties in opening and operating their business (Teixeira 1998). Chinese entrepreneurs view the use of co-ethnic workers and the huge size of the Chinese ethnic market as very important to business success (Chan and Cheung 1985; Ma 1999). The East Indian community, although opting for a more individualistic approach to business development, sees family members and co-ethnic workers as a major resource (Marger 1989). Similarly, Jewish and Italian businesses employ many co-ethnic workers (Reitz 1990). On the contrary, Blacks do not have a unified market. While the Chinese, Portuguese, and East Indian communities are culturally, and in some cases linguistically, homogeneous and have fairly institutionally complete ethnic economies, the Black community, separated by different cultural origins and historical experiences, has a fragmented social structure and no coherent community (Head 1975; Uneke 1994). Black entrepreneurship is hence constrained by both class and ethnic resources.

Class and ethnic resources can play complementary roles. Smaller businesses, including those financed by personal resources, often rely on ethnic resources. Larger businesses, however, can do without them. For example, a bipolar business class is present among the Chinese immigrants, the earlier and poorer arrivals relying mostly on ethnic resources and recent more affluent arrivals on class resources (Chan and Cheung 1985; Thompson 1989).

While necessary for business success, neither ethnic nor class resources are a sufficient condition for ethnic entrepreneurial activity. Also important is the kind and scope of business opportunities provided by the social, political, and economic environment into which immigrants settle. These include market conditions, and institutional policies on access to business ownership. Market conditions can stimulate demand for certain goods and services. The ethnic market provides the first window of opportunity, with the size of the ethnic population a good indicator. The rapid growth of the culturally distinct Chinese and South Asian communities in the last two decades explains the proliferation of ethnic shopping malls. There are currently over sixty Chinese and at least two South Asian shopping malls/plazas within the Toronto CMA, all catering specifically to co-ethnic clients. While ethnic, shopping mall development is a fairly recent phenomenon, its impact cannot be ignored. Then, there is the open market. Immigrants can establish a foothold in this market by carving out a niche in serving markets abandoned by large retail chains or shunned by the dominant population. Chinese-owned laundries and grocers of the past, current Korean-owned convenience stores and dry-cleaning businesses, and South Asian participation in taxi-cab and gas station operations are some examples. Alternatively, they can establish a niche if they possess the right knowledge and skills. In Toronto, we have seen how opportunities in the construction industry became available to Italians during the Depression, and how Chinese immigrants from Hong Kong have gradually taken over the garment industry from the Jewish. More recently, Saxenian (1999) reported on the proliferation of Chinese and East Indian entrepreneurship in the computer technology sector in Silicon Valley. The same trend is emerging in Toronto. For example, a recent count of computer wholesale and manufacturing firms in Toronto shows a 33 percent Chinese ownership (Fairchild TV 1998).

Black entrepreneurs have not been exposed to favourable market conditions. Intragroup diversity limits the cultural market. Their focus on hairstyling and cosmetics for Black customers provides few opportunities for growth due to the abundance of similar firms in the open market. They are not helped by other factors in the opportunity structure equation. While the federal government and Ontario provincial government operate small business loan programs in which the government acts as a guarantor to bank loans on new ventures, prospective proprietors must provide an equity contribution to qualify. The equity requirement restricts Blacks more than it restricts other immigrant groups who lack personal and collective resources.

Toronto case studies confirm that institutional discrimination is no longer a satisfactory explanation for the continued interest of some immigrant groups in self-employment (Light 1980). However, the perception of limited mobility as employees, held by certain immigrant groups, may drive up self-employment rates, while perceived disadvantages in access to business loans may discourage others from going into business, hence shaping differences in the self-employment rate. The complexity underlying immigrant entrepreneurship confirms Waldinger's (1990) interactive theory of group resources and opportunity structure. Toronto's immigrant business owners have an Aentrepreneurial mentality.@ Their dependence on class rather than ethnic resources makes some groups more entrepreneurial than others. If immigrant self-employment is seen as a positive trait, it is perhaps encouraging to note that the rate increases with length of residence, the mix between co-ethnic clients and non-ethnic clients increases with Canadian business experience, and class resources allow diversification into nondistributive sectors and entry into the wider market (Lo and Wang 1998; Ma 1997, 1999; Marger 1989).

Ethnic economy can be broadly defined as an ethnic-based economic structure consisting of a set of enterprises all owned and managed by members of the same ethnic group. It designates a business and employment sector that coexists with the metropolitan economy. Enclave economy, ethnic economy, and mixed economy denote variations in the mix of ethnicity of their workers and clients, in the kind of goods and services they offer, in the market space they command, and in the degree of formality in such organizational behaviour as capital financing and hiring practices (Jones and McEvoy 1996; Light et al. 1994; Nee et al. 1994; Rhyne 1982).

An enclave economy is one in which all business owners, employees, and clients are of the same ethnicity. Its evolution and sustenance is largely due to ethnic resources and cultural practices. Firms are very small and generally cluster where the ethnic group resides to better serve better the ethnic market with low-order ethnic goods and/or mid-order non-ethnic services. Informal economic practices are commonly alleged to be an integral part of an enclave economy. An ethnic economy of self-employed and co-ethnic employees differs from an enclave economy in two aspects. Firms neither target co-ethnic clients nor cluster spatially. They locate within and outside ethnic areas and serve as intermediaries selling cultural products to tourists or non-cultural goods and services to other underserved minority populations. A mixed economy consists of hybrid firms that utilize both ethnic and non-ethnic resources and embody both formal and informal organizational behaviour. Their markets are spatially and ethnically unbounded. Their businesses, not confined to general retailing, may include manufacturing, specialist retailing, and service provision for consumers as well as producers. The above describe ideal types. In reality, an enclave economy is a special case of an ethnic economy, and a mixed economy cannot exist without some traces of an ethnic economy. While no standard measures exist, knowledge of the size, composition and market orientation of immigrant firms are often used to infer the type of subeconomy to which an ethnic economy belongs.

There are few studies of ethnic economies in Toronto. Any information is usually subsumed in discussions of the history and development of specific ethnic groups (e.g., Zucchi 1988; Thompson 1989) or amid discussions of immigrant entrepreneurship. Information about the size and composition of immigrant economies is often drawn upon surveys and/or ethnic business directories. For example, Rhyne (1982) counted 1333 Chinese, 501 Black, 247 South Asian, and 139 Japanese businesses in 1979/80. The type of subeconomy they belong to is related to their composition. The Chinese, Black, and South Asian sub-economies consist mostly of service and food-related retail activities whereas over half of the Japanese businesses are engaged in commercial and professional activities. With respect to the service sector alone, Chinese focused on personal, printing, and contractor services, Blacks on personal, entertainment, and real estate, South Asians on insurance and travel services, and Japanese on automotive dealership, instructional and personal services. The more diverse Japanese businesses show a more mixed economy than the others. This is probably attributable to two historical events. First, unlike Chinese and East Indians, early Japanese-Canadians had well-organized religious and social institutions to assist their struggle against racism and political persecution, which led to less restricted and more spatially scattered activities. Second, the emergence of Japan as a wealthy industrialized nation after World War Two together with its huge foreign investment has improved the economic positions of Japanese-Canadians.

Ethnic businesses were relatively small (Rhyne 1982; Reitz 1990). In Rhyne (1982), 73 percent of the Black and 92 percent of the Chinese businesses employed less than 20 workers, and, with the exception of the South Asians, only 16 percent to 28 percent of the businesses experienced a total sales volume of $1 million. The South Asian subeconomy is less of an enclave and more mixed. Marger (1989) found that the businesses of East Indians who make up the largest percentage of South Asians in Canada serve both ethnic and non-ethnic populations. The Indian Bazaar on Gerrard Street is patronized by South Asians from the entire metropolitan area. The non-ethnic sector, which is found in dispersed locations, mainly in ethnically mixed areas such as Yonge Street between Bloor Avenue and Dundas Street, sells clothing, small audio/video equipment, houseware, furniture, toys, and accessories. In addition, Jones and McEvoy (1996) found that in 1989, the local ethnic, non-local ethnic, local non-ethnic, and non-local non-ethnic market shares of South Asian businesses in Toronto, Vancouver, and Montreal were 8.7 percent, 29.5 percent, 33.0 percent, and 28.7 percent respectively. The relative smallness of the ethnic spaces indicates a non-enclave economy, and one more of Amiddlemen minority@ status.

The literature to date would say that only the Jewish and the Chinese have ever had a well-developed enclave economy in Toronto (Hiebert 1993; Thompson 1989; Marger and Hoffman 1992). Their residential concentrations coincide with their business concentrations. Spatial clustering is presumably vital to the success of an enclave immigrant economy. It acts as an incubator and provides a protected market as well as an exclusive labour force. It facilitates linkages between co-ethnic suppliers and gives rise to an agglomeration economy. It can even create a kind of ethnic central place, a cultural and economic focus (Kaplan 1997; Logan et al. 1994; Waldinger et al.1990; Zhou 1998).

