Fact Sheet 14 - Migrant Labour Market Outcomes
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The purpose of Australia's Skilled Migration Program is to deliver workers with the skills Australia needs. To get the maximum economic benefit from this program it is important that skilled migrants are successful in the labour market-enjoying a high rate of labour force participation, a low rate of unemployment and a high propensity for skilled employment.
Surveys to analyse migrant labour market outcomes
The department has commissioned surveys to assess the labour market performance of Australia's recently arrived migrants. The most notable are the Longitudinal Survey of Immigrants to Australia (LSIA) and the Continuous Survey of Australia's Migrants (CSAM).
- The LSIA - there have been three LSIA surveys conducted on three different cohorts of migrants. The first cohort (LSIA1) arrived in Australia between September 1993 and August 1995 and was interviewed three times. The second cohort (LSIA2) arrived between September 1999 and August 2000, and was interviewed twice. The third cohort comprised offshore migrants who arrived between December 2004 and March 2005 and onshore migrants who were granted their visa between December 2004 and March 2005. This cohort was surveyed twice.
- The CSAM - the first CSAM survey was conducted in September 2009 and is designed to provide timely information on the labour market outcomes of recent migrants from the Family and Skill streams. Migrants are surveyed on two occasions six months apart and a new cohort of migrants is introduced to the survey every six months. Unlike the LSIA, which is a series of separate surveys about five years apart, this survey is conducted on an ongoing basis, with results on migrant labour market performance delivered every six months.
A major benefit of both surveys is that they enable analysis of different migrant categories.
Example: the labour market outcomes of skilled independent migrants can be compared with those of other skilled migrants or the general population. This makes the surveys a valuable tool for evaluating migration policies and programs.
Labour market outcomes of recent migrants
The discussion on labour market outcomes is based on the most recent of the department's longitudinal surveys, LSIA3. The first results from the CSAM are expected to be published in late 2010 on the department's website.
See: Continuous Survey of Australia's Migrants
LSIA3 compared with LSIA2
LSIA3 migrants (arriving in Australia between December 2004 and March 2005) had significantly better labour market outcomes than those from LSIA2 (September 1999 and August 2000).
Example: After 18 months the overall unemployment rate of LSIA3 Family and Skill Stream migrants was 4 per cent. This was less than half the 10 per cent unemployment rate for LSIA2 migrants at the same stage of settlement and exceeds the fall in the national unemployment rate from 6.8 per cent to 4.8 per between the time of LSIA2 and LSIA3.
LSIA3 migrants also had a higher participation rate than LSIA2 migrants.
Example: After 18 months, 80 per cent of LSIA3 migrants were participating in the labour market compared with 74 per cent in LSIA2.
Results from LSIA3 also supported other analysis that shows the ability of migrants to find work quickly hinged on four main factors - their level of skill, English language proficiency, age and period of residence in Australia.
Participation rates for different migrant categories
Analysis of LSIA data shows participation rates vary according to migration category. Table 1 below summarises by category the participation rates of LSIA3 migrants six and 18 months after arrival.
| Table 1 - LSIA3 participation rates - principal applicants | ||
|---|---|---|
| Migration categories | Time since arrival/grant of visa | |
| Six months | 18 months | |
| Business skills/ENS/RSMS | 97% | 96% |
| Concessional Family/SAL | 86% | 88% |
| Former Overseas Student | 93% | 95% |
| Offshore Independent | 92% | 93% |
| Family | 75% | 70% |
Notes:
ENS – Employer Nomination Scheme
RSMS – Regional Sponsored Migration Scheme
SAL – Skilled Australian Linked
At the time of LSIA3 the national labour force participation rate was 65 per cent. Table 1 demonstrates that migrants - in particular skilled migrants - have participation rates that are above the national average. One of the main reasons for this is the age profile of these recent migrants. For the five year period between the beginning of 2004 and the end of 2008, 95 per cent of migrants were aged under 45 years and 41 per cent were in the 25-44 year 'prime working years' range. By comparison only 62 per cent of the Australian population was under 45 and just 28 per cent were of prime working age (Figure 1).
