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 In 2061, the bulge remains in the working Dark = 2061 ages. Light = 2011 Source: ABS 2013. Population Projections, Australia . ABS Catalogue No. 3222.0

% Difference in the 2051 Population Projected by ABS in its 2003 and 2013 Projections, by Age Group % Migrants get old just like 90 everyone else. Yes, but they 80 are much younger than the OZ population when they 70 arrive and they have babies 60 before they get old. 50 40 30 20 10 0 0-9 25-34 35-44 65-79 80+ Total Age Group

Ratio of Population Aged 15-24 in 2050 to Population Aged 15-24 in 2010 1.6 Australia has a higher growth rate 1.4 of the labour force entry ages than 1.2 all of these Asian nations 1 0.8 0.6 0.4 0.2 0

Per Cent of Population Aged 65 Years and Over in 2053 Under Varying Assumptions of Annual Net Overseas Migration Level of Net Overseas Per Cent of Population Migration 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? 25000000 0 100 180 300 23000000 21000000 19000000 Net migration of zero 17000000 means no future growth of the 15000000 Australian labour force 13000000 11000000 2012 2015 2018 2021 2024 2027 2030 2033 2036 2039 2042 2045 2048 2051 2054 2057 2060 Constant labour force participation rates; Migrants assumed to have Australian labour force participation rates

GDP per Capita Growth Rate (2013-2053) under different levels of net overseas migration Annual 1.9 0 100 180 300 Growth 1.8 Rate of 1.7 GDP per GDP per Capita is Capita 12% higher in 2053 1.6 with 180K migrants % compared with zero 1.5 migrants – due only to the impact of 1.4 migration on age structure 1.3 1.2 2013 2015 2017 2019 2021 2023 2025 2027 2029 2031 2033 2035 2037 2039 2041 2043 2045 2047 2049 2051 2053 Assumption: Migrants have same labour productivity as other Australians: 1.6%

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 500 Migration TOTAL 2011-2016 400 Population 300 Growth – no migration 200 Participation 100 0 -100 15-24 25-54 55+ -200 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 Migration yields a Without With much younger age distribution for Migration Migration employment <55 years -143 452 55+ years 268 286

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