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4102.0 - Australian Social Trends, 2006  
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Contents >> Work >> Labour Force Participation of Migrants

Labour Force Participation of Migrants

Migrants who held a job prior to arrival in Australia had a higher age standardised labour force participation rate (71%) than those who didn't (50%).

Migration has been pivotal in shaping Australia's economy and culturally diverse society, through its contribution to the size and composition of the population and labour force. In November 2004, more than one-quarter (28%) of the Australian civilian population aged 15 years and over was born overseas.

Finding secure employment can be crucial for migrants in their transition to life in Australia as it provides income to support themselves and their families. In addition to the length of time since arrival, the labour market success of migrants is in part dependent on a range of personal attributes including proficiency in English, age, educational qualifications and previous work experience.

This article profiles the labour market outcomes of migrants who arrived in Australia over the past two decades. For the purposes of this article, migrants are defined as those who were born overseas, arrived in Australia between 1985 and 2004, were aged 15 years and over on arrival, and were permanent Australian residents at the time of interview.


Data source and definitions

Data presented in this article are mainly from the ABS November 2004 Labour Force Status and Other Characteristics of Migrants Survey. This survey relates to the civilian population aged 15 years and over, excluding institutionalised people, boarding school pupils and people in very remote areas of Australia.

In this article, migrants are defined as those who were born overseas, arrived between 1985 and 2004, were aged 15 years and over on arrival, and were permanent Australian residents.

Other overseas born are people born overseas excluding migrants as defined above.

Persons in the labour force are either employed or unemployed. The labour force participation rate for any group in the population is the labour force component of that group, expressed as a percentage of the population of that group.

The unemployment rate for any group is the number of unemployed people expressed as a percentage of the labour force in the same group.

Age standardised rates for labour force participation and unemployment are the rates that would have prevailed if the migrant and other overseas born populations had the same age structure as the Australian-born population. Age-standardising enables comparison of rates between populations with different age structures.


LABOUR MARKET OUTCOMES

In November 2004, the civilian population of Australia aged 15 years and over was 15.7 million people and almost three-quarters (72% or 11.4 million people) were born in Australia. The remaining 28% were born overseas (4.3 million people). Migrants accounted for 9% (1.4 million people) of the Australian population aged 15 years and over.

The age structure of both migrants and other overseas born differs from the age structure of those born in Australia. When adjusted to remove the effects of these different age structures, migrants had a lower labour force participation rate (62%) than people born in Australia (67%). The labour force participation rate for other overseas born (61%) was also lower than for Australian-born.

The age standardised unemployment rate was much higher for migrants (6.2%) than for people born in Australia (4.9%). Migrants tend to fare better in the labour market the longer they are in Australia. Other overseas born had a lower unemployment rate (4.3%) than people born in Australia (4.9%). Other overseas born are a diverse group including migrants who arrived in Australia before 1985, as well as migrants who have arrived since 1985 and were less than 15 years old on arrival. This group might be expected to have similar characteristics to the Australian born population, given their length of time in Australia or involvement in the Australian education system.

SELECTED LABOUR FORCE INDICATORS OF PEOPLE AGED 15 YEARS AND OVER — November 2004

Persons
Labour force participation rate(a)
Unemployment rate(a)
'000
%
%

Born in Australia
11 402.6
67.3
4.9
Migrants
1 362.6
62.3
6.2
Other overseas born
2 980.0
61.3
4.3
Total aged 15 years and over
15 745.2
64.8
4.8

(a) Data for the migrant and other overseas born populations has been age standardised to the Australian born population.

Source: Labour Force Status and Other Characteristics of Migrants, November 2004 (ABS cat. no. 6250.0).


