The contribution of migration to the Australian labour market

State of Australia’s Skills 2021: now and into the future

The contribution of migration to the Australian labour market

Skilled migrants make a significant contribution to the Australian economy and supplement the supply of skilled workers available to businesses and industries. Skilled migrants tend to have high participation rates in the workforce. This means skilled migrants help stimulate economic growth and jobs growth 32.

Research and analysis has found that there are economic benefits from skilled migration arising from the transfer of skills to the resident Australian population. The importation of global talent may facilitate the adoption of new technologies, raise productivity and increase income per capita 33.

The closure of Australia’s international borders in March 2020 in response to the COVID-19 pandemic is therefore likely to have both short-term and longer-term impacts on the workforce and the economy.

Contribution of permanent skilled migration to the labour market

In recent years, the permanent migration program has been set at 160,000 places with about two thirds of the intake in the skill stream, which is designed to improve the productive capacity of the economy and fill skill shortages in the labour market 34. This focus is consistent with data from the Continuous Survey of Australia’s Migrants (CSAM) which shows positive employment outcomes for primary skill stream visa holders and, by extension, positive contributions to the Australian economy. Primary skill stream visa holders must satisfy specified qualification, work experience, English proficiency and age criteria. Secondary visa holders are accompanying dependents such as spouses and children 35.

The most recent CSAM survey found that the employment outcomes for primary skill stream visa holders were strong at the six-month and 18-month stages of settlement. These findings have been consistent across all CSAM surveys (2013 to 2018). Recent CSAM surveys have found that:

  • In aggregate terms, skilled migrants performed better than the resident population of both Australian-born workers and migrants, in terms of employment and participation rates.
  • Employer-sponsored primary skilled permanent migrants reported high rates of employment (93.7%), participation (95.6%) and above average wages.
  • Onshore independent primary skill stream migrants – those in Australia at the time of visa application – also reported high rates of employment (93.5%) and participation rates (97.4%).

Contribution of temporary skilled migration to the labour market

The employer-sponsored Temporary Skill Shortage (TSS) visa program supplements the skilled workforce needs of Australian businesses. Analysis of ABS Labour force data and Department of Home Affairs visa data shows that the longer-term national average reliance on temporary skilled migrants of 1.0% has been declining since the implementation of the April 2017 skilled visa reforms. This figure refers to the stock of primary visa holders as a percentage of the employed workforce.

Temporary visa holders are a major source of permanent skill stream migrants, accounting for some 80% of primary visas granted in 2019-20. This compares with an average of 65% for the preceding five years 36.

The reduced intake of TSS and other temporary work visa holders following the closure of Australia’s international borders in response to the COVID-19 pandemic is therefore likely to have longer-term impacts on both the skilled workforce and the population.

Temporary work visas

The NSC analyses the labour market impact of temporary visa holders in Australia with a full or partial work right. These visa holders include temporary workers such as working holiday makers (often referred to as backpackers), international students, temporary graduates, New Zealand citizens and other temporary residents. Before the onset of COVID-19, the total number of temporary visa holders in Australia under these largely uncapped visa programs was often around or over 2 million.

The closure of Australia’s international borders in March 2020 in response to the COVID-19 pandemic has resulted in a significant fall in temporary visa entrants. There were just over 1.5 million temporary visa holders with a work right in Australia at 31 December 2020, and the number fell to just over 1.3 million at 31 March 2021.

Contribution of skilled migration programs to the workforce needs of Australian business and industry

In 2018-19, before the COVID-19 pandemic, 42,100 employer-sponsored primary TSS visas were granted to directly meet the needs of Australian businesses. This fell to 28,400 visa grants in 2019-20 and to 11,200 visa grants for the six months to 31 December 2020.

Table 13 shows the top 15 occupations for primary visa grants under the TSS visa program for the five years to 2019-20.

Table 13: Top 15 occupations for employer-sponsored primary Temporary Skill Shortage via grants, five years to 2019-20

 

Occupation

(%)

1

Developer Programmer

4.5

2

ICT Business Analyst

3.9

3

Cook

3.9

4

Software Engineer

3.7

5

Resident Medical Officer

2.9

6

Chef

2.9

7

Cafe or Restaurant Manager

2.8

8

University Lecturer

2.7

9

Management Consultant

2.6

10

General Practitioner

2.3

11

Marketing Specialist

2.3

12

Analyst Programmer

1.9

13

Accountant (General)

1.9

14

Sales and Marketing Manager

1.6

15

Recruitment Consultant

1.5

Source: Department of Home Affairs, Temporary Work visas granted, BP0014, five years to 2019-20

In 2018-19, before the COVID-19 pandemic, the permanent skill stream contributed 49,100 primary visa grants, of which 20,200 were in the employer-sponsored categories that directly meet the needs of Australian businesses. This fell to 41,900 visa grants in 2019-20, of which 17,400 were in the employer-sponsored visa categories. Table 14 shows the top 15 occupations for permanent primary skill stream visa grants for the five years to 2019-20.

