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Advanced Applied Economics

Student Name

Course No

Date
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Background and Significance

Australian immigrants are liable to low remuneration and unemployment unlike other

Australian born workers. According to research, Australia is known to have a high level of

immigrants for the past 50 years unlike to different organizations for sustaining economic

development and corporation. Over 29.8% of Australia population is known to be foreign.

Subsequently, ones that have immigrated within Australia are far much educated and much

skilled unlike the ones that are born in Australia. Based on recent statistics the labor force

within Australia is composed of foreign-born workers. Moreover, they are the main reason

for economic and labor force increase within the country (Clarke & Skuterud, 2013).

Similarly, the nation is considered to be perfect when it comes to holding on to foreign talents

although through integrating newcomers can be a challenge.

According to Card (1990), mismatch of skills is essential considering the features of

the new immigrants which renders them either employed or unemployed and they will have

low wages. On the other hand, the labor force for the Australian born tend to reduce based on

many workers ageing and hence they cannot work in an optimal manner. Within this report,

we have employed data acquired from a number of censuses in order to understand the

employment outcomes for each immigrant and the manner in which every outcome could be

reduced and awarded centered on their skills and experiences (Bevelander & Pendakur,

2013). Such an approximation sometime would not present a concise idea of supply and

demand for Australia but it enlightens in regard to minor adjustments and how positively the

economy would be impacted. The whole report explains immigration labor overview in the

country. Subsequently, it rationalizes the present immigrant wages with unemployment

focusing on the current accounts of the nation.

Hypothesis
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Research shows that work related and personal demographic are connected to self-

assessed over education. This study was taken to prove that over education is connected

to individuality. The presumption is that skill mismatch among labourers depends on the

demand of the job and the level of education. The result shows that 30% of the labourers

are female workers who are highly educated than the men. In view of Job-specific

features shows that the business hierarchy has no relationship with over education.

 Theoretic explanation

Over education is a spectacle that touches on youthful workers to a bigger extent, each year

the chances of an overeducated casual labourer negotiating power has decreased

tremendously to by 1%. The probability appreciated by 10% for the highly educated workers

who changed their careers frequently. Cultural differences has shown that 15% of the

immigrants who are permanent residents are over educated than the rest.

Methodology

This study will employ an analytical approach based on a framework presented by

Borjas (2003) in order to evaluate the effect of labor supply tremors on immigration within

the labor market for each pre-existing worker. The research paper uses national level data

acquired from 6 years of the Australian income survey from 2019 to 2021. Workers have

been grouped in skill groups centered on two major aspects of human capital they include:

experience and education. Worker’s grouping is dependent on implicit presumptions for

which even workers might have same levels of education, they tend not to be perfect

substitutes once they have different experience levels. On the same note, workers that might

have the same years of experience tend not to be perfect substitutes once they have dissimilar

education levels.
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Furthermore, people tend to be sorted into different education experience groups. For

this case, 4 distinctive groups of education levels are presented, which include: below high

school, high school, post school, and higher degree. Moreover, we additionally explain every

8 distinctive groups of levels of experience. The groups provide 32 groups for the five years

for which is presented 192 cells entirely. The paper has also employed sophisticated

explanations of experience with different variations pinpointed in the paper. Each model

involves more variables and limitations in order to assure variations for each dependent

variable which might be perfectly be attributed to variation from every immigrant’s supply.

Behavioral Insight

There is a strong debate on government to put out measures and policies on economic

and social integration. Australia is a liberal republic and has discouraged ethnic and religious

background to be the determinant of its immigrants. Australia has incorporated a communal

set of goal that is:

1. Improving a community cohesion and social integration - One of the main goals of

integration policy is to create an inclusive community where everyone feels like they

belong. Ensure community safety or boost individuals' perceptions of their

neighborhood's belonging. Addressing residential and educational segregation, as well

as developing social education through community projects, are examples of such

efforts.

2. Reducing social economic gaps and inequalities - Another key goal is to raise the

performance of underperforming groups in comparison to the societal average.

Women in Bangladesh and Pakistan, for example, have an unemployment rate of 5%,

which is more than three times that of men, and policies might try to decrease this

difference
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3. Ensuring equal access to the public realm. In many cases, leveling the playing field in

terms of outcomes guarantees that persons with diverse needs (such as language

proficiency) have equal access to government services. (JLO,2014)

Randomized Controlled Trial

Because most countries' normal statistical programs do not assess skills per se, skills

proxies such as qualification and years of school on the supply side and occupation on the

demand side are utilized. (JLO,2014). Behavioural insights can help people better understand

how they engage with one another and with government services, and they can lead to

evidence-based solutions that are aware of cognitive biases that might stymie social and

economic integration. Experts and policymakers have realized that differences in educational

life cannot be explained just by cognitive skills in recent years, thus character and non-

cognitive skills have gotten a lot of attention.

