Effect of Immigration on Australian Labour Market Outcomes

This paper examines the impact of immigration on the employment of Australian workforce. It analyzes the trend of overseas arrivals for employment purpose and unemployment rate of Australian workers over the time frame 2015 to 2018.

Effect of immigration to Australia and the Labour Market outcomes of Australian workers
PROFESSIONAL PROJECT
(BUSN20019)
Effect of immigration to Australia and the Labour Market outcomes of Australian
workers
Submitted to
CENTRAL QUEENSLAND UNIVERSITY, SYDNEY CAMPUS
By
ABHISHEK KUMAR (12069628)
[SYDNEY CAMPUS]
TERM 3
1

Effect of immigration to Australia and the Labour Market outcomes of Australian workers
Table of Contents
Introduction..........................................................................................................................................2
Research Aims/Objectives.....................................................................................................................3
Research Questions...............................................................................................................................3
Literature Review..................................................................................................................................4
Research Methodology.........................................................................................................................6
Research Justification: Bridging the Research Gap................................................................................6
Data resources used for the study:.......................................................................................................7
Data analysis approach:........................................................................................................................7
Quality and coherence of Project..........................................................................................................8
Results and Findings..............................................................................................................................8
Discussion over the findings of the research.........................................................................................8
Conclusion...........................................................................................................................................10
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Effect of immigration to Australia and the Labour Market outcomes of Australian workers
Introduction
Traditionally, migrant labours or skill workers have been an efficient strategic alternative to fulfil
the skill and human resource demands of a nation. But such an act usually creates a competition
between the existing local professionals (labours) and the immigrant workers. Hence it becomes
important for a country to effectively structure and manage its work immigration practices. As in
the case of Australia, the country has not been able to employ efficient immigration practices
(Abelson & Dalton, 2018).
The effect of immigrations on Australians, especially on their wages and their work prospects, is
an inquiry that can incite warmed and enthusiastic discussion. Tale and instinctive impressions
can without much of a stretch command either side of people in general discussion. In this paper,
the researcher assesses carefully at the information to check whether it can observe an impact of
migration on unemployment rate of Australian workers. The aims at outcomes for two groups:
those conceived in Australia (locals) and locals and past foreigners (officeholders). A standard
focused labour market model proposes that movement ought to positively affect unemployment
rate of Australian workers. A deluge of migrants moves the supply bend to one side,
discouraging business status of Australian specialists. This basic hypothetical model,
notwithstanding, may neglect to catch an assortment of other economic phenomena that may
counterbalance the negative employment rate impact.
Research Aims/Objectives
This paper examines the impact of the immigration on the employment of Australian workforce.
Research Questions
RQ1: Does the arrival of immigrants to Australia increases the unemployment rate of Australian
workers?
RQ2: What are the essential measures to be taken to provide strength to the employment
prospect and the economy of Australia?
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Effect of immigration to Australia and the Labour Market outcomes of Australian workers
Literature Review
The impact of the immigration is not only confined to the financial aspect rather it flows into
multiple dimensions that are essential for the success of a nation. It has the capability to
positively impact the labour employment and participation practices, the skill level of the
community as well as the national level wage structure, hence the importance of the same cannot
be neglected. Generally the immigration trend changes within a country are the reflections of
changes in legislature and policy structure of the country with respect to their immigration laws.
Additionally factors like existing professional workforce base and the actual demand of the
skilled labour also have a significant impact on the immigration trend for the country.
During the 1990s decade majority of the workforce in the Australian work workforce pool
included immigrant skilled labour. Approx. 26 percent of total workforce include skilled labour
or working immigrants from the European countries. Although the trend changed and Asian
labour took over as the major contributor or skilled workforce within the Australian workforce
pool but the overall reliance over the migrant employees was still intact. The trend and
employment rate throughout that decade were encouraging and were considered as one of the
core reason behind financial productivity of the nation. But evidently, the current rate of
employment for migrants in Australia is highly discouraging. Migrants from across the globe are
facing it difficult to find a job or make a living in the Australian Region. According to Gewin,
(2012), the migrant workforce from Middle Eastern countries like North Africa are facing more
difficulties as compared to professionals and skilled labours from other parts of the globe. On an
average, the migrants from North Africa are 3 times more subjected to loose work in the first 5
years of their migration itself. Similarly for European or Asian labours, the current
unemployment rate of 35% is approximately six times the national average.