However, immigrant economies are not static. They shift in response to both contextual and structural factors, and the kind of economy associated with an immigrant group at any point in time reflects the mix in the segregating/blending process (Nee et al. 1994). In general, the rise of a specific immigrant economy hinges upon sufficient capital and initial entrepreneurial skills. It requires sustained immigration to fuel consumer demand and labour supply. Its growth can be propelled or impeded by government or institutional policies such as the earlier racial exclusion act, the point system of assessing potential immigrants, the business immigrant program, and various small business loan and special business procurement programs. The case study below illustrates the arbitrariness of the three ideal types of ethnic economies, and the dynamic relations among immigration policies, global restructuring, and ethnic economies.

The Chinese ethnic economy has undergone much change. The first Chinese immigrants in Toronto, like their counterparts elsewhere, faced residential, educational, and occupational segregation. Similar to what Anderson (1991) described of Vancouver, institutional discrimination produced the enclave known as Chinatown prompting their involvement in laundry and restaurant businesses. The enclave economy took shape at the same time as many Chinese entrepreneurs served as middlemen. In 1923, the year when the Exclusion Act effectively stopped the entry of Chinese into Canada, with a population of 2500, they operated 203 restaurants, 47 laundries, and 9 grocers (Rhyne 1982). The relatively large number of restaurants and laundries indicated a somewhat Abroader than enclave@ economy among the earlier generation of Chinese immigrants. The Asuccess@ or sustenance of this subeconomy was due to the extensive use of rotating credit associations, networks based on village kinship, and a diligent work ethic.

The 20 years following the repeal of the Exclusion Act in 1947 was a period of transition. The subeconomy expanded to a size of 448 firms in 1966, the year before the 1967 Immigration Act was introduced. The enclave part of the Chinese subeconomy expanded to include export/import firms, gift shops, real estate, insurance and travel agents, and a few professionals. The proportion of restaurants declined while that of grocers increased (Table 5). The 1967 Immigration Act caused considerable change in the size and structure of the Chinese ethnic economy. Chinese business diversified and a true enclave economy emerged. This enclave economy, occurring in multiple locations, was fuelled by demand rather than discrimination. The proliferation of Chinese businesses is due to personal rather than group resources. The emergence of an immigrant middle class has created the consumer demand and capital supply for the expansion of Chinese businesses (Chan and Cheung 1985; Li 1992).

Source: Adapted from Rhyne (1982), Thompson (1989), and Wang (1996).

The business immigrant program that was promoted in the 1980s caused more significant changes. The three Chinese business telephone directories together reported over 6000 non-overlapping Chinese businesses in 1997 (Lo 1998). While many are of a retail and service nature serving the Chinese alone, a fair proportion seek and succeed in going beyond the enclave market and middleman status. The Chinese subeconomy has moved away from a traditional ethnic economy focusing on consumer goods and services to one that covers nearly the whole array of industrial activities including producer and advanced services.

In a recent study, Lo and Wang (1998) analyzed the Dun and Bradstreet Business Directory and made the following observations about recent Chinese business development in Toronto. First, Chinese businesses are no longer confined to the retail sector. Of the 65 industrial categories outside of the primary and public administration sectors, Chinese businesses are represented in 52. Chinese businesses are not found in regulated business such as non-depository credit institutions, and rail and air transportation. Second, the locations of Chinese businesses are shifting. On the one hand, indicative of their enclave nature, many retail, service, and finance, insurance, and real estate businesses are located in Chinese settlement concentrations. On the other hand, manufacturing and wholesale firms, not necessarily seeking co-ethnic clients, are dispersed across Toronto. Their location strategy is linked to industrial sectors and networks rather than the word Aethnic@ (Zhou 1998). Third, Chinese firms are expanding. Multiplant establishments have surfaced. While 57 percent of Chinese businesses still employ less than 20 employees, 41 percent have a workforce between 20 and 199 people, and the remaining 2 percent, covering a range of business types in wholesale, manufacturing, realty, and accommodation, employ 200 to 750 workers. In terms of sales volume, while 26 percent made less than $1 million in 1997, slightly over 10 percent of the Chinese firms exceed the $10 million mark. The study also noted that Chinese firms, while representing 0.1 percent of the total in Toronto, account for 1 percent of the top 1000 Toronto firms in both employment and sales. In particular, one manufacturing firm, ATI Technology Inc., ranking among the top 200 in employment and sales in the whole Toronto sample of almost 650,000 businesses (Dun & Bradstreet Canada 1997, p. S6, E5), and being the third largest hightech firm in Canada as well as the world's biggest maker of computer graphic chips, is owned and operated by a former Hong Kong resident who immigrated to Toronto in 1985 (Acharya 1998). This is the largest Chinese-owned computer firm among many that were established by highly skilled, middle-class immigrants from Hong Kong, China, Taiwan, and elsewhere. Similar to Los Angeles (Saxenian 1999), Toronto is seeing the emergence of a knowledge-based ethnic economy.

The Chinese ethnic economy is maturing. Its diversification in size and composition is pointing towards both structural and functional integration of Chinese businesses in Toronto. There is a two-tier ethnic economy or, as Lin (1995) and Tseng (1994) said of New York and Los Angeles, two circuits of development. Given the macro changes in the world system and the diversity of Chinese immigrants (Lo and Wang 1997), there exist a lower circuit of immigrant labour and petty capitalist incorporation mostly from China and Vietnam, and an upper circuit of flight capital and high-skill immigrants generally from Hong Kong and Taiwan investing in finance, real estate, advanced services, and high technology. The upper circuit is apparent in the suburban proliferation of Chinese shopping malls and industrial plants. The retail/commercial development at the northeast corner of Kennedy and Steeles in Markham, which claims to be the largest Chinese shopping area in North America, has become a Chinese central place. Industrial plants are found in Scarborough, Brampton, and Woodbridge. These malls and complexes, many developed or owned by non-Chinese locals, are products of contemporary immigrant societies. On the one hand, their AChineseness@ adds to or detracts from the suburban landscape, depending upon one's perspective (Preston and Lo 1999; Qadeer 1998; Wang 1999). On the other hand, they reflect the size of the Chinese ethnic economy. Optimistically, a sizable mixed economy, with its forward, backward, and lateral linkages, entails continuous exchange of resources, commodities, and information among entrepreneurs, workers, and customers belonging to different ethnic groups; gives rise to a more porous social boundary; and paves the way for social and economic integration. At this point, it is too early to conclude if the Chinese ethnic economy represents a success in terms of its size, composition, and market spaces.

The greatest concern about ethnic economies revolves around social and economic mobility and appropriate returns to human capital. Debates are largely inconclusive. While there is evidence that self-employed immigrants can maintain a higher social status and earn more than their comparable co-ethnics working in the general economy (Portes and Jensen 1987; Wilson and Martin 1982), many self-employed work long hours with help from unpaid family members. Nonetheless, entrepreneurship is regarded by many as a bridge to economic mobility with expansion to a larger enterprise and a wider market in mind. Immigrant entrepreneurs are often regarded as successful because they have an edge over similar peripheral firms in the open economy and they can use language and cultural barriers and ethnic affinities to gain market and labour access. However, they also project an image of exploitation. As middlemen, they carry out the economic directives of large firms in the general economy, and as employers, they often provide immigrant workers with jobs, but jobs that often offer low pay and poor working conditions. The empirical record is often inconsistent (Portes and Bach 1985; Sanders and Nee 1987). In Toronto, the incomes in enclave employment differ among minority groups. They are lower than average for the Chinese, Portuguese, and West Indians, and higher for the Italians (Fong and Ma 1998; Liu 1995; Reitz 1990). A related concern about participation in the enclave market is the possibility that it may prevent immigrant workers from ever reaching the general labour market. However, job event history shows that immigrant workers can move across ethnic boundaries and market sectors and away from the informal ethnic domain to the formal market which offers better working conditions and higher income (Nee et al 1994; Liu 1995).

A more positive view sees enclave employment as a way to help new immigrants establish themselves. Even though the enclave labour market pays lower wages, workers earn more than they would if they were unemployed (Nee et al. 1994). A second argument stems from labour market segmentation theory, which says that immigrants, as one marginalized group, are often employed in dead-end, low-skill jobs in the secondary market. Even when employed, immigrant workers may end up with little career mobility. An enclave economy at least offers immigrant workers a protected niche with some opportunities for upward mobility, including self-employment (Portes and Bach 1985).

The enclave economy functions positively by providing easily accessible jobs for immigrants, especially those who are newly-arrived and poorly educated. However, it often has a negative impact on earnings at least in the initial phases of settlement. In addition, while the ethnic economy provides an alternative avenue for economic integration albeit at a lower level, participation in the enclave does not necessarily provide job or life satisfaction. It may also hamper social participation in the wider society, thereby inducing social isolation (Fong and Ooka 1999; Wilson 1996).

