Who comes in and how do they fare in the employment market?
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Australian immigration and settlement in the 21st century: who comes in and how do they fare in the employment market? Val Colic-Peisker RMIT University Abstract This paper analyses quantitative data on settler arrivals in Australia over the past decade and data from the most recent Australian census in order to address two main questions: 1. who gets Australian permanent visas through two points-tested immigration programs, ‗family‘ and ‗skill‘; and 2. how do highly skilled settlers fare in the Australian labour market. Both questions focus on the variable of the country of birth/country of citizenship of the immigrants as the two characteristics largely overlap. To elaborate on the first question, I use data on visa applications and grants supplied by the Department if Immigration and Citizenship (DIAC) and to address the second, I use select data on education and occupation from the 2006 Australian Census. This short paper offers a broad introductory picture on the success of the visa application process, and labour market integration by the country of origin, while only touching upon some other important variables such as the length of residence of individual settlers and the relative recency or establishment of various migrant communities. Keywords: recent immigration, settlement, Australia, skilled immigrants, employment Introduction Australian immigration is a topic of nearly constant public debate, meticulous data collection and much research and analysis. As I write these lines, a heated debate on net immigration levels is unfolding as part of the federal election campaign. Immigration is also a matter of everyday experience for Australians, especially in
2
large cities, where about one-third of the population is overseas-born (ABS 2006;
Birrell and Rapson 2002). If we don‘t ourselves belong to this category then we
surely meet and deal with recent immigrants on a daily basis, in the workplace, in
shops, on the street, in our neighbourhoods. Immigration and settlement is not just
an important policy concern but also a recognisable flavour of Australian life.
This paper analyses some aspects of these two processes as they have
unfolded over the past decade. It focuses on the two largest and points-tested
permanent immigration streams: ‗family‘ and ‗skill‘. Together these two streams
comprise more than 90 per cent of the settler (permanent) immigration; the third
settler stream, humanitarian immigration, is not analysed here because of the
unavailability of detailed data. The family and skilled streams have both grown
considerably over the past decade, in the context of economic prosperity, low
unemployment and so-called ‗skill shortages‘. Over the past 15 years, the skill
stream has been extended by new visa types, and has become numerically
dominant, which is a reflection of the broadly accepted political wisdom that the
country needs, and is most likely to profit from, skilled immigrants. It should be
mentioned that the enlargement of both points-tested settler streams (family and
skill) has been paralleled by even steeper growth of the number of temporary
entrants, especially longer-term stayers (several years), such as international
students and temporary skill entrants (e.g. the much debated ‗457 visa‘ introduced
in 1996). A significant proportion of temporary entrants make the transition to a
permanent resident status.
Over the past decade, the granting of permanent Australian visas has been
increasingly associated with job-readiness of skilled applicants and increasingly
filtered through a regularly updated list of skills in demand (Hawthorne 2008).
This process of focusing skilled immigration more and more on those applicants
who are ‗job ready‘ and towards the immediate needs of the labour market has
been hailed as a great success as it has shortened the time that new arrivals need to
find employment (Hawthorne 2008). One important policy innovation going in the
direction of a larger and more focused skilled stream was the introduction of
‗two-tier migration‘, a transition from the student visa to the permanent skilled
visa, but it proved to be a mixed blessing and in the end also politically
controversial (The Age 2009; The Australian 2009). In any case, points-tested
immigration is an ‗orderly‘, tightly managed program, often praised and copied by3
other countries of immigration. The settlers arriving in Australia through these
immigration streams are the most successful in integrating into the Australian job
market (Richardson et al. 2004).