Different experts have provided different opinions contributing to this current situation. Islamic
Migration Specialists have argued that the situation is more critical for job seekers who have
“Mohammed” attached with their names or for the women wearing Hijab. (Hava & Erturgut,
2010). Similarly different communities have different statistical figures related to their
unemployment rates. According to the Report presented by ABS (Australian Bureau of
Statistics) the Southeast Asian immigrants have an unemployment rate of 3.6%, and for Southern
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Effect of immigration to Australia and the Labour Market outcomes of Australian workers
Europe and Eastern Europe the same was observed to be 1.9% (KARANASSOU & SALA,
2009). On the contrary, Australian National University economist Bob Gregory highlighted the
lack of language proficiency as the key reason behind these increased and alarming rates of
unemployment. According to the expert, English language skills are "important" to find a job and
majority of these immigrants lack the same. Hence, highlighting that the demographical factors
are not the real reasons behind the current issue. Irrespective of the reasons the decreased level of
immigration has resulted in reduction in the overall productivity levels for the nation. This
change in trend and differentiating believes have created a complex structure and prompted the
researchers to critically study this domain. According to different researchers, changing
demographics, possible changes in skill requirements or legal policies etc. can be the possible
reasons behind this changing trend. In order to back the presented outcome or opinion, it is
important that suitable studies and analysis of the situation needs to be conducted.
Immigration is likely to be viewed as being successful, by both immigrants themselves and the
Australia-born, if foreigners are fruitful in the work showcase. The workplace can help acquaint
an as of late arrived migrant with the methods for the Australian people group and also giving
the cash required to set up another home. In the event that outsiders can't get work after they
have arrived they may must be upheld by the standardized savings framework. The proof from
Australian examinations is that the monetary and social advantages of movement are most
noteworthy when every one of the aptitudes and gifts of migrants are being utilized completely.
A great many people would pass judgment on work advertise accomplishment as having an
occupation. Be that as it may, having a vocation may not be a decent marker of accomplishment
if migrants are not completely utilizing their aptitudes and capacities (for instance, an abroad
prepared specialist functioning as a doctor's facility precise). Making a decision about whether
migrants have been fruitful or not requires an examination of different elements like profit and
word related status.
Research Methodology
Research Justification: Bridging the Research Gap
There exist a significant gap between the existing literature related to the relationship between
immigration and employment prospect in Australia. This research has tried to bridge that gap by
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Effect of immigration to Australia and the Labour Market outcomes of Australian workers
showing extensive focus over the following elements or providing the following listed
advantages:
The following are the benefits of organizing this research:
 A trend analysis of overseas arrivals in Australia for employment purpose and
unemployment rate of Australian workers over the time frame 2015 to 2018. (Bardsen,
Hurn & McHugh, 2010).
 The study has considered monthly data from July 2015 to May 2018 and have gathered
from ABS stats and data.gov.au websites.
 A correlation and regression study has been performed to understand the association
between overseas arrivals and unemployment rate of Australian work force over the
specified time frame.
Data resources used for the study:
The research has used data gathered from below sources:
For Overseas arrival Data [employment purpose]
2015-16 Data: https://data.gov.au/dataset/overseas-arrivals-and-departures/resource/2e5bf94b-
0dd5-42e0-8257-c48e31b28cf3
2016-17 Data: https://data.gov.au/dataset/overseas-arrivals-and-departures/resource/968a84fb-
e4f4-4c0b-8359-e60adb8329d5
2017-18 Data: https://data.gov.au/dataset/overseas-arrivals-and-departures/resource/1d021cbb-
47f2-4be3-b7d7-3268b200faac
Unemployment data:
http://abs.gov.au/AUSSTATS/abs@.nsf/DetailsPage/6291.0.55.001Oct%202018?
OpenDocument
Data analysis approach:
Quantitative study:
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Effect of immigration to Australia and the Labour Market outcomes of Australian workers
The initial focus of the study was on trend of overseas arrivals as well as unemployment rate
(Atalay, Kim & Whelan, 2014).The study has used to forecast on the Australian resident
population in the absence of the immigration factor.
The Second step of the study was correlation and regression analysis considering overseas
arrivals as independent variable and total unemployed Australian work force as dependent
variable (Bardsen, Hurn & McHugh, 2010).
