Economic impacts of migration and population growth
report
Economic impacts of migration and population growth
Research report
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Migration has been an important influence on Australian society and the economy
- affecting the size, composition and geographic location of the population and workforce.
Recent changes to Australia's migration program include a greater emphasis on skills, increased numbers of temporary immigrants, and more diversification in the country of origin.
The number of Australians leaving this country, permanently and long term, has risen markedly in recent years.
- But the number has been considerably smaller than those coming to Australia.
Economic effects of migration arise from demographic and labour market differences between migrants and the Australian-born population, and from migration-induced changes to population growth.
However, the Commission considers it unlikely that migration will have a substantial impact on income per capita and productivity because:
- the annual flow of migrants is small relative to the stock of workers and population
- migrants are not very different in relevant respects from the Australian-born population and, over time, the differences become smaller.
Some effects of migration are more amenable to measurement and estimation than others. Effects that cannot be reliably measured or estimated might still be significant.
- Positive effects from additional skilled migrants arise from higher participation rates, slightly higher hours worked per worker and the up-skilling of the workforce.
- Some of the economy-wide consequences lower per capita income, such as capital dilution and a decline in the terms of trade.
- The overall economic effect of migration appears to be positive but small, consistent with previous Australian and overseas studies.
In terms of the selection criteria of the Migration Program:
- the greater emphasis on skills has been associated with better labour market outcomes for immigrants
- English language proficiency stands out as a key factor determining the ease of settlement and labour market success of immigrants.