The latter is usually seen as the main element of overall settlement
success. However, being gainfully employed and not a ‗burden to the taxpayer‘
does not necessarily mean that migrants have made a satisfactory occupational or
professional transition: in spite of the overall success of the Australian
immigration program, much research has shown that human capital is in many
cases wasted, as highly skilled people are constrained by various structural forces
and often forced to accept jobs below their qualifications (Ho and Alcorso 2004;
Colic-Peisker and Tilbury 2007). This is more often the case with some migration
streams (e.g. humanitarian entrants) and nationalities (those perceived as
culturally more distant and therefore exposed to more employment discrimination
through informal non-recognition of skills and other forms of prejudice (Colic-
Peisker and Tilbury 2006; Rydgren 2004). The second data section of this paper
looks at the labour market success of settlers by their country of origin. The earlier
data section presents a broad overview of visa applications and visas granted
through the two points-tested migration streams, ‗family‘ and ‗skill‘.
Method
This article uses two large data sets: the data on permanent visa applications and
visa grants obtained directly from the Department if Immigration and Citizenship
(DIAC) and select data from the latest Australian census (2006). The first data set
contains the numbers of applications for Australian permanent residence through
family and skill streams (for years 2004-05 to 2008-09 inclusive), as well as a
number of visas granted through these streams (for years 1999-00 to 2008-09
inclusive), broken down by the citizenship of applicants. Confirming the known
fact that immigration sources have become more varied over past decades, the list
of permanent residence applications lodged through the two settler streams
contains the impressive total of 208 countries of origin (it also includes ‗UN
Convention Refugees‘ and ‗UN Organisations‘ as sources of applications for
people without citizenship). Curiously, and apparently due to the imperfection of
data collection that may have been caused by changing names of countries and
appearance of new ones1, even more countries are listed in the DIAC‘s database of4
granted visas: 215. Summary statistics drawn from these datasets are presented in
the next section of this paper, as well as immigration success rates for the top ten
source countries.
The second data analysis section of the paper is based on 2006 Census
data. It looks comparatively at a selection of birthplace groups, with a central
emphasis on their formal qualifications (achieved either overseas or in Australia)
and employment achieved in Australia. This analysis focuses on two variables that
are supposed to be highly correlated in order for migrant settlement to be truly
successful: educational qualifications described in the Australian census as
‗degree or higher‘ and holding a professional-level job in Australia. This section
also presents some descriptive statistics on another indicator of conventionally
defined settlement success: income.
Clearly, the immigration and census data used in this paper were not
collected using the same methodology and they contain different categories.
People who were granted Australian permanent visas after satisfying the points
test do not all have higher qualifications—although a significant proportion do,
especially among the skilled entrants from non-English speaking countries. In
addition, recent (2000s) highly skilled entrants only make up a fraction of those
overseas born who declared themselves to be highly educated and employed at a
professional level in the census—because among the latter a majority arrived in
the latter part of last century. While acknowledging these methodological
limitations of the analysis undertaken below, I argue that presenting and analysing
these datasets represents a valuable new contribution and sheds additional light on
the immigration and settlement processes during the past decade. Further
methodological clarifications are given in the data analysis sections below.
Who wanted to migrate to Australia and who actually came over the past
decade?
A carefully managed Australian immigration program started after the Second
World War, when the federal Department of Immigration was created in 1947.
Previously, a broad immigration policy had started in 1901 when the Immigration
Restriction Act, meant primarily to stop Chinese immigration, was passed as one
of the first acts of the newly formed federal parliament. The ‗White Australia
Policy‘ was not fully dismantled until the late 1960s-early 1970s, and a strong5
British preference was part of it. The latter, however, could not be sustained in the
context of post-war British prosperity so the source countries were extended first
to continental Europe—in the late 1940s through the ‗Displaced Persons‘
program—and later, in the 1970s and onwards, to non-European sources. Driven
by the post-war ‗populate or perish‘ imperative, a multicultural nation was
gradually built through increasingly ethnically diverse immigration (Jupp 2002).
In the ‗nation of immigrants‘ certain types of immigrants have always
been preferred over others. While the overt racial and ethnic preferences were
abandoned in the late 1960s, the preference for skilled immigrants was becoming
increasingly dominant, reflecting economic restructuring of the 1970s. The service
sector of the economy was becoming dominant and many low-skilled jobs in the
shrinking manufacturing sector disappeared (Jupp 2002). Immigration policy was
becoming increasingly orientated towards skilled intakes filtered through the
points test introduced in 1979. It weighted visa applications on the basis of
educational qualifications, work experience, English language skills and age.
