Migration to Australia is arresting an economic crisis brought by an ageing population, according to a leading researcher.

Melbourne University demographer Peter McDonald has told a conference in Melbourne that but for immigration, Australia’s population would be ageing faster than it is.

Professor McDonald told the recent Melbourne Institute Economic and Social Outlook Conference that migration is transforming the age profile of the labour force, with young migrants, predominantly in their 20s, accounting for 80 per cent of the growth in the workforce in the past five years.

He said employment grew by 730,000 people between 2011 and last year and, of this, 600,000 were migrants arriving in that period.

Professor McDonald told the conference that without migration there would have been no increase at all in the number of workers younger than 55 over the past five years.

‘All the workforce growth would be at ages 55 and over. The migrants coming in at a young age change the age structure of the labour force,” he said.

“Most of the other growth is older women increasing their participation rates, while the population is increasing at older ages,” Prof McDonald said.

He said that older and younger workers most of the time are not substitutes, they’re complements.

“Younger workers have the hi-tech skills while older workers have the experience. It’s a good thing to have the mix,” he said.

Prof McDonald said the main issue with unemployment was those who have been without a job for an extended period and that migrants are not in the same labour market as people who don’t have jobs.

“There are some areas where there is competition between migrants and non-migrants but the main picture is not that. Unemployed Australians are largely people who are very low-skilled,” he said.

“They are early school dropouts. Sometimes they get jobs in a boom period, when labouring jobs increase, but most of the time they stay out of the workforce,’ he said.

Professor McDonald’s remarks came as the federal government has announced changes in visas and citizenship application standards and in the wake of unions and some industry groups claiming too many skilled workers from overseas has meant fewer jobs for Australians.

Dr Barbara Broadway, also from Melbourne University, told the conference that tougher standards for visas could be good for the labour market.

“Tests measuring the aptitude of workers applying for visas under skilled migration schemes should be standardised across government and employer sponsored programs,” she said.

“This would even out discrepancies between the systems and a perception that overseas workers being sponsored by an employer face a lower bar.

“An employer sponsor uses a different test compared to the government and it’s difficult to defend. It’s too easy for employers to sponsor migrants because the test is pretty slack,” Dr Broadway said.

She said unemployment rates, particularly among local, low skilled workers, could possibly be addressed by changing the policy settings.

Laurie Nowell
AMES Australia Senior Journalist