immigration, ageing and the labour force in australia€¦ · net overseas migration level of net...
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Immigration, Ageing and the Labour Force in Australia
Peter McDonald
Professor of Demography
Melbourne School of Population and Global Health
University of Melbourne
Japan The classic case of population ageing
Australia’s Age Distribution in 2011 and 2061
Source: ABS 2013. Population Projections, Australia. ABS Catalogue No. 3222.0
Dark = 2061
Light = 2011
In 2061, the bulge remains in the working ages.
% Difference in the 2051 Population Projected by ABS
in its 2003 and 2013 Projections, by Age Group
0
10
20
30
40
50
60
70
80
90
0-9 25-34 35-44 65-79 80+ Total
Age Group
% Migrants get old just like everyone else. Yes, but they are much younger than the OZ population when they arrive and they have babies before they get old.
Ratio of Population Aged 15-24 in 2050 to
Population Aged 15-24 in 2010
0
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
Australia has a higher growth rate of the labour force entry ages than all of these Asian nations
Per Cent of Population Aged 65 Years and Over in 2053 Under Varying Assumptions of Annual
Net Overseas Migration
Level of Net Overseas Migration
Per Cent of Population Aged 65 and Over, 2053
0 28.4
100,000 25.2
180,000 23.4
300,000 21.2
% Aged 65+ in 2016 15.3
Population ageing is modified significantly by immigration
How does immigration affect the size of the Australian labour force?
11000000
13000000
15000000
17000000
19000000
21000000
23000000
25000000
2012
2015
2018
2021
2024
2027
2030
2033
2036
2039
2042
2045
2048
2051
2054
2057
2060
0 100 180 300
Constant labour force participation rates;
Migrants assumed to have Australian labour force participation rates
Net migration of zero means no future growth of the Australian labour force
GDP per Capita Growth Rate (2013-2053) under different levels of net overseas migration
Annual
Growth
Rate of
GDP per
Capita
%
1.2
1.3
1.4
1.5
1.6
1.7
1.8
1.92013
2015
2017
2019
2021
2023
2025
2027
2029
2031
2033
2035
2037
2039
2041
2043
2045
2047
2049
2051
2053
0 100 180 300
Assumption: Migrants have same labour productivity as other Australians: 1.6%
GDP per Capita is 12% higher in 2053 with 180K migrants compared with zero migrants – due only to the impact of migration on age structure
Is there a desirable range for annual migration?
• The impact of immigrants on GDP per capita (through changing the age composition of the population) is subject to diminishing returns.
• By examining the increments to the growth rate of GDP per capita for each additional 10,000 migrants, McDonald and Temple conclude that a range of 160,000 to 220,000 optimises the effect.
• The Australian Government migration programme has been set at 190,000 for the past six years.
Factors Contributing to Change in Employment in Australia, June 2011 – June 2016
-200
-100
0
100
200
300
400
500
15-24 25-54 55+
Migration
2011-2016
Population
Growth –
no migration
Participation
TOTAL
Annual Employment Growth: 0.2% without migration 0.8% with migration
Employment Change, 2011- 6, ’s
Gender Effect
Without With
Migration Migration
Males 6 306
Females 120 433
Employment Change, 2011- 6, ’s
Age Effect
Without With
Migration Migration
<55 years -143 452
55+ years 268 286
Migration yields a much younger age distribution for employment
What are the impacts of immigrants on other workers?
• From June 2011 to June 2016, the unemployment
rate in Australia rose from 4.8% to 5.6%.
• Among migrants in the labour force who arrived
between 2011 and 2016, 4.0% were unemployed in
June 2016, 1.6% points lower than the Australian
average.
Frédéric Docquier, Çalar Özden and Giovanni Peri (2010)
• THE WAGE EFFECTS OF IMMIGRATION AND
EMIGRATION, National Bureau of Economic Research
Working Paper 16646
• The reverse takes place in Canada and Australia
where immigration strongly helps the wages of the
less educated (+3.3 and +4.5% respectively) .
Migration Council of Australia, 2016
• Based on: Independent Macro–econometric
Model (Macro Model), Independent Economics
• The economic impact of migration flows through
into every aspect of the economy. It has a
profound positive impact not just on population
growth, but also on labour participation and
employment, on wages and incomes, on our
national skills base and on net produ ti ity .
Robert Breunig, Nathan Deutscher and Hang Thi To (Economic Record 2017)
• The Relationship between Immigration to Australia
and the Labour Market Outcomes of Australian-Born
Workers
• We find almost no evidence that immigration harms
the labour market outcomes of those born in
Australia .
Kate Golebiowska, Amani Elnasri & Glenn Withers (Australian Geographer, 2016)
• The two-step visa process for regional migrants—has allowed substantial and effective regional
location encouragement for immigrants over the past
de ade .
• The job-creation dimensions of immigration may
mean that regional policies seeking greater
population gro th … an e benefited by the use of
targeted migration visa entry onditions .
Productivity Commission Report, 2016: Key Points
• Australia’s current immigration profile is
projected to deliver a demographic dividend to
Australia and higher economic output per
person.
Change in Numbers Unemployed 2011-2016
Increase in Numbers Unemployed Due To: ’s
• Population Change (without migration) 12
• Change in Unemployment to Population Rates 97
• 2011-2016 Migrants 31
• TOTAL 140
Change in Numbers Aged 15 Years and Over Not in the Labour Force
2011-2016
Increase in Numbers Not In The Labour Force Due To: ’s
• Population Change (without migration) 510
• Change in Labour Force Participation Rates -130
• 2011-2016 Migrants 224
• TOTAL 604