International migration and employment growth in Australia, 2011–2016
Background: Immigration to Australia pre 1995 was largely low skilled. Recessions led to competition between low-skilled domestic workers and new immigrants and subsequent cuts in migration intakes. Historical changes in birth rates, increased participation in tertiary education, increasing numbers retiring and the relatively rapid restructuring of the skill level of labour demand combined to produce a skilled labour supply crisis in Australia from the mid-1990s. The permanent and temporary skilled migration policies established by the Australian Government from 1995 played an important role in meeting that labour demand, especially in the boom years of the first decade of the 21st century.
Aims: This paper examines the impact of immigration on employment in Australia subsequent to the global financial crisis (GFC) for the five-year period from July 2011 to July 2016.
Data and methods: Data for the paper are sourced from the Australian Bureau of Statistics. The paper uses survival methods to decompose the growth in employment in Australia in the five-year period from 2011 to 2016: (1) change in age and sex distribution in the absence of migration; (2) changes in employment participation rates by age and sex; (3) net migration by age and sex.
Results: Immigration in response to strong labour demand has continued post GFC. From July 2011 to July 2016, employment in Australia increased by 738,800. Immigrants accounted for 613,400 of the total increase, population growth 98,900 and changes in employment participation only 26,500. Migration has had a very large effect on the age structure of employment with most new immigrant workers (595,300) being under 55 years.
Conclusions: Research indicates that immigration provides major benefits to the Australian economy. However, as strong labour demand is likely to sustain migration at relatively high levels in coming years, it is incumbent upon governments to plan for the effects of rapid population growth on infrastructure and resources.