Longitudinal Analysis of Employment Outcomes for Vulnerable and Other Migrants

Description and objectives of the research

Migration continues to play a key role in shaping Australia’s demographic, social and economic fabric. In June 2005, 24% of the Australian population were born outside Australia, a proportion that grows slowly each year given positive net migration accounts for almost half of overall population growth annually (Kostenko et al., 2009). Economic benefits to Australia from migration include increased labour supply and improved skills levels in the working age population, both vital in the context of ageing populations and skills shortages, with a recent Productivity Commission report (Productivity Commission, 2006) concluding that immigrants not only boost headline Australian GDP, but also make a net positive contribution to per capita Australian GDP, and increasingly so as the proportion of Skill Stream migrants grows over time.

Existing evidence on labour market outcomes for immigrants themselves, however, suggests a more mixed picture. On the one hand, immigrants earned more per hour worked than Australian-born workers in 2001, even after controlling for compositional differences. On the other hand, immigrants had a lower participation rate, a lower employment rate and a higher unemployment rate than Australian natives, again even after controlling for compositional differences (Productivity Commission, 2006). The participation, employment and unemployment gaps are larger in the early years following arrival in Australia, and they shrink as immigrants assimilate more fully into the labour market over time. For example, migrants that have been in Australia for 15 or more years actually have higher participation rates than natives, other things being equal (Productivity Commission, 2006).

Critically, however, these averages hide a wide range of experiences for immigrants from different backgrounds, with different characteristics and with different classes of Visa. Immigrants differ in terms of gender, age, level of education, field of qualification, country of origin, English language proficiency, work experience, wealth and geographical region of initial settlement (Productivity Commission, 2006), all of which are likely to influence labour market outcomes. In particular, English language proficiency stands out as a key determinant of labour market success (e.g. Wilkins, 2007). Visa class is also a strong predictor of labour market success, with immigrants entering Australia under skilled visa categories having higher participation and lower unemployment rates than their counterparts entering under family and humanitarian visas, even after controlling for compositional differences in education levels, English language proficiency and other characteristics (e.g. Cobb-Clark, 2003).

This project will use longitudinal HILDA Survey data to examine employment and occupation outcomes for immigrants to Australia over the most recent decade. A focus on employment reflects earlier evidence that it is in employment prospects, rather than wages, where the main ‘migrant penalty’ exists in Australia (e.g. Antecol et al., 2006). Other research indicates that employed migrants experience downward mobility in their occupational status (Chiswick et al. 2005). In addition to comparing employment and occupation outcomes for migrants and natives at different durations since arrival in Australia, the project will also examine differences in outcomes for migrants with different characteristics (e.g. education level, age, gender, English language proficiency), with different countries of origin and different arrival times (to represent refugee status) and who arrived in different labour market contexts (e.g. the unemployment rate and the direction of change in the unemployment rate at the time of arrival). In doing so the project will help to identify those migrants most vulnerable to poor labour market outcomes, informing efforts to target support services and other policy interventions where they are most needed.

Contact: the Melbourne Institute contact for this project is Dr Barbara Hanel.

Progress

This project commenced in June 2011 with the final report submitted to the Department of Education, Employment and Workplace Relations in December 2011.