This project examines and analyzes how a Canadian immigrant’s dominant language
fluency affects their earnings. The statistical methods of analysis used were Ordinarily Least
Squares, random effects and fixed effects to estimate coefficients and relationships. The panel
data used is the 1971 Longitudinal Survey of Immigrants in Canada (LSIC)1 from the Public Use
Microdata File. The results of the analysis showed that dominant language fluency affects
earnings differently in different countries. As the level of fluency increases so does the earnings
of the immigrant. In particular, full fluency in the dominant language has a positive relationship
with earnings. The project finds that an earnings premium is paid to immigrants with full fluency in the
dominant language. Policy recommendations include: Improving immigrant’s access to fund for the purpose of improving their language human capital, TFW’s applying for permanent residency should be required to show proof of fluency in the dominant language, Improvement on how the point system allots points to other human capital factors that signals an immigrants ability to acquire language capital.
This project is limited by the data used as it is dated. The relationship between language
fluency probably has significantly changed over the last three decades. Having access to newer
data would most likely result in adjustments to the policy recommendations.