Since the 1990s, Australia’s migration system has targeted migrants who bring productive skills. However, it is clear Australia is not making full use of their knowledge, skills and education. Previous CEDA research uncovered high levels of skills mismatch among permanent skilled migrants. It found that nearly a quarter were working in a job below their skill level.4 Widespread skill shortages in wake of the COVID-19 pandemic mean it is even more critical that we make the best possible use of migrants’ skills. Australia is missing out on a substantial productivity benefit by failing to do so.
A core objective of the Federal Government’s 2023 Migration Strategy is to raise living standards by boosting productivity and meeting skills shortages. Skills mismatch contributes to the gap between the wages of recent migrants and those of Australian born workers, and this has continued to grow.
This report explores how Australia is failing to fully utilize the skills and knowledge of migrants, despite targeting skilled workers through its immigration system. It provides recommendations to improve labour market outcomes and reduce the wage gap between recent migrants and Australian-born workers.
