Immigration works for job rate

Immigration is responsible for three-quarters of the increase in Australia’s workforce partici­pation rate over the past 20 years.

The government has announced a 35,000 increase to the permanent skilled migration program in this financial year, bringing the annual cap on permanent migration up to 195,000. Picture: Getty Images

Immigration is responsible for three-quarters of the increase in Australia’s workforce partici­pation rate over the past 20 years, as foreign arrivals made the population younger than it would have been.

The proportion of people aged 15 years and over either employed or unemployed (without a job but looking for work) has lifted by about 4.3 percentage points over the past two decades to 67 per cent, Australia Bureau of Statistics data shows.

New analysis from Melbourne University professor Jeff Borland found that without migrants, this participation rate would have increased by only one percentage point. Professor Borland said the key to this dynamic was that, thanks to migration, “the population is ageing more slowly than it would have otherwise”.

He said he was surprised with how much impact the ageing effect had on the labour force participation rate. “The overseas-born account for a third of the working population aged 15 years and over, yet they accounted for three-quarters of the increase in the participation rate over the past 10-20 years,” he said.

The government has announced a 35,000 increase to the permanent skilled migration program in this financial year, bringing the annual cap on permanent migration up to 195,000.

Ahead of a wide-ranging review by the Albanese government into the country’s migration settings, Professor Borland said his research showed any review needed to go beyond the short term need to plug skills shortages.

KPMG chief economist Brendan Rynne said skilled migrants not only increased the number of people earning an income and paying tax in the country, they also increased the quality of the local workforce. By bringing new skills to the country, bringing in qualified foreign workers boosted productivity and real wages over the longer term – “increasing the overall economic capacity of the country”, Dr Rynne said.

The National Skills Commission on Monday reported more than 301,100 new job ads were placed online in August – 7700 higher than a month earlier to sit at about 14-year highs.