Immigration and the Canadian Earnings Distribution in the First Half of the Twentieth Century

We use newly available micro data samples from the 1911, 1921, 1931 and 1941 Canadian Censuses to investigate the impact of immigration on the Canadian earnings distribution in the rst half of the 20th Century. We show that earnings inequality increased dramatically between 1911 and 1941, with most of the change occurring in the 1920s. This coincided with two of largest immigration decades in Canadian history (the 1910s and 1920s) and then the smallest immigration decade (1930s). We nd, however, that immigration was not a prime cause of the increase in inequality in these years. The relative lack of eect arose for three reasons. 1) in the laissez-faire immigration policy before WWI, immigrants self-selected to have an occupational distribution that was similar to that of the native born; 2) in the 1920s, when immigration policy brought in a large number of farm labourers, immigrants adjusted geographically and occupationally after arrival to again end up with an occupational distribution similar to that of the native born; 3) general equilibrium adjustments in the economy helped mitigate the eects of occupation-specic immigrant supply shocks.