MIGRANT CHARACTERISTICS AND LABOUR MARKET OUTCOMES


Migration programs in Australia

Planned permanent migration to Australia is administered through the Migration Program and the Humanitarian Program. These two programs regulate the flow of people seeking permanent residence in Australia. While New Zealand citizens may apply for permanent residency through either of these two programs, the 1973 Trans-Tasman Travel Arrangement allows them to enter Australia to visit, live and work without seeking a visa.(EndNote 1)

The Migration Program has two streams: a Skill Stream and a Family Stream. Information from the Department of Immigration and Multicultural Affairs indicates that the Migration Program for 2005–06 will be in the range of 130,000 to 140,000 people, of which 97,500 are expected to be under the Skill Stream. The Skill Stream is specifically designed to target migrants who have skills or outstanding abilities that will contribute to the Australian economy. Migrants who come to Australia under the Skill Stream generally have previous work experience, non-school education qualifications and are proficient in English. The 2005-06 intake will be the largest ever under the Skill Stream and will account for approximately 70% of migrants to Australia in 2005–06.(EndNote 1)

The Humanitarian Program is designed to ensure that visas are granted to those with strong humanitarian claims and in compelling need of resettlement. They are not selected on the basis of attributes (e.g. English proficiency and educational qualifications) that prepare them to become fully engaged in the Australian labour market in the short term. In addition, they may not have social and family support networks in Australia.(EndNote 1)

There has been a significant shift in the focus of the Migration Program over the last ten years. Of particular interest is the increasing intake of Skill Stream migrants since 1997–98. In comparison, the number of Family Stream migrants has remained relatively stable during this period. This reflects the need for skilled labour in Australia. The number of humanitarian entrants has remained relatively constant over the last 20 years.(EndNote 1)
MIGRATION PROGRAM OUTCOMES(a)
GRAPH: MIGRATION PROGRAM OUTCOMES(a)
(a) Data for 2005–06 reflects migration targets.
Source: Department of Immigration and Multicultural Affairs
...SEX
Just under half of migrants were men (46%) as at November 2004, which was similar to the sex composition of people born in Australia, 49% of whom are men.

Migrant men had a similar age standardised labour force participation rate (74%) to Australian-born men (75%). Migrant women's age standardised labour force participation (52%) was lower than Australian-born women (60%), and much lower than migrant men. The comparatively low levels of labour force participation among migrant women may in part reflect their lower levels of English proficiency and labour market experience prior to arrival in Australia.

Age standardised unemployment rates were lower for migrant men (5.8%) than migrant women (6.6%). Both of these rates were higher than for Australian-born men and women (4.9% for both populations).

...AGE

The following discussion compares the age profile of migrants and people born in Australia, and examines migrants' labour force participation patterns by age group. For this reason, labour force participation rates have not been age standardised in the age discussion below.

The migrant population has a younger age structure compared with people born in Australia, with a higher proportion of migrants in the age group 25–54 years. The younger age structure of migrants in part reflects the definition of migrants used in this article, which focuses on those arriving in Australia between 1985 and 2004 thereby limiting numbers in older age groups. In addition, migrants applying to come to Australia under the Skill Stream are required to be under 45 years at the time they apply.

In November 2004, 80% of migrants were aged 25–54 years, compared with 54% of Australian-born. The labour force participation rate for migrants aged 25–54 years was 77%, lower than that for Australian-born in the same age group (83%).

Migrants' labour force participation by age group is similar to the pattern for people born in Australia. Young migrant men and women had relatively low participation rates compared with older migrants. Men's participation increased when they reached 20–24 years of age and remained relatively stable through to 55–59 years, after which it declined. Migrant women's participation showed a small peak among women aged 25–29, a trough at the prime child rearing ages of 30–39 years and then another peak between 40–49 years. Migrant women's labour force participation declined from 50–54 years onwards.

LABOUR FORCE PARTICIPATION RATES — November 2004
GRAPH: LABOUR FORCE PARTICIPATION RATES — November 2004



...OCCUPATION

Migrants and Australian-born people had similar occupation profiles. Professionals, Intermediate clerical, sales and service workers, Associate professionals and Tradepersons and related workers are the four most common occupation categories for both population groups. A higher proportion (24%) of employed migrants were Professionals at November 2004, compared with 18% of people born in Australia. Many of these professionals would have come to Australia under the Skill Stream migration program which targets professionals and skilled migrants.