More generally, ethnic economies have positive benefits that are difficult to measure but nonetheless significant. As an ethnic economy expands, ethnic business organizations emerge. In addition to promoting entrepreneurship among their members and forging internal cohesion, the organizations often open trade links and promote business interaction between the communities where immigrants settle and those in their countries of origin. Ethnic businesses also act as important agents for urban renewal. For example, when the Portuguese community moved from Alexandra Park to the Kensington Market area, Portuguese business soon revitalized the area (Teixeira 1998). Ethnic economies may also have territorial impacts. The northward migration of the Italians from the College-Spadina area to St. Clair West changed the area's retail facades, rewriting its territorial history from Little Britain to Little Italy (Buzzelli 1998). Besides giving the neighbourhood a place identity, an ethnic economy also helps to develop local ethnic identities (Zucchi 1988). The urban landscape that emerges may be a source of ethnic pride for some but it is also a source of ethnic tension as diverse immigrant groups make competing claims and learn to live with their other ethnic groups.

Despite their proliferation, small businesses project contradictory images. While they are hailed as the engine of growth in large urban centres, they are also considered the economic lifeboats for many immigrants. The literature has attended mainly to the social and economic structures within which immigrant businesses are embedded while neglecting larger political and institutional frameworks. Few empirical studies examine in detail the nature, structure, and dynamism of ethnic economies. Studies of immigrant entrepreneurship, often relying on small-scale and non-random surveys, are mostly exploratory. Investigations of ethnic economies are plagued by data representation problems. The lack of a common database renders proper sampling of ethnic businesses impossible. Ethnic yellow pages lean towards retail trade and are easily outdated due to high rates of business failure and turnover. General business directories such as the Dun & Bradstreet and the Scott Industrial Directories, while more comprehensive in industrial representation, are biased towards larger businesses and misrepresent ethnic economies that have a larger share of small businesses than the general economy. A further complication is the presence of an informal economy that makes data less reliable. Inconsistent study outcomes are the norm, leaving many research questions unanswered.

Formal studies and anecdotal discussions of immigrant entrepreneurship and ethnic economies focus on the economic incorporation of immigrants and the social barriers they face. Immigrants are successful if they adopt formal organizational behaviour, hire a moderate and not necessarily co-ethnic workforce, retain diverse establishments, serve a mixed clientele, offer their workers wages comparable to the general economy's, and generate sizable income. This assimilation perspective is often glorified. While it is encouraging to see that some ethnic groups have expanded their development path and are serving multiple markets, this perspective also has a negative side. It encourages competition among immigrant groups. In discussing entrepreneurial behaviour, the emphasis has been on social barriers with little attention paid to governmental and other institutional barriers. The main concerns include minority groups' access to capital and major financial institutions' attitude towards minority businesses.

Finally, we note two related phenomena. First, within a metropolitan economy, various immigrant groups occupy specific entrepreneurial niches, creating various ethnic economies. Second, within some immigrant groups, there are signs of new ethnic economies in which labour market segmentation is similar to that in the general labour market. The changing extent and nature of ethnic economies have important implications for the future economic performance of immigrants and for the performance of the entire metropolitan economy.

Participation in ethnic economies may be one of the keys to the economic success that is proving elusive for recent immigrants. Using the 1991 census data, this study profiles the economic status of ethnocultural groups in Toronto through an examination of unemployment rates, average employment income, and incidence of low income. These three indicators provide an indication of (un)employment among different ethnocultural groups; income levels and the likelihood of different ethnocultural groups experiencing poverty in Toronto.

In order to see the big picture@ in Toronto, 58 ethnocultural groups have been categorized into two key groups: visible minority groups and European groups. AVisible minority@ groups consist of Black/African Black, Latin American (visible minority only), South Asian, Southeast Asian, West Asian/Arab, Chinese, Korean, Japanese, and Filipino. AEuropean groups@ include British, French, British and French, Western European, Northern European, Eastern European, Southern European, and Latin American (not-visible minority only).

To understand how different periods of immigration affect the economic status of immigrants, we divided the data into five periods of immigration: those who immigrated before 1961, 1961-70, 1971-80, 1981-87 and 1988-91. The last two periods are shorter than the other three periods for two primary reasons. First, the literature has indicated that the initial few years of residence in Canada are the most difficult for immigrants. Second, these periods correspond to a large numbers of immigrants settling in the Toronto area. In order to gain an indepth understanding of the immigrant socioeconomic experience the most recent immigration period (1981-1991) was subdivided into two, five-year cohorts. In addition, this study also examines gender as a factor in determining the socioeconomic status of immigrant ethnocultural groups.

Generally women from non-English-speaking countries are socioeconomically disadvantaged (Basavarajappa and Verma, 1990; Boyd, 1984, 1990). In their reviews of immigrant women's employment in Canada, Estable (1986) and Seward and McDade (1988) confirm that racial stratification exists to the disadvantage of visible minorities and that visible minority women are employed in occupations not commensurate with their experience and skill level.

Nakhaie (1995, 1997, 1998), in three separate studies of ethnocultural groups in Canada, found that persons of British origins continued to be overrepresented in higher socioeconomic status positions. Hou and Balakrishnan (1996), using 1991 Census of Canada data, found that being an immigrant has a negative impact on the income level of all visible minority ethnocultural groups, with the most pronounced effects among recent immigrants.

Socioeconomic characteristics (e.g. male unemployment, government transfers, female-headed families, and lack of a high school education) combine to effect a higher coefficient of poverty status than do ethnocultural variables (Ley and Smith, 1997). Recency of immigration again appears to be the defining characteristic for poverty.

It appears that structural factors such as: social stratification, labour market segmentation, discrimination against visible minorities and economic cycles determine the macro level general distribution of immigrants groups in Canada and account for some intergroup differences. However, it is the micro level factors, such as demographic characteristics (e.g., age, gender, educational attainment, language skills, and family status) that account for intragroup differences.

The analysis of Toronto-based data will determine if the findings from the literature can be generalized to Toronto; examine the economic status of different ethnocultural groups in Toronto; determine the impact of gender on these patterns; and, finally, determine whether immigrants fare better in Toronto than in other part of the country.

Throughout the analysis, the reference point for comparison is the Toronto average for each of the socioeconomic dimensions. Statistical findings and patterns from the quantitative data analysis are followed by a discussion on the policy implications of these findings.

There is a linear progression of unemployment rates among immigrants: the most recent immigrant cohort (both sexes) of 1988-91 has the highest unemployment rate (17.7 percent), followed by its previous cohorts: 1981-87 (12.2 percent), 1971-80 (9.0 percent), 1961-70 (6.8 percent), and before 1961 (6.3 percent). This linear progression is also found among male immigrants (from 5.9 percent to 17.2 percent) and among female immigrants (from 6.9 percent to 18.4 percent). Those who immigrated before 1971 fared better than non-immigrants did (7.1 percent) and the average Toronto population (8.5 percent). This indicates that more recent immigrants have the highest unemployment rates.

In addition, some ethnocultural immigrants have persistently high unemployment rates compared with the Toronto average. The ethnocultural groups with persistently higher average unemployment rates are: Latin American (visible minority), Black, South Asian, Southeast Asian, Eastern European, and Southern European. In contrast, Korean, British, and Western European immigrants have persistently lower than average unemployment rates. When these data are broken down by gender, West Asian and Latin American (non-visible minority) women are added to the list of ethnocultural groups with persistently higher unemployment rates. In contrast, Southeast Asian men are less persistent in their higher unemployment rates (as compared with the data of both sexes).

The data analysis of visible and European groups, indicate more recent European immigrants fare better than recent visible minority immigrants. For the most recent cohort (1988-91) all other European immigrants fared better than the Toronto average for all immigrants, with the exception of Eastern European immigrants. However, five of the nine visible minority groups fared worse. When data are broken down by gender for the most recent cohort of immigrants, both European and visible minority men fared worse than their female counterparts.

In addition, visible minority immigrants experienced higher unemployment rates than their European counterparts. Visible minorities' lowest unemployment rates are always higher than the lowest for European immigrants with the exception of the Abefore 1961@ cohort. In a comparison of high female unemployment rates, the rates of visible minority members with the highest unemployment rates tend to be higher than their European counterparts. However, the reverse is true for men: the rates for European men with the highest unemployment rates tend to be higher than those rates of visible minority men. As for the lowest rates, women of visible minority backgrounds from the most recent cohort (1988-91) have higher rates than their male counterparts.

An examination of the ranges in unemployment rates reveals that visible minority group immigrants tend to have larger ranges in unemployment rates compared with European group counterparts. In three of the five periods of immigration, the range between the highest and lowest unemployment rates among visible minority groups is larger than the range found among European immigrants. For example, in the 1981-87 cohort, a range of 16.6 percentage points is found among visible minority groups. For the same immigrant cohort, the range is 14 percentage points among European groups. However, in 1971-80 and 1988-91 the ranges for European groups are larger than those of visible minority groups. When data are broken down by gender, it is noted that the ranges for European women and men are generally larger than the ranges found for visible minority and men.

