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Fact sheet 14 - migrant labour market outcomes

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The purpose of Australia's Skilled Migration Programme is to deliver workers with the skills Australia needs. To get the maximum economic benefit from this programme 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 commissions surveys to assess the labour market performance of Australia's recently arrived migrants. The most recent of these is the Continuous Survey of Australia's Migrants (CSAM).

The CSAM is designed to provide timely information on the labour market outcomes of recent migrants from the family stream and skill stream. In its first iteration, the CSAM surveyed a cohort of migrants on two occasions, six months apart, with a new cohort of migrants introduced to the survey every six months. The first survey was conducted in September 2009 and the final survey in September 2011. The next iteration of the CSAM commenced in late 2013. To increase the longitudinal aspect of the survey the duration between the introductory survey and the follow-up survey has been increased from six to twelve months.

One of the major benefits of the CSAM is that it allows for an analysis of different migrant categories. For example, the labour market outcomes of skilled independent migrants can be compared with those of other skilled migrants or with the general population. This makes the CSAM a valuable tool for evaluating migration policies and programmes. Currently available on the department's website is the first CSAM report published in late 2010 and a combined report—across all five completed cohorts—published in February 2013.

Employment outcomes for skilled (Primary Applicant) migrants

Using data from the CSAM it is possible to see how newly arrived skilled migrants fare in the Australian labour market and how their outcomes changed with six months additional time in Australia. For those skilled migrants who participated in both the introductory survey and the follow-up survey, the unemployment rate at the time of the introductory survey was 5 per cent. This is below the average 5.2 per cent rate of unemployment for the general population over the survey reference period. Six months later, at the time of the follow-up survey the unemployment rate of skilled migrants fell to 2 per cent (Table 1).

Labour force participation rates were also well above that of the general population. At the time of the introductory survey and follow-up survey the participation rate of skilled migrants was 96 per cent. This is 29 points higher than the 67 per cent participation rate for the general population—averaged over the survey period of September 2009 to September 2011.

Table 1: Employment outcomes for skilled primary applicants by category

Visa Reporting Category Participation rate at six months Unemployment rate at six months Participation rate at 12 months Unemployment rate at 12 months Participation rate Change Unemployment rate Change
Employer Sponsored

98

0.5

99

0.5

1

0

Family/State Sponsored

98

7

97

4

-1

-3

Offshore Independent

97

10

96

3

-1

-7

Onshore Independent

98

6

97

3

-1

-3

Skilled Graduates

98

3

96

2

-2

-1

Other Skilled

86

7

90

3

4

-4

All Skilled

96

5

96

2

0

-3


Note: Cohort 5 did not undertake the follow-up survey and do not contribute to the 'at 12 months' portion of this table.

How partners fare

As they are not selected on the basis of skills, it would be expected that migrants coming to Australia through the family stream would not fare as well in the labour market as skilled migrants. Findings from the CSAM confirms that this is the case.

At the time of the introductory survey, one in five migrants coming to Australia on a partner visa was unemployed. Six months later around half of those who were unemployed had subsequently found employment, but a quarter had stopped looking for work altogether.

Factors affecting the labour market outcomes of migrants

Skill Level

As shown earlier, 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.

Prime working age

As Table 1 demonstrates, migrants—in particular skilled migrants—have labour force participation rates that are well above the national average. One of the main reasons for this is the age profile of these recent migrants. In 2010–11, 38.1 per cent of people counted in Net Overseas Migration (NOM) were of prime working age—between 25 to 44 years of age. Only 0.3 per cent were aged over 64 years (Figure 1). By comparison, among the Australian-born population only 26.7 per cent are in their prime working years and 12.1 per cent are aged 65 years and over.

Figure 1: Age distribution of recent migrants and Australia's resident population

Age distribution chart

Source data: Demographic Statistics (3101.0) and Migration, Australia (3412.0)

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 at the six and 12 month settlement stage with their self-assessed English language ability.

Table 2: Unemployment rate by English proficiency and time since arrival – all CSAM primary applicants


English Proficiency Unemployment rate six months since arrival/visa grant Unemployment rate 12 months since arrival/visa grant Unemployment rate Change
Best or only language/Very Well 8.5% 5.0% -3.5%
Well 15.2% 8.8% -6.3%
Not at all 35.9% 12% -15.9%

Source data: CSAM cohorts 1 to 4 introductory survey and follow-up survey.

Period of residence

Another important factor influencing the labour market status of migrants is their period of residence in Australia.

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 becomes comparable with that of the general population (Figure 2).

Figure 2: Unemployment rate by year of arrival

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 economic 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 the increase in national unemployment during the global economic crisis.

However, Figure 2 also shows that new migrants do 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, 24a, 26 and 27.

Information on family migration can be found in the family stream fact sheets 29-39.

Further information about the labour market outcomes of migrants is available in the Australia’s Migration Trends publication on the department's website.

Fact sheet 14, produced by the National Communications Branch, Department of Immigration and Border Protection.
Last Reviewed April 2014.