Migration and productivity in Australia

Abstract

It is widely acknowledged that productivity growth is central to national prosperity and improvements in living standards and that migration to Australia has been a major influence on the economy and society. Despite its importance, the relationship between productivity and migration is relatively unexplored in Australia. This report responds to this knowledge gap by evaluating conceptually and empirically productivity-migration linkages. Over the past few decades, overall numbers of migrants to Australia have increased and their countries of origin have diversified. The proportion of skilled migrants compared to migrants coming for family reunification, or on humanitarian grounds, has also increased. Temporary migration has risen substantially, and along with it, the numbers of migrants who progress onshore to permanent migration from a temporary visa have grown. Over the same time period, Australia’s productivity performance has varied markedly. For instance, the ‘surge’ in productivity growth of the 1990s was followed by a productivity ‘slump’ in the 2000s. In this report, we look carefully at the factors that underpin productivity growth and focus on the relationship between migration and productivity.