These patterns suggest that period of immigration, in addition to visible minority or European ethnocultural group status, is a key factor in understanding unemployment patterns among immigrants.

Recency of immigration was found to be a noteworthy variable in understanding income patterns of immigrants. More recent immigrants have lower average employment incomes. While immigrants who came to Toronto before 1961 earned $35,990 on average, those who arrived from 1961 to 1970 earned $33,285; 1971 to 1980, $27,272; 1981 to 1987, $23,002, and 1988 to 1991, $18,077. This linear progression applies to male immigrants (from Abefore 1961@ onwards) and, to a great extent, female immigrants (only from 1961 onwards).

The data indicate earlier immigrants earn more than both non-immigrants and the Toronto average. The employment incomes of immigrants who came before 1981 are higher than employment incomes of both non-immigrants ($23,879) and the general population ($24,329). When data are broken down by gender, the average income of female immigrants ($21,433) does not differ substantially from the average income of non-immigrant women ($22,901) in the Toronto area. However, when this immigrant average income is broken down by period of immigration, only women who immigrated during two of the five immigration periods, Abefore 1961@ and A1961-70,@ earned more than the average income for Toronto women. A similar pattern is noted for men. The average income of immigrant males ($34,398) does not differ substantially from the non-immigrant average income for men ($36,775) in the Toronto area. However, when the data are broken down by period of immigration, only men who immigrated during the same two periods of immigration earned more than the average income for Toronto men. This finding highlights recency of arrival or length of residence as an important variable in the analysis of economic status and supports the observation that gender has a complex effect on income. The findings suggest the need for additional research into the nature of the relationship among gender, period of immigration, and ethnocultural groups.

The data also indicate persistent patterns of low income among different ethnocultural groups. Most visible minority groups have persistently low employment incomes. Black, Latin American (visible minority), South East Asian, and Korean are four subgroups that have persistently lower employment incomes than the average immigrants in Toronto for all five cohorts. The only European subgroup with persistently low employment income levels is the Latin American (not-visible minority) group. In fact, there are more visible minority groups than European groups represented in each of the five immigration cohorts. When data are broken down by gender, women of Southern European backgrounds have persistently lower employment incomes than the total Southern European group (two sexes combined) across all five periods. However, Filipino men earn less than Filipino women across all five periods of immigration. Alternatively, most recent European immigrants Afared better@ than recent visible minority immigrants. Seven of the nine visible minority subgroups in the 1988-91 cohort have lower employment incomes than the average. Only two of the eight European sub-groups have lower employment incomes in the same cohort. Similar patterns apply to both recent immigrant men and women. This suggests that there are systemic patterns of income discrimination for visible minorities or patterns of systemic underemployment.

While visible minority immigrants who immigrated between 1961 and 1987 have lower employment incomes than their European counterparts, the range of employment incomes is also noteworthy. During this period, the visible minority sub-group with the highest employment income had a lower income than that of the European sub-group with the highest employment income. Similarly, the visible minority subgroup with lowest employment income had a lower income than that of the European subgroup with the lowest employment income. In the Abefore 1961@ and A1988-91@ period of immigration, the patterns are reversed. An examination of average incomes at both ends of the continuum (highest and lowest) reveals the following. When data are broken down by gender, European women with the highest incomes, had incomes lower than their visible minority counterparts. Similarly, European women with the lowest incomes, had incomes lower than their visible minority counterparts. There are minor exceptions. The incomes of male visible minority groups with the highest incomes tend to be lower than their European counterparts for three of the five periods; and their lowest incomes are also lower than those of their European groups for four of the five periods.

Visible minority groups have wider income ranges than European groups in three of the five immigration cohorts. But the pattern of progression is not clear for both visible minority and European groups. The income range for visible minority groups is largest ($25,816) in 1988-91, and for European groups the largest income range ($37,366) occurs in the Abefore 1961@ cohort. For women, visible minority groups have wider ranges among themselves in incomes than European groups only in the 1961-70 period. In other periods, European groups have wider ranges than visible minority groups in four of the five periods. As for men, the same pattern emerged where European men did worse than visible minority in four of the five periods. Larger income ranges are found for more recent visible minority immigrants compared with European immigrants in similar immigration cohorts. When the data are broken down by gender, its appears that gender is more important than their ethnocultural group for recent female immigrants. The pattern is reversed for men: the most recent immigrant (1988-91) visible minority group has the largest income range ($38,622).

In comparison with the Toronto CMA average income, men and women from both visible minority and European groups earn less than the average non-immigrant income until they have resided in Toronto (or Canada) for approximately 20 years. This indicates the importance of length of residence as a key factor in the attainment of economic parity. In addition, the data indicate the persistence of lower income patterns among visible minorities.

With the exception of those who immigrated before 1961, more recent immigrants have a greater chance of experiencing poverty. In the 1961-70 immigration cohort, 10.05 percent of immigrants were below the poverty line. This number steadily increases over time. In the 1981-1987 cohort, the LICO level increased to 19.73 percent, and to 36.56 percent for the 1988-91 cohort. This pattern of linear progression holds true also for men and women beginning with the 1961-70 immigration period. Earlier immigrants have lower levels of poverty than the Toronto average. Those who immigrated before 1981 Afared better@ than the Toronto average for the entire population (13.96 percent). In contrast, those who immigrated after 1980 fared worse. The levels of immigrant male poverty are higher than the Toronto average only for those who immigrated after 1981. Levels of female immigrant poverty exceed the Toronto average for women who immigrated after 1971. This implies that immigrant women experience longer periods of poverty. In addition, recency of immigration is a key factor in the assessment of poverty among both visible minority and European groups.

Similarly, immigrants have persistently high levels of poverty compared with non-immigrants. It is noteworthy that levels of poverty for both men and women are persistently higher than their non-immigrant counterparts across all five periods of immigration. It is also evident that the poverty level for non-immigrant men in Toronto is the lowest average noted in this study (8.38 percent).

In comparing visible minority and European immigrants, more visible minority groups experience more periods of high poverty than the European groups. Black, Latin American (visible minority and not-visible minority), Korean, Southeast Asian and West Asian/Arab, and Eastern European groups experience persistently high levels of poverty. It is clear that there are more visible minority groups than European groups that have high poverty levels. Therefore being a visible minority and an immigrant pose a double disadvantage. When data are broken down by gender, Latin American (non-visible minority) women have the highest levels of poverty. Yet the Latin American male counterpart had lower levels of poverty compared with the average for male immigrants. However, the situation is different for visible minority males. Latin American men (visible minority), Chinese men, and South European men have higher levels of poverty, and it is more persistent spanning more periods of immigration.

Toronto CMA average low income cut-off (LICO) is 13.96 percent

Non-immigrant population Toronto CMA average low income cut-off (LICO) is 9.95 percent

In an examination of the ranges of poverty, visible minority groups have higher levels of poverty compared with their European counterparts. With the exception of those who immigrated in the 1961-70 period, the percentage of the visible minority group with the highest poverty level is higher than the European group counterpart with the highest level of poverty. This suggests that, compared with European groups, more recent visible minority groups have a greater chance of being poor. When data are broken down by gender, it is noted that in four of the five immigration periods, poverty levels for female visible minority immigrants are higher than their European counterparts. The patterns for male immigrants are similar to those for female immigrants. This finding indicates male visible minority immigrants experience more extensive poverty than European men. The range in poverty levels increased among visible minority groups from the 1961-70 cohort to the 1981-87 immigrant cohort. For the European immigrants, the pattern is reversed. With the exception of the Abefore 1961@ cohort, poverty levels for visible minority groups have increased in a linear fashion, from 12.10 percent in the 1961-70 cohort to 22.26 percent in the 1988-91 cohort. However, for European groups, the pattern is reversed. Ranges of poverty levels increase with recency of immigration for both men and women. For example, levels of poverty range from 15.14 percent (for the 1961-70 cohort) to 22.47 percent (for the 1988-91 cohort) for women and 13.38 percent (for the 1961-70 cohort) to 31.69 percent (for 1988-91 cohort) for men. When data are broken down by gender, the ranges in poverty levels for visible minority men and women are higher than those for European men and women for three out of the five periods.

Do immigrants fare Abetter@ in Toronto? It is within a context of existing regional economic disparity that immigrants enter Canada. Additionally, it is understood that national averages marginalize differences. However, given that Toronto receives the largest number of immigrants anywhere in Canada, it is valuable to explore the Canadian immigrant experience as a comparator.

The following analysis compares populations of men and women combined and uses the national average and Toronto CMA average as comparators. The analyses show that: 1) in comparison with Canada, Toronto's immigrants have higher incomes, lower unemployment rates, and a lower incidence of poverty; 2) the differences (internal ranges) within each of the visible minority and European groups among all three indicators in Toronto are generally higher than the national ranges (ranges); and 3) there are some variations in the persistency of higher unemployment, lower incomes, and incidence of poverty across the five periods among certain ethnocultural groups.