Over the past several decades, the public debate on immigration has been
conducted on the assumption that the permanent residency of the ‗lucky country‘
is an attractive target and that it is a harder policy task to stop unwanted
immigration (especially the unauthorised ‗boat people‘ i.e. asylum seekers) than to
attract immigrants. Although the government still invests efforts in attracting
specific categories of immigrants, often those job-ready arriving on temporary
visas (certain occupations in short supply, or foreign students who are important
customers for the tertiary education sector) the last propaganda films to attract
settlers were made back in the 1950s-1960s, targeting Britons. Australia is indeed
one of the most stable and prosperous countries in the world, therefore attracting a
large number of applicants from all over the globe. Below are presented summary
statistics on settler visa applications and grants over the past decade. Table 1
confirms that the global immigration supply exceeds the immigration demand by a
considerable margin. It also shows the well known fact that the immigration
program grew fast over the past decade (family stream by 76 per cent in ten years,
and skill stream by 230 per cent). What is also shown is that the number of lodged
applications (immigration supply) also grew substantially over the past five years,
and in the case of the skilled program even faster than the Australian ‗immigration
demand‘ expressed through annual quotas, which then decreased the success6
rate—the proportion of applicants to actually avail themselves of an Australian
permanent residency.
Table 1. Total lodged permanent visa applications and granted permanent visas—
family and skill streams
Year Total Total Success Total Total Success
lodged granted rate lodged granted rate
Family Stream Skill Stream
99/00 32,017 35,352
00/01 33,461 44,721
01/02 38,082 53,507
02/03 40,794 66,053
03/04 42,229 71,243
04/05 58,732 41,736 71% 90,937 77,878 86%
05/06 60,518 45,291 75% 121,427 97,336 80%
06/07 64,776 50,079 77% 152,748 97,922 64%
07/08 67,553 49,870 74% 155,748 108,540 70%
08/09 75,703 56,366 74% 167,842 114,777 68%
Table 2 gives an overview on the most prolific sources of immigrants who were
granted permanent residency visas through the family and skill stream over the
past decade: the ‗top ten‘ countries.
Table 2. Top ten source countries 1999-2009—granted permanent visas, family
and skill streams
Rank Family Skill
1 UK 61,383 UK 168,264
2 China 48,842 India 111,337
3 Philippines 25,851 China 90,626
4 India 24,352 South Africa 58,160
5 Vietnam 22,833 Malaysia 33,562
6 USA 17,710 Philippines 25,952
7 Thailand 14,385 Indonesia 24,993
8 Lebanon 12,021 South Korea 22,996
9 Indonesia 11,169 Singapore 20,999
10 South Africa 8,867 Sri Lanka 20,531
It is shown that the traditional source of immigrants to Australia, the UK, is still
strongly predominant, especially in the skill category. As shown in Table 3, its
success rate in the family stream is the exact average of the top ten countries
(77%), but its success rate in the skill stream is considerably higher and only
second to Singapore (88%). This can be explained by cultural closeness, which in7
this case mainly translates into the fact that the vast majority of applicants from
the UK would not have problems with English language competency or with
recognitions of their qualifications in Australia. There may be other factors, such
as the high likelihood of recognition of UK trade and professional qualifications
by Australian professional associations, which also contributes to their job
readiness and potential ease of achieving employment in Australia—which is a
central consideration in the process of granting skill visas.
