Testing and Extending the Escalator Hypothesis: Does the Pattern of Post-migration Income Gains in Toronto Suggest Productivity and/or Learning Effects?

Abstract

Workers earn incomes that are significantly higher in large metropolitan areas as compared with other locations in the urban hierarchy, reflecting both agglomeration economies and variation in the composition of skills and abilities across space. What benefits accrue to in-migrants to large urban areas? Fielding’s concept of the escalator region provides one way to evaluate the role of large metropolitan areas vis-à-vis the labour market, occupational mobility and migration. The purpose of this paper is to evaluate whether young adult migrants to Toronto aged 20–29 receive income benefits that are higher than those associated with other migrants or stayers. Results indicate that Toronto in-migrants receive an income benefit consistent with a productivity effect that is greater than the income benefit received by migrants elsewhere in the system or those who did not migrate. However, it does not appear that migration leads to an acceleration in income gains.