Immigration, Ageing and the Labour Force in Australia Peter - - PowerPoint PPT Presentation

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

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

0.2 0.4 0.6 0.8 1 1.2 1.4 1.6

Australia has a higher growth rate

• f 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 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

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 1.9 2013 2015 2017 2019 2021 2023 2025 2027 2029 2031 2033 2035 2037 2039 2041 2043 2045 2047 2049 2051 2053

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

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

• ther 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 produtiity.

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 deade.

• The job-creation dimensions of immigration may

mean that regional policies seeking greater population groth … 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