Australian immigrants are elevating wages through migration – Here’s how

International research on Australia's immigration intake uncovered that migrants arriving in the country enhance productivity and increase wages for all locals, particularly those with lower skills or less education. 

Amidst an ongoing immigration debate fuelled by a surge in arrivals over the past year, four OECD research papers highlight that regions in Australia experiencing higher migrant inflows yield an economic gain of nearly $1500 per person. 

In the 12 months leading to September's end, net overseas migration soared to a record 518,100 individuals, propelling overall population growth to 2.4 per cent, its highest level in fifty years. 

Of these migrants, over 174,000 settled in New South Wales, primarily in Sydney, while Victoria welcomed another 154,000, predominantly to Melbourne. The recent surge in migration, largely due to returning international students completing their studies disrupted by COVID, has exacerbated the tight rental market, pushing vacancy rates to record lows across major capitals. 

New OECD research, based on payroll records of 27 million individuals from 2011 to 2018, coinciding with a net migration of 1.7 million into Australia, reveals regions with higher migrant influxes tend to exhibit elevated productivity levels. 

This heightened productivity is attributed, in part, to migrants settling in these areas. Approximately 60 per cent of Australia's migrants possess tertiary education, compared to around 40 per cent of the native-born population. 

Additionally, migrants arriving in Australia boast significantly higher tertiary education levels than those in other countries. According to OECD findings, an average one percentage point increase in the migrant share correlates with a productivity boost of $1490 per person.