Many migrants could face financial difficulty in older age, a new study has found.

The study, by Canadian sociologist Leafia Zi Ye, says that migrants typically enter the labour market with lower wages than native-born citizens do, but eventually catch up over time.

But their income falls behind once they turn 50 and the disadvantage worsens as they age.

“Immigrants support the economy of aging societies in many ways. They pay into social pension programs, which finance the lives of retirees. Many of them work in the care industry and directly serve older people, which reduces nursing home needs on a community level,” said Assistant Professor Zi Ye, of the University of Toronto.

“Immigrants themselves also benefit economically from moving to a new country. At every education level, they typically enter the labour market with lower wages than native-born citizens do, but eventually catch up over time.”

But the study showed a different scenario when migrants retire.

Prof Zi Ye focused on men who immigrated to the United States between the 1960s and 1980s – a group that had previously been found to have achieved upward mobility in the labour force.

Using data representative of older adults in the US, she compared these immigrant men to native-born men with similar educational backgrounds.

“Consistent with the narrative that they made much economic progress as young workers, immigrants in my study receive 90 per cent of what their native-born counterparts receive in income at age 50,” she said.

“However, after age 50, immigrants started receiving increasingly less income compared to native-born individuals. It is as if they begin experiencing a reversal of the upward trajectory they once had, undoing all the progress they had gained.

“As immigrant men reach their 60s, their income relative to the native-born shrank to just over 80 per cent. This gap widened around age 65, the typical retirement age. By ages 75 to 79, the same immigrants only received 68 per cent of what their native-born counterparts did.

“This pattern of “aging into disadvantage” was present whether I focused on men with low or high education. It also held true for men across racial and ethnic groups.”

Prof Zi Ye said part of the reason for the scenario is that income sources change as people age.

“Before reaching 50, immigrants are able to catch up with native-born individuals through labour force income (money earned from jobs). After 50, however, people increasingly rely on passive income from pension and insurance programs. This is where immigrants fall short,” she said.

The report outlines two reasons for the fall in income.

Social pension benefits are based on people’s earnings over their entire career. Immigrants have lower earnings upon arrival because it takes time to acquire the skills their host country needs.

Also, since part of their work experience may have been gained before immigrating, they have contributed less to old-age benefits in their host country. Although their earnings grow quickly once they have settled in, the initial disadvantage still reduces immigrants’ retirement benefits.

“Immigrants are also more likely to be in occupations that offer poorer benefits, such as farming, taxi driving and caregiving. Even as they get raises at work, their employers may not contribute much to their retirement plans,” Prof Zi Ye said.

“Around the world, countries continue to use immigration to combat the economic pressures of aging. And it has worked: in Canada, the medium and average age both fell in 2023 — for the first time in decades — thanks to the country’s aggressive approach to recruiting new immigrants.

“This has created an image of immigrants as young workers. But immigrants age too — and in large cities such as New York City, immigrants now make up the majority of the population over 65. In Toronto, where I live, two in three senior residents are foreign-born.”