Quality and coherence of Project
The study conducted under this research project is highly consistent. It provides deep insights
into the relationship between the immigration structure as well as the Australian Economy
(Berry, 2009). The possible scope of sampling error in the given labour force statistics is limited.
Further the possibility of deviations in the survival rate statistics is also negligible as majority of
the calculation involve younger age groups. Although the sampling errors in ERP statistics were
subjected on the higher side due to the presence of a larger data set but considering the report
published by ABS relate to the historical standards, the 2016 Census results have little change in
ERP (ABS 2017).
Results and Findings
Trend analysis
Overseas arrivals:
While Australia has dependably been one of the world's real 'movement countries', there have
been some checked changes to the sythesis of its relocation streams as of late. Verifiably, the
larger part of Australia's abroad conceived occupants originated from the UK or Europe,
however this example has moved altogether. In spite of the fact that the greater part of Australia's
abroad conceived occupants begin from the UK, the numbers are declining—clearing a path for
an expanding number who were conceived in Asia, especially China and India. As far as new
(changeless) vagrants, without precedent for Australia's history, contestants from China
surpassed those from the UK in 2010– 11. The flow consider has likewise demonstrated that
there is a steady pattern in abroad landings for work reason.
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Effect of immigration to Australia and the Labour Market outcomes of Australian workers
Another noteworthy improvement in Australia's relocation story is the development in the
quantities of impermanent vagrants entering the nation. Impermanent transients qualified to
remain long haul (a year or more) and work for fluctuating timeframes incorporate gifted
(subclass 457) specialists, abroad understudies and working occasion creators. Furthermore,
under the Trans-Tasman Travel Arrangement, New Zealanders are allowed to visit, live and
work in Australia. Subsequently, New Zealanders likewise highlight exceedingly in Australia's
pioneer landing insights, yet take note of that they are not viewed as perpetual vagrants (or
incorporated into the Migration Program measurements) except if they apply for (and are
allowed) a lasting visa.
Dec-14 Jul-15 Jan-16 Aug-16 Mar-17 Sep-17 Apr-18 Oct-18
0
10000
20000
30000
40000
50000
60000
70000
f(x) = 12.792429184705 x − 509851.091577463
R² = 0.271132990739394
Migrants [For Employment Purpose]
Unemployed Australian workforce:
Every month the ABS evaluates the quantity of jobless individuals, discharging pattern,
occasionally balanced and unique information. Joblessness information is accessible by age, sex,
social conjugal status, nation of birth (constrained), state/an area, work showcase locale, full-
time instructive participation (youth just), and length of quest for new employment.
Changes in the quantity of jobless individuals (increments or declines in the quantity of
'jobseekers') are some of the time erroneously alluded to as increases or misfortunes of
occupations. While the passing of work unquestionably may prompt a man being named jobless,
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Effect of immigration to Australia and the Labour Market outcomes of Australian workers
it is regardless of whether they are utilized that is being estimated. Below chart gives changes in
the quantity of jobless individuals from the beginning of the information arrangement until the
latest time frame.
Dec-14 Jul-15 Jan-16 Aug-16 Mar-17 Sep-17 Apr-18 Oct-18
0
100
200
300
400
500
600
700
800
900
f(x) = − 0.0122345401536053 x + 1255.21895013679
R² = 0.00756672953240101
Australia ; Unemployed total ; ['000]
Correlation and regression analysis:
The below table has shown that the R Square is equals to 0.1162, which indicates a positive
association between overseas arrivals for employment purpose and unemployed Australian
workforce. Even though, the association is close to 0, it can be said that the migrants has led to
unemployment of Australian workforce.
SUMMARY OUTPUT
Regression Statistics
Multiple R 0.116273718
R Square 0.013519577
Adjusted R Square -0.016373769
Standard Error 44.23370838
Observations 35
ANOVA
df SS MS F
Significance
F
Regression 1 884.9022293
884.902
2 0.45226
0.50594542
7
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Effect of immigration to Australia and the Labour Market outcomes of Australian workers
Residual 33 64568.49158
1956.62
1
Total 34 65453.39381
Coefficients
Standard
Error t Stat P-value Lower 95% Upper 95%
Intercept 708.4887222 36.84005174
19.2314
8 1.69E-19
633.537073
3 783.440371
Migrants [For
Employment
Purpose] 0.000665661 0.000989826
0.67250
3
0.50594
5
-
0.00134815
5
0.00267947
8
To check if your results are reliable (statistically significant), the researcher has looked at
Significance F (0.505). It indicates that the impact of overseas arrival for employment purpose is
alone not responsible for unemployment issue. Migration and the subsequent unemployment
have been one of the real issues in the conventional and in addition contemporary worldwide
monetary situation. Business analysts have created diverse models to clarify the occurrence of
work movement with regards to a double economy. Every one of these models depend on the
suspicion that there are two parts that involve a creating economy in particular the essential
division or conventional farming segment and the optional segment or present day modern area.