Immigrants in Toronto generally have lower rates of unemployment for all five periods of immigration assessed in this study when compared with immigrants throughout Canada. The ranges in the unemployment rates are larger for European groups and lower for Visible Minority groups in Toronto for the A1981-1987@ and A1988-1991@ immigrants cohorts. A greater number of European groups (including Western Europeans, French, and British/French) experience unemployment rates higher than the national average throughout Canada than in Toronto. Generally, the same pattern of visible minority ethnocultural groups experiencing higher than average unemployment rates is found at both the national and Toronto level of analysis for the five periods of immigration. West Asians however, experience higher than average unemployment rates across the five periods of immigration in Canada, compared with only the two most recent periods of immigration in Toronto.

A greater number of European groups (including, Western Europeans, French, and British/French) experience below-average incomes throughout Canada than in Toronto. However, average incomes are higher in Toronto than they are nationally. In general, the ranges in employment incomes for both visible minority and European groups in Toronto are higher than those for the two groups in Canada. Generally, the same pattern of visible minority ethnocultural groups experiencing lower than average employment incomes is found at both the national and Toronto level of analysis. Two noted exceptions are found for the Filipino and West Asian ethnocultural groups. At the national level, these two groups experience lower incomes for longer periods of time compared with their counterparts in Toronto.

National levels of poverty for all immigrants are higher than the poverty levels found in Toronto. The distribution of ethnocultural groups with higher than average poverty levels is almost identical with the exceptions being the presence of French and Latin American (not visible minority) groups at the national level during the earlier periods of immigration. In Toronto, both visible minority and European immigrants have larger ranges in poverty levels, for most periods of immigration in comparison with national averages.

Two major patterns emerge from this study and help to shape the big picture. First, recent immigrants have higher unemployment rates, lower employment incomes, a greater tendency to be poorer than earlier immigrants, and fare worse than non-immigrants and the average Torontonian. Second, earlier immigrants fare better than non-immigrants and the overall Toronto population on the three socioeconomic dimensions examined.

This raises an important question regarding the point at which immigrants experience the same or a better economic situation than the non-immigrants and the general population. These points vary depending on the indicators we choose. For unemployment, this point occurs in 1971; for employment incomes and poverty, the point is 1981.

Although not conclusive, the data suggest that it probably takes immigrants about 20 years to be Aon par@ with non-immigrants and the general population. In terms of employment rates, parity is achieved in a shorter timeframe approximately 10 years. Yet, poverty levels for immigrants are persistently higher than levels for non-immigrants. In other words, socioeconomic parity with non-immigrants is achieved somewhere between 10 and 20 years residence in Canada. Our Toronto study findings support similar Canada-wide studies on the importance of recency of immigration as a key factor in socioeconomic status.

In general, recent immigrants experience difficulty in employment in their chosen occupations. With the exception of immigrants from the U.S. and the U.K., Canadian employers do not view credentials earned in other countries as equivalent. The issue of recognition of foreign credentials has been examined and assessed for a number of years. The federal government is currently coordinating credential equivalency assessment and recognition processes. In addition, provincial professional licensing bodies are enacting their own assessment processes. To date, most of these processes are concerned with the assessment of trade and/or professional education, not prior learning or experience. Consequently, immigrants have their education assessed and generally do not receive credit for foreign experience. This results in longer job search times and employment in lower-level jobs (underemployment) that have lower wages. In sum, our research has underscored the complexity of the immigrant experience in Toronto.

The complexity of the immigrant experience is underscored by our analysis of immigrants' economic contributions. Using the recently released IMDB data, the analysis compares income taxes paid by Toronto's immigrants in 1995 as a major form of economic contribution, with welfare/UI benefits collected by the same immigrant population in the same tax year as forms of economic burdens. The target immigrant population comprises those who landed in the Toronto CMA between 1980 and 1995, and were 15 years of age and over in the 1995 tax year. In this analysis, a Abalance-sheet approach@ is used to document per capita income tax contributions, per capita welfare benefit receipts, per capita UI benefit receipts, tax-benefit ratios, and tax-benefit differences. In addition, we look at such indicators as percentage of immigrants reporting income tax, welfare dependency rate, and UI usage rate. Our analysis is made first for the immigrants as a whole, then for subgroups as distinguished by immigration class, level of education, country of last permanent residence, and length of residence in Canada. Moreover, reference is made to the general population of Canada (including immigrants).

Before analytical results are discussed, some limitations must be acknowledged. First, the current contents of the IMDB do not allow for a complete assessment of Immigrants' economic impact, as the data do not include all forms of contributions and benefits mentioned in this chapter's introduction. Therefore, both contributions and benefits are only narrowly defined in this study and are limited to income tax and two major types of social assistance: welfare and UI benefits. Secondly, the economic data used in this analysis are for one tax year only. This means that the special IMDB tabulation identifies the numbers of taxpayers and benefit recipients at a point in time rather than for a continuous period, and potential exists for biased conclusions. Thirdly, entrepreneurs and investors may have paid more business income tax than personal income tax. But because business income tax is not yet included in the IMDB, our analysis does not capture this contribution. As well, IMDB does not contain data on number of jobs that entrepreneurs and investors created, which is another important form of economic contributions.

In 1995, 507,300 immigrants, or 62 percent of the target immigrant population, filed tax returns; in total, they reported $1.5 billion for income taxes (both federal and provincial). In the same year, 77,800 immigrants, or 9 per cent of the target immigrant population, received $607.8 million in welfare benefits; and 66,800 immigrants, or 8 percent of the target immigrant population, received $281.6 million in UI benefits. Subtracting both types of benefits from total income tax, Toronto's immigrants made a net contribution of $578.2 million to Canada's treasury, with a T-B ratio (ratio of income tax to benefits) of 1.7:1, meaning that for every $1.7 they contributed as income tax, they collected $1 in welfare or UI benefits.

Compared with the general population of Canada, there was a lower percentage of immigrants reporting income tax (62 percent vs. 89 percent) and the immigrant tax payers on average paid lower income tax: about $2,000 (40 percent) less than the average Canadian did. As a result, the T-B ratio of 1.7:1 for immigrants is lower than the ratio of 3.9:1 for the general population of Canada. However, immigrants also exhibited a lower welfare dependency rate and a lower UI usage rate than the general population of Canada: 9 percent versus 13 percent for welfare and 8 percent versus 16 percent for UI benefits.

At one level of aggregation in the IMDB, immigrants are grouped into 13 classes. For convenience of discussion, these 13 classes are further generalized into 3 broad categories: (1) economic immigrants, (2) immigrants accepted for family reunification, and (3) those admitted on humanitarian grounds (see Table 1). Within the first category, the independent class refers to individuals admitted on the basis of skills, education, language ability, and occupational background; they include both professionals and skilled workers. Retirees are included in this category because they are admitted on the condition that they bring a required amount of capital funds to spend in Canada and support themselves. In the second category, Family Members include spouses, dependent children, parents, and grandparents of Canadian citizens or landed immigrants, all others are classified as Assisted Relatives. In the third category, Designated Class consists of immigrants admitted under special government programs, usually in response to home countries' upheaval political conditions. Deferred Removal Order Class refers to the immigrants who at one time were ordered to leave Canada but the removal order was never enforced.

In general, the percentage of economic immigrants reporting income tax is very close to the average for all immigrants (63 percent vs. 62 percent), but they have much higher ability to contribute, meaning that they are able to pay more income taxes than the other two categories of immigrants. On average, economic immigrants each paid $4,323 in 1995, about 85 percent more than what the other two categories of immigrants paid. They also have a much lower welfare dependency rate (5 percent) and a lower UI usage rate (7 percent), though the recipients on average received similar amounts as immigrants of the other two categories did. Accordingly, the T-B ratio for economic immigrants is the highest (3.5:1) and is close to the Canadian average (3.9:1). They also made the most net contributions ($445.1 million) to Canada's treasury. While they account for only 28 percent of the target immigrant population, their net contribution amounts to 77 per cent of the Immigrants' total.

Of the various classes of economic immigrants, independent immigrants are able to pay the highest income tax: $4,977 per taxpayer. Entrepreneurs and self-employed immigrants pay less tax than independent immigrants probably because they are eligible for tax exemptions for business-related expenses. Still, entrepreneurs and self-employed immigrants pay much more tax than they take from the system, as is evidenced by the high T-B ratios for them: 6.6:1 and 6.0:1, respectively. Even the retirees made a significant net contribution of $13 million in 1995, with a high T-B ratio of 9.8:1. The only surprise comes from the observation that the investor immigrants show a high UI usage rate of 13 percent, 4 percentages higher than the average for all immigrants.