OCCUPATIONS OF EMPLOYED PERSONS — November 2004
GRAPH: OCCUPATIONS OF EMPLOYED PERSONS — November 2004



...LABOUR FORCE INVOLVEMENT PRIOR TO ARRIVAL

Almost two-thirds (64%) of migrants had held a job in the country they lived in prior to migrating to Australia. A higher proportion of migrant men held a job prior to arrival in Australia than migrant women (74% compared with 56%). Migrants who had held a job had a higher age standardised labour force participation rate (71%) than those who did not have a job before arrival (50%).

Similarly, sub-groups of migrants with high levels of employment prior to migration also had high levels of labour force participation. These include those proficient in English, people aged 35–54 years, men and Skill Stream migrants.

...QUALIFICATIONS PRIOR TO ARRIVAL

While nearly half (49%) of migrants had obtained a non-school qualification prior to arrival in Australia, more recently arrived migrants and Skill Stream migrants were more likely to hold non-school qualifications. For example, 57% of recently arrived migrants (i.e. those that arrived between 2000 and 2004) and 71% of Skill Stream migrants had non-school qualifications on arrival. Relevant skills (including qualifications) is one of the key criteria for the Migration Program's
Skill Stream.


Migrants who had obtained non-school qualifications prior to arrival had better labour market outcomes than migrants without these qualifications. The age standardised labour force participation rate of migrants who had obtained non-school qualifications prior to arrival (71%) was higher than the rate for those without qualifications on arrival (56%).

…VISA TYPE AND PERIOD OF ARRIVAL IN AUSTRALIA

Migrants' labour force participation rates vary with period of arrival and tend to be higher among those more recently arrived. Migrants arriving between 1995 and 2004 had a higher age standardised labour force participation rate (60%) than those arriving between 1985 and 1994 (51%).

Skill Stream migrants tend to have better labour market outcomes than other migrants. The higher rates of labour force participation among more recent migrants is consistent with the steady increase in the intake of migrants under the Migration Program's Skill Stream since the mid 1990s. Principal applicant migrants in the Skill Stream (i.e. the family member for whom the eligibility to migrate was determined), generally have previous work experience, non-school qualifications and are proficient in English.

At November 2004, the age standardised labour force participation rate for Skill Stream migrants (66%) was slightly below the labour force participation rate for people born in Australia (67%) but was much higher than the participation rate for migrants who arrived in Australia on a family visa (51%). Skill Stream migrants also experienced lower levels of unemployment. The age standardised unemployment rate for Skill Stream migrants (3.0%) was lower than unemployment rates for migrants arriving on family visas (9.2%) as well as Australian-born people (4.9%).

The longer migrants have lived in Australia the less likely they are to be unemployed. Age standardised unemployment rates were highest among migrants arriving between 2000 and 2004 (9.0%). The longer the period since arrival, the more likely migrants have obtained educational qualifications, improved their English proficiency and developed knowledge of the labour market.

SELECTED LABOUR FORCE INDICATORS OF MIGRANTS — November 2004

Labour force participation rate(a)
Unemployment rate(a)
%
%

Period of arrival
1985–1989
51.6
3.0
1990–1994
49.4
2.8
1995–1999
62.7
6.4
2000–2004
58.4
9.0
Selected visa type(b)
Skill
65.5
3.0
Family
50.5
9.2
Total migrants
62.3
6.2

(a) Age standardised to the Australian-born population.
(b) Reflects the visa of migrants when they arrived to live in Australia, not their visa type at November 2004.

Source: Labour Force Status and Other Characteristics of Migrants, November 2004 (ABS cat. no. 6250.0).

English proficiency

People who are proficient in English are those who report that only English is spoken at home, or that they speak English very well or well.

