Tang, A., Perales, F., Rowe, F. & Baxter, J. (2021). ‘From Bad to Worse: Examining the Deteriorating Labour Market Outcomes of International Graduates in Australia’, Life Course Centre Working Paper Series, 2021-10. Institute for Social Science Research, The University of Queensland.
Download: Life Course Centre Working Paper 2021-10
Angelina Tang, Francisco Perales, Francisco Rowe, and Janeen Baxter.
International graduates are known to struggle in their transition to the host labour market after course completion. In line with research in other countries, incipient Australian evidence indicates that international graduates typically perform poorly in the Australian labour market compared to local graduates and high-skilled migrants recruited offshore. Economic inactivity, unemployment, part-time employment and education-job misalignment are more prevalent amongst international graduates; their job satisfaction and wage returns are also lower. Further, recent research suggests that the labour market outcomes of international graduates have worsened over time, resulting in widening gaps between their outcomes and those of domestic graduates.
Despite this emerging knowledge on the comparative outcomes of international graduates, existing work is limited in their scope and in their methodological robustness. For example, much of these studies focus on specific groups of international graduates (e.g., Chinese or Indian graduates) or fields of study (e.g., accounting, engineering or health). Further, most of the existing knowledge come from qualitative studies, whose findings cannot be generalised to the overall international graduate population. In this paper, we offer the most comprehensive account to date of the labour market outcomes of international graduates in Australia and identified the key factors driving their worsening labour market position. To address the shortcomings of previous research, we leveraged unique large-scale survey data from the Australian Graduate Survey encompassing the 2000-2015 period and fit-for-purpose econometric methods.
Our findings indicate that the worsening labour market outcomes of international graduates can be largely attributed to the decreasing share of these graduates who are a citizen or permanent resident of Australia. A fall in the share of international graduates with paid work experience was another major contributing factor, as was their under-representation in highly demanded fields of study. The growing percentage of international graduates who are non-native English-speakers also played a role, albeit a more modest one.
Our findings offer important lessons for policy and practice, challenging existing Australian policies on international graduate retention. First, our results shed light on the persistent labour market disadvantage of international graduates, despite stricter visa requirements on English language skills over time. Second, they suggest that existing policies on temporary retention are inadequate in promoting local discipline-related work experience amongst international graduates. Together, the findings call for better interventions to help international graduates integrate into the labour market – if Australia is to fully utilise
and benefit from their skills and knowledge.
A revised version was uploaded on Friday the 16th of July 2021 correcting an editing error.