It must be pointed out that the economic immigrants in the IMDB include not only principal applicants but also their spouses and dependent children. It is therefore appropriate to have their economic impacts examined separately. After separation, it is found that the principal applicants actually make much more contributions than what the statistics for both PA and their spouses/dependants combined reflect. For instance, the percentages of principal applicants reporting income tax are actually as high as 75, 94, 68, and 61 percent for independents, entrepreneurs, self-employed, and retirees, respectively (see the figures in brackets in Table 1); their per capita tax contribution is also shown to be higher: about $1,000 higher.

As a whole, immigrants accepted for family reunification also made a significant positive contribution to Canada's treasury, with a net contribution of $229.6 million in 1995. While these immigrants account for 57 percent of the target immigrant population, their net contribution accounts for 40 percent of the Immigrants' total. Notably, assisted relatives, who are subject to the point system but receive bonus points for having relatives in Canada, have a higher percentage of them paying income tax and are able to pay more dollars than do family members. At the same time, they exhibit a much lower welfare dependency rate, only 4 percent. This resulted in a much higher T-B ratio for assisted relatives (2.6:1).

Despite the high percentage of humanitarian immigrants making tax contributions (76 percent), their overall ability to contribute appears low, and both their welfare dependency rate and UI usage rate are high: 24 and 11 percent, respectively, both being higher than those for economic and family reunification immigrants. This results in a low T-B ratio of 0.7:1, at which point the benefits they received in 1995 exceeded the income tax they contributed in the same year. Apparently, this negative balance was due solely to refugees and their dependants (see Table 12).

It is normally believed that the more educated the immigrants are at the time of immigration, the more contributions they are able to make to the host economy because well-educated immigrants tend to adapt and adjust to the labour market more quickly and they require less public money for re-education and training. In fact, this belief is well reflected in the point system imbedded in the modern Canadian immigration program, and supported by the Swan et al. (1991) study. In the 1980s and the 1990s, the Canadian economy has been undergoing a transformation from the traditional industrial economy to a high-tech information economy. Since the transformation is accompanied by increasingly higher demand for a sophisticated labour force, the above belief about immigrants is more widely accepted now than ever before. While we do not doubt this belief, we intend to find out which immigrants by level of education⁴ are likely to be economic burdens to Canada's transformed economy. It should be explained that in the IMDB, level of education refers to education attainment at time of landing; any subsequent upgrading is not captured.

As Table 13 shows, except for those with 0B9 years of schooling, immigrants with different levels of education have similar percentages of reporting income tax, ranging from 65 to 70 percent. However, their ability to contribute increases, first slowly then sharply, with an increase in levels of education, as reflected by the amount of per capita income tax and T-B ratios. This is especially true of the immigrants with graduate degrees. For instance, masters each paid $8,000 in income tax in 1995 and doctorates each paid $13,229.

Both masters and doctorates also have the lowest propensity for welfare and UI benefits, though the recipients on average seem to have collected about the same dollars as other immigrants do. Immigrants with a bachelor's degree are the largest group of net contributors: they account for only 12 percent of the target immigrant population, but their net contribution of $246.1 million comprises 43 percent of the Immigrants' total. This is an immigrant group whose T-B ratio is similar to that of the general population of Canada, but they exhibit much lower propensity for welfare and UI benefits.

The only immigrants who received more benefits than the income taxes they paid are those with 0-9 years of schooling. Although the immigrants with 10-12 years of education are able to make a positive net contribution, their T-B ratio approaches to 1:1, and their net contribution is much less significant compared with their share in the target immigrant population (6 percent vs. 27 percent). It is important to point out that 80 percent of the immigrants with 0-9 years of schooling and 79 percent of those with 10-12 years of education were principal applicants and their spouses. These taxfilers were all adults at the time of landing and would have completed their education in their home countries. The findings from the IMDB should therefore represent a fairly reliable relation between their level of education (at time of landing) and their economic impact.

After 1962, Canada began to accept immigrants not only from the traditional source areas but also from developing countries with no quota for any specific country (Green 1995). Since the early 1980s, main origins have shifted from the traditional source countries of U.S., Britain, Western Europe, and Australia to the less developed countries in Asia, Latin America, and Africa. Along with the shift are increased public concerns with reduced ability of immigrants to contribute to the Canadian economy. But to what extent are these concerns valid?

Table 14 summarizes the economic impacts of immigrants by world regions of Immigrants' last permanent residence: (1) traditional source countries of U.S., Britain, Western Europe, and Oceania; (2) Eastern and Southern Europe; (3) Asia; (4) Latin America and the Caribbean; and (5) Africa.

Relatively speaking, immigrants from the traditional source countries have the lowest percentage reporting income tax (50 percent). Yet, they show the highest ability to pay income tax ($8,262 per taxpayer in 1995), and they have the lowest welfare dependency rate (2 percent) and the lowest UI usage rate (5 percent). This results in a significantly high T-B ratio of 9.7:1. Immigrants from the traditional source countries account for only 10 percent of the target immigrant population, but their net tax contribution in 1995 was 48 percent of the Immigrants' total, or $279.5 million.

Although there is a much higher percentage (69 percent) of Eastern and Southern European immigrants reporting income tax than those from Britain and Western Europe, their ability to contribute is lower. On average, the taxpayers from Eastern and Southern Europe each paid $3,303 in 1995; in the same year, they showed a higher welfare dependency rate (11 percent) and a higher UI usage rate (12 percent). However, despite their low T-B ratio of 1.4:1, their income tax still exceeded the benefits they collected, with a positive balance of $78.3 million in 1995.

Compared with immigrants from Eastern and Southern Europe, Asian immigrants as a whole show a slightly lower percentage reporting income tax (62 percent), and Asian taxpayers seem to have a lower ability to contribute as well, with each paying $2,187 in 1995. Because they also have a lower propensity for welfare and UI usage (8 percent and 7 percent, respectively), Asian immigrants contributed $188.5 million more in income tax than they collected as benefits in 1995. Nonetheless, this represents a relatively low share in the Immigrants' total net contribution compared with the share of Asian immigrants in the target immigrant population (32 percent vs. 51 percent, see Table 14). It should also be noted that immigrants from Asian countries vary considerably in their economic impacts. Those from Hong KongCthe largest single source area of the 1980s and the 1990sCexhibited the lowest propensity for welfare and UI usage (1 percent and 3 percent, respectively) and the highest T-B ratio (7:1). Immigrants from the Philippines, other Eastern and Southeast Asian countries, and India were also able to make sizeable positive net contributions as they exhibited a relatively low dependency on welfare. Those from Western and Southern Asia (excluding India), who account for 13 percent of the total target immigrant population, showed lower T-B ratios as a result of higher dependency on welfare.

The percentage of immigrants from Latin America and the Caribbean who report income tax, is similar to that of Asian immigrants (61 percent vs. 62 percent), but they show higher ability to contribute ($2,490 per taxpayer vs. $2,187). Despite this, their T-B ratio is measurably lower: 1.1:1, due mainly to a higher welfare dependency rate (13 percent) and UI usage rate (9 percent). Their net contribution in 1995 accounts for 4 percent of the Immigrants' total, lower than their 18 percent share in the target immigrant population. Like the Asian immigrants, those from Latin America and the Caribbean's vary considerably in their economic impact, with those from Central America and Jamaica showing lower T-B ratios than those from other countries in the same region.

At 20 percent, African immigrants as a whole seem to show the highest welfare dependency rate. But because the percentage of African immigrants who make income tax contributions is also high (72 percent) and the taxpayers on average pay more dollars than immigrants from Asia and Latin America, their net contribution is still positive, with a total of $10.5 million in 1995.

Understandably, it takes time for immigrants to settle down in their adopted community, adapt into the new social and economic environment, and find jobs. For some, this process may be longer than for others, depending on the similarity of their social and economic background to the characteristics of the host population. But in general, as length of residence increases, they accumulate more work experience and their English proficiency tends to increase as well; accordingly, they should achieve higher levels of economic performance and their ability to contribute to the host economy increases. Therefore, analysis of Immigrants' economic impact must also consider their length of residence in Canada.

To control possible fluctuating effects caused by minor differences between any two consecutive landing years, the 16 years 1980-1995 are grouped into three 5-year periods (with the last period covering 6 years). Analysis shows that length of residence in Canada has no obvious effects on percentages of immigrants who report income tax, welfare assistance, and UI benefits. However, it reveals that earlier immigrants are indeed able to pay more income tax but collect fewer welfare dollars. For example, the taxpayers who landed between 1980 and 1984 each paid $3,092 in 1995, and welfare recipients of the same landing period each collected $5,145. Taxpayers who landed between 1985 and 1989 each paid $2,273, and welfare recipients of the corresponding landing period each collected $8,432. Those taxpayers and welfare recipients who arrived subsequently paid $1,221 or collected $8,316 each. Accordingly, T-B ratios for the three groups are in the descending order of 3.6:1, 1.9:1, and 1.1:1, respectively. It is useful to point out that although the immigrants arriving in the second half of 1980s came to Toronto at a better economic time with good employment opportunities, that has not altered the linear descending order of T-B ratios in relation to length of residence in Canada. These patterns seem consistent with the research findings of Akbari (1995), DeSilva (1992), and Fagnan (1995), and suggest that contribution of immigrants should be expected to realize in a reasonably long period (about 10-15 years as this study indicates), instead of in short or immediate terms.