People with lower English proficiency are those who report that they speak English not well or
not at all.


English proficiency is asked of people born in non-main English speaking countries for whom English is not the main language spoken at home. Non-main English speaking countries are all countries except the United Kingdom, Ireland, New Zealand, Canada, the United States of America and South Africa, excluding Australia.


...ENGLISH PROFICIENCY

Being able to speak English well is a major factor for migrants in seeking employment. Migrants born in non-main English speaking countries comprised 68% of the total migrant population, or 932,200 migrants, in November 2004. Of these, almost three quarters (73%) were proficient in English, with a higher proportion of migrant men proficient in English than migrant women (77% compared with 73%). Migrants born in main English speaking countries had a higher age standardised labour force participation rate (72%) than migrants who were proficient in English and were born in non-main English speaking countries (66%). Those born in non-main English speaking countries with lower levels of English proficiency also had lower levels of labour force participation (37%).

It is a requirement that Skill Stream principal applicants are proficient in English. There is no requirement for migrants who arrive under the Family Stream or Humanitarian Program to be proficient in English. Most (90%) of migrants from non-main English speaking countries who arrived under the Skill Stream reported that they spoke English well. This figure was 62% for those who arrived under the Family Stream and 50% for those who arrived under the Humanitarian Program.

Trends in migrants' labour outcomes

Data in this article are primarily based on the ABS November 2004 Labour Force Status and Other Characteristics of Migrants survey. This survey provides a snapshot of migrant characteristics and their labour force status at November 2004. To look at trends in migrants' labour outcomes over a longer period we need to use a different data source, the ABS Labour Force Survey (LFS).

The November 2004 Labour Force Status and Other Characteristics of Migrants survey defines migrants as people who were born overseas, arrived within 19 years of the survey date, were aged 15 years or over on arrival and were permanent residents of Australia. Estimates of migrants can be derived from the LFS using the same criteria except the permanent resident criterion.
LABOUR FORCE PARTICIPATION RATES(a) FOR PEOPLE AGED 15 YEARS AND OVER
GRAPH: LABOUR FORCE PARTICIPATION RATES(a) FOR PEOPLE AGED 15 YEARS AND OVER
(a) Age standardised for the migrant and other overseas
born populations to the born in Australia population.
(b) Includes permanent and some temporary residents.
Source: ABS Labour Force Survey.

Migrants who are permanent residents at time of interview tend to have higher rates of labour force participation than those who are temporary residents, in part because some temporary residents are prevented by their conditions of entry from seeking employment. For example, in November 2004, according to the Labour Force Status and Other Characteristics of Migrants survey, the age standardised labour force participation rate for migrants who were permanent residents (62%) was higher than for those who were temporary residents (43%). As a result of this difference, participation rates for migrants presented below from the LFS are slightly lower than those presented elsewhere in this article.

The age standardised labour force participation of migrants has remained relatively stable over the past two decades, decreasing slightly between
1984 (59%) and 2004 (57%), while for other overseas born there was a slight increase over the same period, from 62% to 64%. In contrast the labour force participation rate of people born in Australia increased from 61% in 1984 to 67% in 2004.


There were declines in men's age standardised participation rates for migrants and other overseas born, consistent with the decline in men's participation for the Australian population. In contrast, women's participation rates have increased. This increase was greater for women born in Australia (from 46% in November 1984 to 60% in November 2004) than for migrants and other overseas born. Over the same period, women's age standardised labour force participation rates increased for both migrants (from 46% to 48%) and for other overseas born (from 49% to 57%).

Migrants have experienced higher unemployment rates than other overseas born and people born in Australia since 1984. For all three groups, unemployment rates were at a relatively low point in November 2004.


END NOTES
1 Australian Bureau of Statistics 2006, 'Labour market outcomes of migrants', Australian Labour Market Statistics, cat. no. 6105.0, ABS, Canberra.


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