Table 3. Top ten source countries‘ success rates (visa grant coefficients) 2004-
2009 for family and skilled streams*
Average
success
04/05 05/06 06/07 07/08 08/09 rate
Family stream
UK 73 82 74 72 84 77%
China 77 65 64 58 66 65%
India 65 73 93 81 84 80%
Philippines 76 74 83 85 76 79%
Vietnam 60 70 96 68 60 70%
USA 77 82 80 85 77 80%
Thailand 75 90 98 82 84 86%
Indonesia 67 75 83 83 80 78%
Lebanon 64 72 73 91 74 74%
S. Africa 79 78 78 62 84 76%
10 countries 77%
average
Skill stream
UK 81 96 94 83 86 88%
India 91 67 47 65 70 68%
China 88 72 63 71 59 70%
Sth Africa 91 83 63 68 70 75%
Malaysia 105 91 74 77 63 82%
Philippines 70 67 59 64 70 66%
Korea Rep. 80 72 57 77 73 72%
Sri Lanka 96 69 52 65 58 68%
Singapore 99 113 72 86 77 89%
Indonesia 91 73 64 88 73 78%
ten countries 76%
average
* Different orders of ‗top ten‘ countries in Tables 2 and 3 is due to the fact that the order in Table 2
includes the last ten years whereas Table 3 includes only the past 5 years, because the lodged
applications data is only available for those years.
These same reasons may be at work in creating lower success rates for more
culturally different non-English speaking countries among the top ten, such as8
India, China, The Philippines and Sri Lanka (success rate 70% or under). Of
course, the success rate, being the ratio of granted visas to lodged applications,
can vary substantially with variation in the number of applicants from every
particular country in any given year, which may depend on the strength of the
‗push factors‘: political upheavals and economic situation, especially
unemployment. There are other factors one could speculate on, but from the
available data it is not immediately clear why, for example, the success rate for
Indian skill applicants dropped to as low as 47 per cent in 2005-06. The
comparison of success rates is further limited by the fact that the data on both
lodged and successful applications are only available for five years 2004-2009.
The generally high success rates in both streams (hovering about 75 per cent) are
likely to be associated with high annual immigration quotas at this time, as well as
their sustained increase over the past decade. It would be interesting to compare
these rates with those during the times of low immigration (e.g. early 1990s).
The success rates for the humanitarian stream are much lower. The humanitarian
entrants make only about 6 per cent of the total settler immigration over the past
decade, down from about 10 per cent in the early 1990s. While detailed annual
data was not supplied, the result for the year 2007–08, available on DIAC‘s
website, provides a good indication: more than 47,000 persons applied and around
10 800 were granted visas, which makes a success rate 23 per cent—dramatically
different from the other two streams.
Once arrived…how do they fare in Australia?
The process of getting Australian permanent residency is a rather onerous exercise
of filling forms and collecting many documents and clearances. In addition, over
the past 15 years the application fees have considerably increased. The
proliferation of migration agents in recent years represents a help but also an
additional expense to visa applicants. Migration agents may also be a factor
behind the steep increase in visa applications, especially in the skill category
(Table 1), alongside the introduction of the two-step migration for international
students.
Once the applicants obtain a visa and make the life-changing decision to move
to Australia, the most important task for the majority would be to find a job and9
secure an income, especially given that they face a two year waiting period before
they are eligible to receive social security payments.2
This section of the paper focuses on some groups of the overseas-born
(first generation immigrants) with high qualifications and looks at how they
translate their human capital into adequate (professional) jobs. Table 4 groups the
overseas born into ‗older‘ birthplace groups3 and more recently arrived groups.
The latter were filtered through the points test and are therefore much better
educated. Table 4 also shows median income of these birthplace groups.
Table 4. Higher education, professional employment and income of select
birthplace groups (2006 Census).
