Designing points-tested visas for Australia using Mincer regression models

This paper investigates how Australian points tested visas can be changed to better target young, high-earning migrants. Our approach uses earnings premia from Mincer regressions with the demographic trade-off from the Australian Treasury’s Fiscal Impact of New Australians (FIONA) model. We find that several existing points-test components—community language, regional study, Professional Year programs and specialist qualifications—are not predictive of migrant earnings and should be removed, while greater weight should be placed on younger applicants and PhD-level education. We show that including points for nominated income or income earned while on a temporary visa would yield the largest economic gains. Extending the framework to migrant couples shows that primary-applicant characteristics alone predict household earnings almost as well as including secondary-applicant information, implying limited value from adding secondary characteristics to the test.ins but require broader system reform and careful consideration of behavioural responses.