Regional productivity, local labour markets, and migration in Australia

Abstract

This paper offers an overview of recent trends in regional employment and productivity, and describes the characteristics and geographic distribution of migrants in Australia. Additionally, it provides insights on the relationship between migration, employment, and productivity at the regional level in Australia as well as in other OECD regions. It shows that migrants in Australia are more likely to live in metropolitan regions and have much higher average education relative to native-born than in other OECD countries. Yet, despite their higher level of education, migrants have lower employment rates, mainly arising from a low labour market participation of foreign-born women. It also documents that regions with a higher share of migrants also have higher native employment rates and higher levels of labour productivity.

Migration and regional innovation in Australia

“…𝛥 𝑙𝑜𝑔 𝑌 𝑟,𝑡+5 = 𝛽 0 + 𝛽 1 𝛥𝑀𝑖𝑔𝑟𝑎𝑛𝑡𝑠 𝑟𝑡 𝐻𝐸 + 𝛽 2 𝛥𝑀𝑖𝑔𝑟𝑎𝑛𝑡𝑠 𝑟𝑡−5 𝐻𝐸 + 𝛽 3 𝑋 𝑟𝑡 + 𝛼 𝑡 + 𝛥𝜀 𝑟𝑡 (2) The equation is estimated for the period 2011 to 2016 using a 5-year change. 𝛥𝑀𝑖𝑔𝑟𝑎𝑛𝑡𝑠 𝑟𝑡−1 𝐻𝐸 represents the increase in higher-educated migrant population from 2001 to 2006, which corresponds to the previous period.…”

Migration and regional productivity: Evidence from individual wages in Australia

“…For instance, the high costs of housing and living in metropolitan regions might lead migrants to settle in rural regions with lower costs of living but also lower regional productivity levels. Moreover, rural regions in Australia might attract migrants by offering them beneficial employment opportunities in the agriculture or mining sector (OECD, 2023 [45]). Relatively larger shares of migrants in such rural regions can also create a negative bias between migrant shares and productivity levels.…”

The impact of migration on regional labour markets in Australia

“…This paper examines the impact of migrants on native employment and wages in Australian Statistical Area 4 (SA4) regions. 2 Whether migrants boost or harm native wages and employment is one of the most central issues in policy debates. Extensive empirical evidence from OECD countries and beyond has shown that migrants can have both positive and negative impacts on native employment and wages.…”

“…Unlike citizenship, this criterion does not change over time, it is not subject to country differences in legislation and it is thus adequate for international comparisons. Due to data limitations, the paper does not differentiate migrants based on their visa status, country of origin or number of years spent in Australia 2. The Australian Bureau of Statistics (ABS) has designed Statistical Areas 4 (SA4) regions by considering a range of criteria that balance various factors.…”