Table 4 shows a dramatic difference in educational qualifications between the
older and more recent birthplace groups, which reflects a sharp turn in the
immigration policy in the late 1970s, when previous (1950s-1960s) emphasis on
importing low-skilled labour from non-English speaking countries was abandoned
in favour of people with skills.10 Figure 1 one gives an overview of higher education and how it translates into professional employment in a larger number of birthplace groups. Educational qualifications unevenly translate into professional-level employment. The Bangladesh-, India- and Pakistan-born have an especially high discrepancy between higher qualifications and professional jobs uptake, while South Korea, China and Taiwan have a somewhat smaller but still considerable gap. This may be partly due to the presence of a relatively high number of international students in these birthplace groups, who already have tertiary degrees but only have limited rights to work, and often work in low-skilled jobs (Singh and Cabraal 2009). Figure 1. Higher education and professional employment of the select birthplace groups. Older migrant communities (from Italy to Poland inclusive) show the opposite phenomenon: their take-up of professional jobs is higher than their rate of higher education. ‗Intermediate‘ migrant groups (not the oldest but also not the most recent) such as Bosnians and the Vietnamese also seem to fare well in the labour market relative to their higher education rates. This indicates that the length of residence in Australia is an important factor in labour market success, working through the accumulation of bonding as well as bridging social capital (or ‗weak ties‘, see Granovetter 1973), and that the established migrant communities are also
11
able to employ this social capital in assisting their more recently arrived
compatriots as well as their second generation to obtain good jobs.
Figure 2 shows the ‗return on educational investment coefficient‘ for a range of
birthplace groups in descending order. The coefficient is calculated by dividing
the proportion of people with professional employment by the proportion of those
with ‗degree or higher‘ education in each birthplace group.
F ig ure 2. R eturn on E ducational Inves tment C oefficient
3
2.5
2
1.5
1
0.5
0
T aiwan
India
S . A fric a
Italy
P oland
B glds h
P akis tan
G reec e
S ingapore
V ietnam
Malta
C hina
C roatia
B os nia
Malays ia
R us s ia
S ri L anka
S . K orea
Hong K ong
G ermany
UK
C ountry of B irth
Conclusion
This paper analysed Australian ‗skilled‘ and ‗family‘ settler intakes over the past
decade, focusing on the variable of the country of birth/country of citizenship of
immigrants. It compares the two largest immigration streams in terms of source
countries and immigration success rates. On a meta-analytical level, the data
presented above challenges the largely unspoken assumption among the
Australian public that there are long queues for desirable Australian permanent
residency and that Australia is in danger of being ‗swamped‘ by immigrants if it
does not manage its immigration and controls its borders tightly and efficiently. In
fact, the paper shows that around three quarters of people who applied for
Australian permanent residency in non humanitarian categories actually obtained12
it. The reality is that alongside controlling its immigration Australia has to
compete for ‗global talent‘, especially for certain types of professions in high
global demand and are lacking in Australia (Hawthorne 2005). The assumption of
a long immigration queue often becomes explicit where asylum seekers and
humanitarian immigration are discussed, and the success rate is indeed much
lower in this category of immigrants considered less desirable and a potential
financial burden by Australian policymakers. The current debate on optimal
population levels further emphasises the importance of planned immigration for a
settler nation such as Australia.
The successful settlement of immigrants is the logical follow-up issue to
the issue of planned and orderly immigration. The second part of the paper briefly
analysed this issue, and showed that birthplace was not irrelevant to settlement
success—and in this case its central aspect, labour market integration and closely
correlated income. The census data used only show the situation of the
professionally educated segment of the overseas born; the relative size of this
section and its importance in the service and knowledge economy hopefully
justifies this choice, made out of necessity to produce a short paper.
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market: the experience of three ―visibly different‖ groups of recently
arrived refugees‘, International Migration 45(1): 59-85
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Singh, S. and Cabraal, A. (2010) ‗Indian student migrants in Australia: issues of
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Ed)
1
E.g. one country splitting into two or even three as was the case with ‗Serbia and Montenegro‘
which during the 2000s became three countries: Serbia, Montenegro and Kosovo.
2
See http://www.centrelink.gov.au/internet/internet.nsf/individuals/settle_pay_permres.htm
accessed 28 July 2010.
3
E.g. most Italy-born settlers arrived decades ago, before the introduction of the points test and
very few arrived in recent decades. The same applies to the Greeks, Maltese and to a lesser degree
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