Figure 1: Age distribution of recent migrants and Australia's resident population
Source data: ABS Population by Age and Sex (3201.0) and Migration (3412.0)
Unemployment rates for different migrant categories
Table 2 summarises the unemployment rate of LSIA3 migrants by category six and 18 months after arrival in Australia.
| Table 2 -LSIA3 Unemployment rates - principal applicants | ||
|---|---|---|
| Migration categories | Time since arrival/grant of visa | |
| Six months | 18 months | |
| Business skills/ENS/RSMS | 3% | 1% |
| Concessional Family/SAL | 16% | 4% |
| Former Overseas Student | 9% | 3% |
| Offshore Independent | 11% | 2% |
| Family | 20% | 6% |
Notes:
ENS – Employer Nomination Scheme
RSMS – Regional Sponsored Migration Scheme
SAL – Skilled Australian Linked
As can be seen, the unemployment rates of Skill Stream migrants improved markedly between the six month and 18 month stage of settlement. By the 18 month stage, the unemployment rate of all Skill Stream categories was below the 4.8 per cent national unemployment rate.
Factors affecting the labour market outcomes of migrants
Skill level
Skilled migrants are more likely to be employed than other migrants. They are also more likely to be in full-time work and enjoy higher incomes on average.
One factor contributing to these positive outcomes is Australia's Skilled Occupation List (SOL). In order to qualify for General Skilled Migration an applicant needs to have an occupation on this list.
In 2010 the SOL was extensively revised based on the advice of the independent body Skills Australia with many occupations removed so that it better reflected the skill needs of Australian employers. The list now comprises 183 valued occupations across professional, management and technical fields. An expected consequence of this more targeted list is continuing improvement in the labour market performance of skilled migrants.
English language proficiency
English language skills play a vital role in a migrant's search for work - the better the level of English, the greater the likelihood of finding work. This is demonstrated in the table below which matches the employment status of migrants six and 18 months after arrival with their self-assessed English language ability.
| Table 3 - LSIA3 English proficiency and unemployment | ||
|---|---|---|
| English speaking ability | Time since arrival/grant of visa | |
| Six months | 18 months | |
| English first language | 8% | 2% |
| Very well | 11% | 3% |
| Well | 20% | 6% |
| Not well | 35% | 12% |
| Not at all | 46% | 12% |
Age
As with all job seekers, age is an important determinant in obtaining employment.
For example, LSIA3 data shows 18 months after arrival/grant of visa, migrants aged 45 years and over had an unemployment rate of 9 per cent. In comparison, the unemployment rates for 26-35 year olds, 36-45 year olds and those aged 25 or under were 3 per cent, 5 per cent and 6 per cent respectively.
Period of residence
Another important factor influencing the labour market status of migrants is their period of residence.
As a general rule, migrant unemployment rates can initially be very high - up to 25 per cent early in the settlement period - it may then take around four to five years before migrant unemployment compares with that of the general population (Figure 2).
Figure 2: Unemployment rate by year of arrival
Source data: ABS Labour Force (6291.0)
These initially high rates of unemployment partly reflect the difficulties experienced by all new entrants to a labour market, including school leavers. In comparison to the general population, recent migrants also appear to be more affected by adverse conditions. For example, they were more affected by the mild economic downturn that occurred following the introduction of the Goods and Services Tax in 2000 and appear to have been more affected by the increase in national unemployment during the global economic crisis.
Nonetheless, Figure 2 does show that new migrants do eventually adjust to the Australian labour market and go on to make a substantial contribution to the workforce.
More information
Additional information on Skilled Migration can be found in Fact Sheets 24, 25, 26 and 27.
Information on Family Migration can be found in the Family Stream Fact Sheets 29-30.
See: Fact Sheet Index
Further information is available on the department's website.
See: www.immi.gov.au
The department also operates a national general enquiries line.
Telephone: 131 881
Hours of operation: Monday to Friday from 8.30 am to 4.30 pm. Recorded information is available outside these hours.
Fact Sheet 14, produced by the National Communications Branch, Department of Immigration and Citizenship.
Last Reviewed October 2010.
© Commonwealth of Australia 2009.