The farming area is portrayed by surplus workforce; though, the mechanical segment goes about
as the motor of development for the economy.
Discussion over the findings of the research
The key findings from the above analysis revealed the immigrant workforce plays a crucial role
in defining the employment changes as well as the financial productivity of the host nation. As
evident, between the time periods of 2015 to 2018 not only the immigrant workforce increased
but they were the major contributors or participants of the Australian workforce during that time.
Majority of these immigrants worker belong to the group of students and working
holidaymakers, who majorly undertake these working opportunities to support their basic
expenses. This work group is majorly involved in the hotel and retail industries. In addition to
the Australian students, several other groups including Netherland and other OCED countries
(Meng & Deng, 2013). In industries where demand peaks and valleys are low, the availability of
large groups that are willing to work under these conditions is very beneficial to employers, both
in the day and in the year. The key reasons behind the industries opting for immigrant students is
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Effect of immigration to Australia and the Labour Market outcomes of Australian workers
their comparatively higher skill set. The given statistics clearly represents that the decomposition
of the Australian workforce with respect to the total number of people employed in Australia
between June 2011 and June 2016, ages 15–24, 25–54 and 55 and over (Uhlendorff &
Zimmermann, 2014). It clearly states that there is an evident employment growth in the working
age group of (25-54 years old). The employment ratio has majorly increased during this five year
period. Although the increment has not been highly exponential due to changes in employment
participation (Wright, 2013).
Drawing on the learning from different literatures (part of the literature review), the current
trends and stats reflected by the statistical analysis, the lack of professional competency as
compared to the migrant workforce can be the key reason behind the unemployment in case of
Australian. Further the experience level of the migrant workforce is also considerably higher as
compared to the professional competency level of the local workforce. Hence, the issue is far
more stretched from the employment and migration control policies. The following figure
represents the same.
Other evident trends were drawn in form of the visa or resident type that the migrant workers
have. Migrants with permanent resident visas were most likely to be employed in the market as
compared to the migrants who are seeking a job either on the basis of a temporary visa or on
student visa type. All these stats clearly highlights that the migrants workforce has a significant
role to play in improving or enhancing the financial performance and the productivity of the host
nation. Even in the unlikely events where the local workforce or employment is reduced or
minimised to zero, the employment and in turn the overall productivity of the nation will not
cease to grow. These research surely highlighted the importance of the migrant workforce but the
fact that the controlling authorities of the country still has a lot to think for.
Before allowing migrants as work force, local population ought to be furnished with important
instruction and fundamental abilities preparing. This will enable them to exploit monetary open
doors in their goal nation or society, thus adding to lessening the rate of "mind squander,"
especially for very talented or semi-gifted vagrants.
There are likewise various exercises that are basic to advancing the privileges of youth work
transients and relieving the danger of them encountering the most exceedingly awful types of
misuse and misuse.
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Effect of immigration to Australia and the Labour Market outcomes of Australian workers
These include:
●Sharing solid and applicable data about what's in store amid their adventure
●Informing them of their work rights and duties
●Providing techniques for revealing sick treatment in the goal nation or society
●Facilitating coordination into the goal nation or society by giving data on its way of life.
Conclusion
The studies clearly reveal that the immigrants have ensure significant financial benefits to the
Australian economy. It has not only allowed the Australian industries to substitute the low
performance or competent individuals but ensure that the evident skill gaps between the current
group and the required group can be filled. Additionally, the factors like the required skill set,
increase in population, and increased commitment of Australian young professionals into higher
educational courses and skills trainings have resulted in development of several skill supply
challenges. Following the after effect of global financial crisis, immigrant workers have served
as the core strength of pillars for ensuring financial progress of the nation.
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Effect of immigration to Australia and the Labour Market outcomes of Australian workers
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