Sunday, July 23, 2006

Skilled immigrants help Australia out

Australia’s Department of Immigration and Multicultural affairs have published two recent reports on skilled migration. Skilled migration is now by far the most important component of our migration program – in 2005/06 about 70% of migrants were skilled.

Bob Birrell et al, Australia's Net Gains from International Skilled Movement (May 2006) (140KB PDF file). Australia's Net Gains from International Skilled Movement - Appendices (May 2006) (370KB PDF file). A detailed empirical verification of the claim that Australia has been a very significant source of ‘brain gain’ up to 2004/05. This is due to the large numbers of skilled migrants arroiving in Australia and to the return home of skilled expats. While the immigration program is working well in this respect it does signify a dependence on immigration for skilled workers. One interesting statistic I picked up was the significant level of imported economists.

Peter McDonald et al. Immigration and the Supply of Complex Problem Solvers in the Australian Economy (2006) (230KB PDF file) argue that the number of older workers in the economy is increasing while the number of younger workers is falling or growing slowly. If labour shortages provide a stimulus to technological development and to higher productivity resulting from increases in capital per worker, this is not a problem provided older workers are substitutes for young workers. But in jobs that require the most sophisticated technological skills – complex problem solvers or CPS - older workers are not good substitutes for young workers. Psychology and economics show that complex problem solving skills deteriorate rapidly after age 40 and, consistent with this, in Australia, 80% of CPS are aged less than 40. The authors show that migration is a highly effective way of increasing the supply of CPS workers when the migration program is oriented towards high skills.

Good reading for those interested in migration policy.


conrad said...

I always wonder if it would be better to report arrivals and depatures in seperate reports to help deconfound them in people's minds.

At present, I think people seem to treat immigration/emmigration as two different sides of the same coin and therefore they believe you should subtract one from the other to see how well Australia is doing.

However, I think this is faulty logic (excluding people who go and come back), since people come and go for different reasons. You can really win/lose at both immigration and emmigration, and presumably can do so for different reasons. I haven't read the report yet, but most of the others show that qualitatively different groups come/go, again suggesting a false dichotomy.

hc said...


I think they are analysed separately in DIMA documents - at least they were in the past.

I think both groups interesting as separate data sets but the net figures interesting to. Contries of net emigration often have deep seated economic or other problems.