Table 14: Top 15 occupations for permanent primary skill stream visa grants, five years to 2019–20

 

Occupation

(%)

1

Accountant (General)

7.0

2

Software Engineer

5.9

3

Cook

3.8

4

Registered Nurses nec

3.8

5

Developer Programmer

2.8

6

ICT Business Analyst

2.4

7

Computer Network and Systems Engineer

2.3

8

Cafe or Restaurant Manager

2.3

9

Civil Engineer

2.1

10

Mechanical Engineer

2.0

11

Chef

1.8

12

Marketing Specialist

1.6

13

Analyst Programmer

1.5

14

Engineering Technologist

1.4

15

External Auditor

1.4

Source: Department of Home Affairs, Australian migration statistics, combined occupation tables, five years to 2019-20

Note: Permanent primary visa grants include data for subclass 186 Employer Nomination Scheme, subclass 187 Regional Sponsored Migration Scheme, subclass 189 Skilled Independent, subclass 489 Skilled Regional (Provisional), subclass 491 Skilled Work Regional (Provisional) and subclass 494 Skilled Employer Sponsored Regional (Provisional) visas.

Broader labour market impact of migrants and temporary visa holders

ABS data suggest that some industries are more likely than others to be affected by the closure of Australia’s international borders in response to the COVID-19 pandemic. For example, the ABS’s November 2019 Characteristics of recent migrants survey data show that industries such as health care and social assistance, accommodation and food services, and professional, scientific and technical services are more likely to be impacted 37. Figure 38 shows that these three industries make up just over a quarter of those that migrants reported they worked in.

Figure 38: 10 main migrant employing industries

This table lists the top 15 occupations for Migrants and Temporary Residents responding to the Characteristics of Recent Migrants Survey, entering Australia in the 10 years to November 2019
Source: ABS, Characteristics of recent migrants, November 2019

Note: ‘Not a recent migrant or temporary resident’ includes Australian born, long-term Australian citizens and permanent residents (who arrived before 2010) and New Zealand citizens who are long term residents of Australia. ‘Recent migrants or temporary residents’ includes recently arrived Australian citizens and permanent residents (who arrived in the 10 years to 2019) and temporary visa holders.

The percentages on the Y-axis are the percentage of each of the two categories across the industries (so that, if all industries were included in the figure, each series would sum to 100 per cent).

The Characteristics of recent migrants survey (CORMS) includes permanent and temporary residents who are not granted visas on the basis of their skills or human capital. This survey has a different occupational profile from that of the temporary and permanent skilled visa programs. Table 15 shows the CORMS survey ranking of the top 15 occupations for recent migrants, defined as those entering Australia in the 10 years to November 2019.

Table 15: Top 15 occupations for migrants and temporary residents entering Australia in the 10 years to November 2019

 

Occupation

(%)

1

Commercial Cleaners

2.5

2

Registered Nurses

2.4

3

Software and Applications Programmers

2.2

4

Sales Assistants (General)

2.1

5

Chefs

1.9

6

Aged and Disabled Carers

1.9

7

Kitchenhands

1.7

8

Child Carers

1.3

9

Packers*

1.2

10

Waiters*

1.1

11

Delivery Drivers*

1.1

12

Nursing Support and Personal Care Workers

1.1

13

Checkout Operators and Office Cashiers

1.0

14

Building and Plumbing Labourers

1.0

15

Accountants

1.0

Source: ABS, Characteristics of recent migrants, November 2019

Note: * Data for these occupation groups should be treated with caution as there is a relative standard error of more than 25%. The ABS Characteristics of recent migrants survey defines migrants as people who came to Australia in the 10 years to November 2019 on permanent visas, including those who had become Australian citizens since arrival, and temporary visa holders with the intention to stay for one year or more.

Footnotes

32

Productivity Commission, Economic impacts of migration and population growth, 2006.

33

Productivity Commission, Migrant intake into Australia, 2016.

34

The Migration Program, for permanent migrants, comprises three key streams: skill, family, special eligibility and child. The planning levels for these streams are set by government as part of the annual Budget process. The planning level for the permanent Migration Program was set at 190,000 places for 2012-13 to 2018-19, and at 160,000 places for 2019-20 and 2020-21. The Migration Program was delivered at well below the planning level in 2017-18 (162,417 persons), 2018-19 (160,323 persons) and 2019-20 (140,366 persons – COVID-19 may have affected the June 2020 quarter).

35

Department of Home Affairs, Continuous survey of Australia’s migrants, 2018.

36

Department of Home Affairs, 2019–20 Migration program report, Table 1.2 skill stream outcome by location, applicant type and gender, 2010–11 to 2019–20, 2020.

37

Australian Bureau of Statistics (ABS) Characteristics of recent migrants survey, 2019.