Framework policies

The value of framework rules on productivity and resource allocation is well documented.

Firms are finding it increasingly difficult to modify their labor force structure to solve the gap

between demand and supply of skills due to strict laws on terminating permanent employees.

First, such policies will allow high skilled people to be hired in high productivity enterprises

by preventing rent creation and boosting market selection (Pica and Rodriguez, 2005). 13

Second, they have the potential to improve market discipline, managerial quality, and reduce

mismatch.

Housing policies

Low rates of residential mobility can be a stumbling block to labor mobility and efficient

talent allocation in an economy. The efficient matching of employment and the allocation of
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human resources within the labor market is aided by residential and geographic mobility

(Henley, 1998).

Labour market and education policies

Other characteristics of labor market structures, beyond from EPL, may also explain

skill mismatch. Wage-setting systems that are too rigid may prohibit salaries from being

adjusted to skill mismatches. Mismatch should, in theory, result in a wage adjustment

because it influences skill acquisition decisions. Given the changing nature of the labor

market, both newcomers to the labor and those who have been there for a while must be eager

to learn new skills. Adult training and education are critical to meet changing talent needs

brought on by technological progress as well as other factors.

Conclusion

The findings indicate that disparities in skill mismatch among nations are related to

differences in the policy environment. After adjusting for job factors and individual, Lower

mismatch is also connected with more salary bargaining flexibility, stronger engagement in

lifetime learning, and higher management quality. Lastly, some policies (for example, EPL)

have been observed to disproportionately affect youth, which might have negative

consequences for their lifelong labor market results due to persistent skill mismatch, and

hence lower future productivity. Australia is today intricately tied to complex global

networks of business, cultural ties, government, travel, money, commerce, technology,

familial ties and knowledge exchange. The Department's management of the Migration

Programme, as well as associated activities and services, has been critical to Australia's

economic development, social peace and national security.

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Reference

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reunion immigrants: a comparison of outcomes in Canada and Sweden. Journal Of Ethnic &

Migration Studies, 40(5), 689-709. doi:10.1080/1369183X.2013.849569

Bonikowska, A., Hou, F., & Picot, G. (2011). A Canada-US Comparison of Labour Market

Outcomes among Highly Educated Immigrants. Canadian Public Policy, 37(1), 25-48.

Breunig, R., Deutscher, N., & To, H. (2017). The Relationship between Immigration to

Australia and the Labour Market Outcomes of Australian-Born Workers. Economic

Record, 93(301), 255-276. https://doi.org/10.1111/1475-4932.12328

Card, D. (1990). The Impact of the Mariel Boatlift on the Miami Labor Market. Industrial

And Labor Relations Review, 43(2), 245. https://doi.org/10.2307/2523702

Clarke, A., & Skuterud, M. (2013). Why do immigrant workers in Australia perform better

than those in Canada? Is it the immigrants or their labour markets?. Canadian Journal Of

Economics, 46(4), 1431-1462. doi:10.1111/caje.12059

Dustmann, C., Schönberg, U., & Stuhler, J. (2016). Labor Supply Shocks, Native Wages, and

the Adjustment of Local Employment*. The Quarterly Journal Of Economics, 132(1), 435-

483. https://doi.org/10.1093/qje/qjw032

Economics, R. B. C. (2011). Immigrant labour market outcomes in Canada: The benefits of

addressing wage and employment gaps. Current Analysis.

Edo, A. (2019). THE IMPACT OF IMMIGRATION ON THE LABOR MARKET. Journal

Of Economic Surveys, 33(3), 922-948. https://doi.org/10.1111/joes.12300

Kustec, S. (2012). The role of migrant labour supply in the Canadian labour market.

Citizenship and Immigration Canada.

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Migration, Australia, 2019-20 financial year. Australian Bureau of Statistics. (2021).

Retrieved 9 November 2021, from

https://www.abs.gov.au/statistics/people/population/migration-australia/latest-release.

Publications.iom.int. (2021). Retrieved 9 November 2021, from

https://publications.iom.int/system/files/pdf/wmr_2020.pdf.