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

ŠLucia 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 institut