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How migrants are helping meet skills demands

03 December 2015

Migration to Australia has played an important role in Australia’s productivity growth, and migrants have increased the skills and flexibility of the labour market according to a new report released today.

The report – Migration and productivity in Australia – has been written by researchers at Crawford School of Public Policy for the Department of Immigration and Border Control. In it, the researchers examine the links between productivity and migration – a rarely-studied area.

Report author Sue Regan said the study contained a number of new pieces of research: an analysis of the productivity of individual migrants (using earnings as a proxy); an exploration of the relationship between ‘connectedness’ (social networks) and productivity; and an analysis of the contribution of migration to an increase in workforce skills and productivity growth.

“Between 2006 and 2011, the data suggests that migrants have met a third of the increase in skill requirements of work in the market sector. That has contributed about 0.2 of a percentage to the annual rate of productivity growth,” she said.

“Additionally, work performed by migrants is more skilled, on average, than work performed by the Australian-born. Because that work is more skilled, migrants enjoy a six per cent wage advantage over people born in Australia.

“However, overall wage rates do not differ substantially between migrants and non-migrants working in the same skill categories, although migrant degree holders are paid somewhat less than their Australian born equivalents.

“We found that, on average, migrants have been more productive than non-migrants – as measured by earnings. They have also increased their productivity more rapidly than non-migrants,” said Mrs Regan.

The researchers – Dean Parham, Dr Hang To, Dr Nazmun Ratna, Professor Quentin Grafton and Sue Regan - also found that migrants coming from English-speaking countries earn more.

“Migrants born in English-speaking countries and migrants born in OECD countries are more productive – measured by the hourly wage rate – than non-migrants, migrants born in non-English speaking countries and migrants born in non-OECD countries,” said Mrs Regan.

English language proficiency and the level and type of education are important factors in labour market performance of migrants, she explained.

“Both English proficiency and having a university education increase productivity, as measured by earnings, as well the probability of paid employment.”

Download a copy of the full report: Migration and productivity in Australia.

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Updated:  14 December 2019/Responsible Officer:  Crawford Engagement/Page Contact:  CAP Web Team