Review: “The Two-Step Australian Immigration Policy and its Impact on Immigrant Employment Outcomes”

Bob Gregory has a new(ish) paper titled, “The Two-Step Australian Immigration Policy and its Impact on Immigrant Employment Outcomes“.

ANU economics professor and former RBA board member, it’s good to see Gregory writing on immigration. His writing is to the point and easy to understand.

He also knows what to highlight in an increasingly complex field of how migrants integrate into the labour market:

“Under these circumstances, to assess policy change effects, and to measure recent immigration inflow contributions to the Australian economy, it is essential to include all new immigrants in the analysis, and not only new permanent settlers.” (p.4)

Reading this might seem like a given. Of course you should include all immigrants in analysis. But this typically isn’t the case. Gregory outlines how the traditional model of analysing migrants in the labour markets relies heavily on permanent visa holders instead of incorporating temporary and permanent visa holders. In Australia, this traditional model will provide only a limited analysis as about half of all permanent visas are now granted to people who already hold temporary visas. This means they are already working or studying, meaning changing visas is simply an administrative task and doesn’t have the same impact on labour markets as it once did.

This has important consequences. Much economic and social policy analysis in Australia is based, at least in part, on the HILDA survey. Yet this survey is near worthless for contemporary analysis of migrants because of the issues identified by Gregory. The (necessary in this case) exclusion of temporary migrants means we cannot draw conclusions about wages, employment or any other labour market factors from this survey. Writing and researching about immigration policy in Australia is difficult because of the lack of quality data.

If this is true for analysing the effects of policy change, it also holds true for media analysis. Each year we get blown away by the number of new permanent visas made available in the budget or a populist campaign about migrant numbers. How many migrants are arriving!? people ask in disbelief. Yet these figures do not represent what they once did. There are quarterly contributions from the ABS and DIBP on how many people are actually arriving and departing Australia, but these are mostly overlooked in favour of snapshots in time of the number of visas.

Gregory’s main finding is that non-English speaking migrants now are introduced to the labour market via part-time employment. This is a large change. In the 1980s and 1990s, the introduction was via unemployment. This effect is comes from non-English international students and comes with the important caveat of long periods spent out of full-time employment because of education commitments. Interestingly, as students are overwhelmingly non-English speaking, this has not changed the labour market integration of English speaking arrivals, which is similar to the 1980s.

This point is worth re-iterating as it has a heavy impact in the labour market, but also amongst Australian attitudes towards non-English speaking migrants. Think about cultural comments of not being able to find an “Australian” taxi driver or staff members at 7/11. These semi-skilled employment positions are also highly visible in the service sector and shape how people think about immigrants, work and social integration. We need to remind ourselves this is only a specific point in the cycle of an individual’s labour market journey. It is unlikely a 20 year old Indian international student will be working at the corner store in five years time.

Gregory’s conclusions:

“The labour market implications of large numbers of legal temporary immigrants with work entitlements, but no permanent status, needs to be moved closer to centre stage.”

“More information on temporary migrants and the temporary visa experience of those receiving permanent visas is needed.”

And lastly he highlights the disjuncture between an uncapped temporary migrant framework and a (potential) government decision to limited number of permanent visas.

Hear, hear.

(This is what I hope will be the first of a weekly post profiling recent academic contributions to immigration research in Australia. If you have an article suggestion, please let me know.)


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