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The Process Of Filling Labor Shortages

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Since 1997, Australia has been one of the most attractive countries to overseas students because of its truly world-class education, advanced economies as well as improvement in the setting of policies benefiting foreign students along with meeting the needy parts of its labor market. Policy changes during this stage include building links between international students and permanent skilled migration programs that has played a vital role in facilitating the growth of international students. With the future occupation on the Migration Occupations in Demand List (MODL), foreign students were able to gain addition points in a selection test for skilled migration application and were in the priority of the process. The MODL specified 106 occupations in categories ranging from Managers and Administrators, Professionals, Associate Professional and Trade Persons that were identified by the Department of Education, Employment and Workplace Relations (DEEWR), as being in short supply and in demand. Since 2010 Skilled Occupations List (SOL) has been introduced for revoking the MODL.

This new policy critically eliminated occupations that generated much of the growth such as computing professional, hospital pharmacist, cooking, etc., in the previous years. All applicants for independent skilled migration visas must now have relevant qualifications and skills to an occupation from the SOL. It is likely that what has been sold is the right to work and to remain in Australia, not the quality of education. According to the Department of Immigration and Citizenship (DIAC), the number of student visa holders increased annually with an average rate of 13.9 percent after 2001 and reached a peak of 320,000 holders in 2009. Since 2010 this number has always flutuated between 260,000 to 290,000 students. These students are considered as an important group of young and well-educated individuals who also want to stay temporarily for work experience or become permanent residents later.

The higher percentage of the unemployed whose skills and experience are able to get a particular job, the tougher it is to get work. The effort to make Australia being more attractive to foreign-born students, and support skills shortages have likely boosted the probability of unemployment to young native and raised the competition to first job entrants. Unemployed youth is the group most likely to be impacted by the appearance of non-native students, as these students are actively competing for jobs in the local labor markets. Moreover, while Australian at young age are quite sensitive of wage rate, international students even have motivation to work with non-wage. The percentage of Australian graduates hunting a full-time job in the information technology field increased by 11% to 30% from 2001 to 2004 as migrant students took part in (Kinnaird, 2005). Regarding to the research from Bureau of Statistics, by the end of 2014, the youth unemployment rate broke the record for the highest since 1997, while for new graduates the employment rate dropped to the lowest level over the period of the last 20 years. The reduction in employment is not the explanation for the increase in the unemployment rate over the past few years as employment has been improved at an average growth of 1 percent annually. But this growth could not match the growth in the labour supply that has risen around 1.4 percent every year (Reserve Bank of Australia, 2014).

As a result, the economic consequence of international students coming under these policies, the expected effects on opportunities for native workers in particular, is important for contemporary policy debate. Based on legislative changes above that are applicable to set up natural experiments, I would like to analyse the impact of international students on Australian opportunities to have a job and their job search duration in the occupations which do not intersect between MODL and SOL as compared with the outcomes from occupations still remaining on SOL after 2010.

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The question of whether these impacts are significant has recently been discussed in media and policy circles in Australia. However, there is currently no study conducted to figure out these causal effects. In the causal relationship area, the most relevant studies may support this issue is the economic impacts of immigration on the labor market. There is a vast amount of literature about the effects of immigrant inflows in Australia. Nonetheless, instead of investigating the impact of immigration on non-immigrant workers, the majority of analyses concentrate on the aggregate unemployment rate in general (Chapman & Cobb-Clark, 1999; Shan et al., 1999; Greasley et al., 2000). Immigrants can boost the aggregate unemployment, they can also bear the burden of

this increase that may enhance the employment chances of native workers at the same time. Winter-Ebmer and Zweimuller (2000) is one of exceptions, accomplishing to identify the positive influence of immigration on the unemployment duration. Nevertheless, there is no evidence of significant impacts of immigration on native workers in the investigation by Breunig et al. (2016). Similarly, McDonald (2017) finds that the immigrant is not the cause of pushing domestic job-seekers aged 15-24 out of jobs over the period between 2011 and 2016. The same conclusion is expressed for the prime working ages 25-54 although the migration accounted for 92 percent of a little growth in employment. The effect of international students on young native workers is considered having similar causal effects with the economic impacts of immigration on native-born workers. However, it is obviously irrational to simply apply the possible effects of immigration from above studies on the effect of international students due to their differences in inflow patterns and policies. Immigrants’s qualification acquired before they came to Australia can not create the same influence as similar qualifications obtained in Australia. Therefore, these reasons help motivate this analysis.

The data for the investigation is collected from Survey of Income and Housing (SIH) by Australian Bureau of Statistics and is restricted to 18-30 years old workers who participate in the labor force. This survey covers around 98% of people living in both Australian rural and urban areas with information about sources income, amount received, personal characteristics and so on.

The proportion of international student entering the workforce is different across occupations, states and time. Graduate students, first job entrants are likely to move among states. The differences in the labor market opportunities comply with different characteristics, the probability that someone is employed depending on explanatory variables such as age, sex, education, nationality, civil status and race group. In 2010, the beginning of SOL with some disappeared occupations is an advantage for identifiation the effect of international students on native opportunities. It introduces a discontinuity in the treatment is given by the exclusive occupations. The consequence is that the labor force from non-native students in those occupations decrease, driving less competition for Australian job seekers and shorter searching period. While without the elimination, the probability and duration of getting job across occupations would be the same.

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The Process Of Filling Labor Shortages. (2022, February 21). Edubirdie. Retrieved February 3, 2023, from
“The Process Of Filling Labor Shortages.” Edubirdie, 21 Feb. 2022,
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