Subject to the limitations described at the outset of this section, our analyses show that Toronto's immigrants admitted between 1980 and 1995 do not obtain social assistance in excess of income tax they pay. In other words, there is no evidence that these immigrants are an economic drain on the host society; instead, they as a whole make positive net contributions to Canada's treasury. At the same time, our analyses show that immigrants in general have not been able to contribute to Canada's treasury at the same level as average Canadians do. Since a low T-B ratio is usually caused by low income and insecure employment, it is also indicative that immigrants have not achieved levels of economic performance and security comparable to those of native-born Canadians. Among other things, this may be attributed to the fact that 57 percent of the target immigrant population had been in Canada for less than 6 years when their 1995 tax return was filed. As length of residence in Canada increases, the gap in economic contributions between the target immigrant population and the native born Canadians should reduce, if not diminish.

While immigrants as a whole make positive net contributions, important internal differences remain. The economic immigrants have the highest ability to pay income tax. This is especially true of the independent immigrants whose language and jobs skills are subject to full assessment at time of application under the point system. This proves that the point system has been working well for the economic well-being of Canada. The retirees are also able to make a substantial positive net contribution because they pay income taxes but receive (or are eligible for) little social assistance. Entrepreneurs and investors, who are expected to be able to pay high income tax, actually paid less than the immigrant average; and the high UI usage rate of investors (including their spouses and dependants) is also unexpected. These may be accounted for, at least partially, by the following explanations. Entrepreneurs and investors may have paid more business income tax than personal income tax, but business income tax is not included in the IMDB yet and this part of contribution is not captured in the analysis. This points to the inadequacy of IMDB for assessing economic impacts of entrepreneurs and investors. It is also possible that entrepreneurs and investors are better able to shelter their income in various ways. They may, for example, keep re-investing their income, thus reducing or postponing income taxes payable to the government treasury. If this is true, then non-immigrant entrepreneurs and investors would have also paid less income tax than employed workers and professionals. Unfortunately, this cannot be verified in this study due to lack of data. Furthermore, due to the relative recency of the Investors Program, 91 percent of the investors had been in Canada for less than 6 years by the time they filed their 1995 tax returns. Their short length of residence in Canada could have been a factor for their lower-than-average income tax contribution, as most investments are long-term commitments with little return in the first few years. As well, as Kunin and Jones (1995) suggested, their low tax contributions may point to the lack of accountability on the part of their Canadian investment managers.

Contrary to popular belief, immigrants admitted for family reunification, especially assisted relatives, also make positive contributions to Canada, though their T-B ratio is lower than that for economic immigrants. Thus, they are not economic burdens to Canada, as many have perceived. The only classes of immigrants who seem to receive more benefits than the amount of taxes they pay are refugees and their dependants. This seems to agree with Lui-Gurr's (1995) observation that refugees are at a greater risk of welfare dependency. The high welfare dependency rate for Toronto's refugees may be explained by both their lower level of education and their shorter length of residence in Canada. For instance, 64 percent of refugees came to Canada with 12 or less years of education (25 percent with 0-9 years; 39 percent with 10-12 years), and only 9 percent with university degrees. As well, 66 per cent of all refugees arrived in Canada in 1990 and after. Nonetheless, refugees and their dependants are admitted into Canada for political and humanitarian reasons, not for their economic potential. Moreover, they account for only 7 percent of the target immigrant population, and the cost of providing benefits to refugees and their dependants can be adequately offset by the positive income tax transfers from other immigrants in the Toronto CMA.

The differences in economic impact between immigrants from traditional source areas and the rest of the world would seem to result from the former having higher proficiency in English or French; but language ability alone cannot fully explain the differences. Many immigrants from the Caribbean and African countries do speak fluent English or French, but their levels of economic contribution are much lower than those of the immigrants from the U.S., Britain, Western Europe, and Australia. In addition to other possible barriers (including discrimination) that reduce the ability of immigrants from developing countries to contribute to the Canadian economy, both immigrant mix and level of education lend explanations to the differences among immigrants by country of origin. For instance, the majority of the immigrants from traditional source countries came to Canada as economic immigrants (54 percent), but only 1.5 per cent were humanitarian immigrants. Economic immigrants from other world regions range from 22 to 34 percent; and humanitarian immigrants range from 9.6 to 32 percent. As for level of education, immigrants from the traditional source countries have the lowest percentage (20 percent) with minimal education (0-9 years of schooling), but the highest percentage with university degrees (21 percent), especially with graduate degrees (6.5 percent). In the case of Latin America and the Caribbeans, 41 percent the immigrants came to Canada with 0-9 years of schooling, 32 percent with 10-12 years of education, and only 4.5 percent with university degrees. Immigrants from other regions have higher levels of education than those from Latin America and the Caribbean, but still much lower than the immigrants from the traditional source countries.

The empirical findings raise a number of policy and program issues. They also point to directions for further research. Beginning with the policy issues, the findings underscore the heterogeneity of Immigrants' economic experiences. We found a number of intergroup and intragroup patterns. With only a few exceptions, recent immigrants work in a wider range of industries and experience higher unemployment rates and lower incomes than the earlier immigrant counterparts. The varied experiences of recent immigrants suggest that it may be useful to review the assistance provided during the initial phases of settlement. We need to determine if current settlement and integration programs in Toronto prepare recent immigrants for the job market with its demanding educational, skill, and language requirements. Elsewhere, the provision of specialized language training designed for physicians, nurses, engineers, and other professionals has facilitated accreditation and recognition of foreign credentials enabling immigrants to re-engage in their chosen their professions (Hathaway 1999).

Some recent immigrants may require more assistance than others. European immigrants "fare better" on socioeconomic indicators compared with visible minority groups. Effective strategies are needed to reduce the current gap between the incomes and unemployment rates of European and visible minority immigrants. However the task is complex. Incomes and employment rates do not increase in a linear fashion with years of residence of Canada. The complicated relationship illustrates the need for sophisticated policies that take account of diverse immigrant realities. Moreover, the interactions among settlement services, public education initiatives, skills development programs, and other settlement infrastructure need to be evaluated when programs are under review. The impact of changes in the provision of language training illustrates the importance of considering how policies interact. In the early 1990s, Citizenship and Immigration Canada attempted to increase the availability of language training courses by eliminating training, transportation, and child care allowances and redirecting the funds to provide more language classes. Subsequent research demonstrated that without the allowances, many women are unable to attend language training (Preston and Man 1999).

The persistence of Adisadvantages@ for specific immigrant groups as evidenced by high unemployment, low income, and poverty illustrates the failure of immigrant settlement and integration policies. For example, Latin American visible minority immigrants have persistently high unemployment rates and low employment incomes; Blacks have persistently low employment incomes and high levels of poverty; Koreans and non-visible minority Latin Americans have persistently low employment incomes; and West Asians have persistently high levels of poverty. The "persistence" implies that these immigrants face systemic barriers, requiring a sustained institutional response that may include regulatory responses in addition to the provision of settlement and integration services.

On many economic dimensions, unemployment, incomes and poverty, the impact of recency of immigration is strong and affects both sexes. Recency of immigration differentially affects women and men, appearing to reverse the traditional advantages of men. For example, in the most recent immigration period, European and visible minority men had higher unemployment rates than women. In some cases, one's ethnocultural group has a stronger influence than gender. For example, European groups have higher incomes than visible minority groups regardless of gender. Other indicators underscore the importance of gender. For example, non-visible minority West Asian and Latin American women have higher unemployment rates than their male counterparts. The wide gaps among immigrant cohorts suggest that service agencies should have a repertoire of flexible strategies that can be adapted to changing demographic components in the communities. Government funding formulae may need to permit more local autonomy. The variation among immigrant groups also highlights the need for increased representation and voice for all immigrant communities. More attention to community consultations with immigrant groups and inclusion of immigrants themselves in the governing bodies of service agencies are essential first steps to the removal of the employment barriers faced by many immigrants, specifically, recent immigrants and visible minority immigrants.

The varied experiences of immigrants reveal the incongruity between immigration selection policies and integration policies. The concentration of many working immigrants in manufacturing and other declining sectors and the long period of time required for immigrants to achieve parity in income and employment are two indications that the skills and work experiences of immigrants selected carefully under the current points system are not fully utilized. The underutilization of a skilled immigrant labour force has implications for national productivity, regional/local economic development, and the commercial/consumer market.

Education has emerged as a good predictor of Immigrants' net economic contributions and the probability that immigrants will rely on social security programs. While in the short run, economic immigrants are also more likely than other classes of immigrants to make positive net contributions to the Canadian economy, all Canadians, native-born and newcomers, are entitled to normal family lives. To enrich and facilitate family life, immigrants should be allowed to bring their immediate family members, such as spouse, children, and dependent parents, to Canada. Of course, all immigrants must meet Canadian health and security requirements.

Researchers need more detailed information about immigrants' employment experiences. Census information can only describe aggregate trends in the labour market. Qualitative research examining the work histories of immigrants is needed to understand the social and economic processes that contribute to their persistent vulnerability in the Toronto labour market. Research should consider the work histories of immigrants who have succeeded in obtaining remunerative jobs commensurate with their qualifications as well as those who struggle to find and keep appropriate employment. Such comparative research may reveal the factors contributing to success more readily than many previous studies that have concentrated on the least successful.

The emergence of a large immigrant middle class, the expansion of the immigrant working class, together with the growth of a variety of ethnic economies and varying degrees of ethnic niching and economic incorporation, provide a rich context for studies of immigrant entrepreneurship. However, the activities of only a few groups have been studied and compared. Compared with the United States, little is known about the determinants of entrepreneurialism and its relative merits. We still do not know what social and economic factors promote entrepreneurialism among immigrants from various backgrounds. A few studies have examined social barriers to entrepreneurship, but none have considered policy barriers. We need comparative research focusing on the interplay between ethnicity, race, and gender and successful entrepreneurialism. In particular, the role of women has hardly been discussed.

The role of space and place in ethnic entrepreneurship has also been overlooked. We do not know the significance of changes in the locations of ethnic economies. For example, the reasons for the relocation of Italian businesses from Kensington Market to Corso Italia and most recently, to the northern suburbs of the Toronto metropolitan area as well as the impact of relocation are open to interpretation. The assumption is that businesses followed the Italian population that had relocated to the suburbs. However, much residential development in Toronto's outer suburbs is preceded by commercial development. This pattern of development suggests that the suburbanization of Toronto's Italian population may be due in part to the relocation of the community's ethnic economy. The meaning of changes in the location of an ethnic economy are also unclear. Does a change in location indicate that the ethnic economy is becoming more diversified and more integrated into the larger urban economy? What factors contribute to the persistence of ethnic economies at one location even as one immigrant group is succeeded by another? How do changes in the locations and sizes of ethnic economies affect the relations among immigrant groups?

More empirical studies of Immigrants' economic impact are needed to guide future changes in Canada's immigration system. Empirical studies must consider many more forms of economic contributions and burdens than was possible here. Among the most important may be the contributions of immigrants to establishing and maintaining international business links. If possible, a comprehensive contribution-benefit ratio that is acceptable to Canada can be derived and an appropriate mix of immigrants then be determined to achieve the ratio. The economic impact of immigrants should also be periodically monitored against the critical C-B ratio and adjustment to immigrant mix made if necessary.

Our research has highlighted the diversity of the immigrant experience in Toronto's economy. Toronto's immigrants are better off than immigrants across Canada, although the variations among visible minority groups and among European groups are higher than the national figures. This suggests that Toronto's high economic performance provides some benefits to its immigrants. Despite the advantages of living and working in Toronto, immigrants do not always achieve economic success. Our research has allowed us to outline the contours by which immigrants are differentiated, but additional research is needed to specify the processes creating difference.

Recency of immigration is a factor meriting further attention since our research shows it differentially affects women and men. Yet when both sexes are combined, recency acts as a direct correlate of socioeconomic status in Toronto. Recency of immigration appears to reverse the traditional advantages of men (for example, in the most recent immigration period, both European and visible minority men fared worse in unemployment than women). In some cases, ethnocultural group origin is stronger than gender. For example, European groups have higher incomes than visible minority groups regardless of gender. Alternatively, there are indicators that show the importance of gender. For example, women of certain ethnocultural groups (such as West Asian and Latin American, not visible minority) have higher unemployment rates than their male counterparts. Future research may be done in several areas: (a) identifying the causal factors for immigrants' unemployment, incomes, and poverty status through a study of their education, former occupation, language, place of origin, etc.; (b) determining the importance of the "ethnicity" factor by disaggregating the visible and European categories; (c) determining the relevance and usefulness of settlement and integration infrastructure in Canada when immigrants arrived; and (d) identifying the "success factors" for some immigrants

The complex ways that different variables affect each other indicates the need for policies and programs that are grounded in current research designed to target specific issues. Although we recognize the necessity for further research, our study has enabled the identification of potential priority areas for funding and program design.

ENDNOTES

..    The typology of industries was largely dictated by the information available in the Public Use Microdata Sample. To increase sample size and facilitate comparison with previous research, information is reported for eleven industries. The goods-producing industries include manufacturing and processing industries that are combined as well as construction. Following the typology proposed by Stanback and Noyelle (), service industries are combined into eight categories: distributive services that consist of wholesale trade and the regulated transportation, communications, and utilities industries, producer services that include business services and finance, insurance and real estate services, social services that consist of health and social services, government administration, and education, and finally, consumer services that include retail trade, accommodation, food and beverage services, and all other services not classified elsewhere.
..    The marked gender division of labour means it is more appropriate and more informative to compare immigrant women's employment patterns to those of Canadian-born women than to those of the total labour force. The value of location quotients range from 0.0 upwards. A value of 1.0 indicates that the two proportions are identical, while values less than 1.0 reveal that immigrant womens' proportion of employment in the industry is less than that of Canadian-born women. Values greater than 1.0 reveal an over-representation of immigrant women in the industry.
..    The aggregate information may mask substantial differences in the propensity for self-employment among immigrants from different birthplaces and ethnic groups (Reitz 1998).
.
.    Location quotients were also calculated in which the divisor was the proportion of all Canadian-born workers in an industry. The resulting location quotients largely reflected the effects of gender, rather than ethnic origin. The small size of the samples for several ethnic origins meant it was impossible to compare separately immigrant and Canadian-born workers from the same ethnic background.
..    The socioeconomic characteristics of the population used for this study were derived from a 20 percent sample of households and exclude residents of institutions such as prisons, orphanages, and nursing homes.
..    Persistence is defined as being represented in four or all five of the immigrant cohorts.
..    IMDB stands for Immigration Data Base. It is not a single database, but a database system consisting of several relational databases maintained by Citizenship and Immigration Canada and Statistics Canada. Two special tabulations from the IMDB were analysed for this research: one contains landing records for all the immigrants in the Toronto CMA, who landed between 1980 and 1995; the other is made of data from the 1995 federal tax returns filed by the same immigrants. The first tabulation provides detailed information on demographic, social, and economic characteristics of the immigrants at time of immigration: such as age, gender, family status, country of last permanent residence, level of education, and immigration class. The second tabulation contains total income; employment income; self-employment income; investment income; federal income tax; social welfare benefit; unemployment insurance benefit; and number of immigrants who reported each type of income, tax, and benefit. Provincial income tax was not included in the original database, but it was easily recovered using the rate of 58 percent of federal income tax, which was provided in the 1995 Ontario Tax Return Guide.
..    UI stands for unemployment insurance. Since 1996, it has been changed to EICemployment insurance.
..    The proportion of immigrants reporting income tax and welfare dependency rates is calculated for the immigrants who were 15 to 80 years old in 1995 (those above 80 are excluded to control mortality effect); whereas the UI usage rate is calculated for those who were 15 to 65 in 1995, as they were the immigrants legally eligible for UI benefits in that year. Given that some immigrants might have moved out of the Toronto CMA after they first landed here, rates of secondary migration are estimated for each subgroup using a similar IMDB table for the Province of Ontario. The Ontario table has the same landing-year coverage (1980-1995) and also contains 1995 tax data; better yet, it records the number of immigrants who originally landed in Ontario but were residents of other provinces in 1995. Using the Ontario data, various emigration rates were calculated for each subgroup of immigrants and applied to the Toronto study. While not perfect, they are the best estimates possible.
..    All statistics for the general population of Canada are also for those of 15 years of age and over. They are calculated from the following sources: Minister of Industry (1998, 1999); Minister of National Revenue (1998); National Council of Welfare (1996, 1997); Revenue Canada (1995); and Statistics Canada (1996).

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1. Principal applicants for investors cannot be separated from spouses and dependants due to an inconsistency problem in the two special tabulations. That is, the number of principal applicants for investors in the 1995 tax file exceeds the total number of principal investor applicants in the landing files of 1980B1995. It seems the principal applicants and non-principal applicants are not separated properly in the tax file.

2. A hyphen is used where a per capita value cannot be calculated because the number of immigrants is small and rounded to zero by Statistics Canada for reasons of confidentiality.

Authors:

Lucia Lo, Department of Geography, York University
Valerie Preston, Department of Geography, York University
Shuguang Wang, Department of Geography, Ryerson Polytechnic University
Katherine Reil (student), Department of Sociology, University of Toronto
Edward Harvey, OISE, University of Toronto
Bobby Siu, Community researcher, Infoworth Company

		Updated February 09, 2004