1. Designer Immigrants? The Impact of the Study-Migration Pathway in Australia 1999-2016 Lesleyanne Hawthorne PhD Professor – International Workforce Metropolis Conference: 3-5 March 2016 Toronto

2. The Role of Governments Establish and (attempt to) manage migration policy Ruhs (2014) ‘The Price of Rights’: ‘The role of nation states is to decide ‘how to regulate the number, selection and rights of migrant workers admitted in order to achieve a core set of four inter- related and sometimes competing policy goals’: Economic efficiency Distribution National identity Social cohesion AND: Canada, Australia, New Zealand = Nation-building

3. 1.Bilateral/ multilateral agreements 2.Temporary labour migrants (sponsored) 3.Permanent skilled migrants (sponsored /independent) 4.International students 5.Family and Humanitarian category migrants The Policy Challenge – Which Migration Pathway/s to Prioritise? And What Does Each Deliver?

4. Policy Attraction of the Study-Migration Pathway: ‘Designer Immigrants’? Potential productivity premium: Young Self-funded education (economic ‘win-win’) Host country language ability and qualifications Acculturation Length of future productivity – age relative to labour migrants Demographic context by 2005: ‘Over the next couple of decades nothing will impact on (member) economies more profoundly than demographic trends and, chief among them, ageing’ (Chief Economist, OECD)

5. Assumed Attributes of International Students As Skilled Migrants (eg Germany + Canada) GERMANY - Mayer, M ET AL (2012) Mayer, M, Yamamura, S, Schneider, J & Muler, A (2012), Report for Federal Office for Migration and Refugees and European Migration Network Former international students ‘possess skills which can considerably accelerate their social and economic integration’, in a context where the decision to study abroad is ‘a signal’ to employers ‘that they can establish themselves and thrive in foreign contexts’. CANADA - Belkhodja, C (2011) ‘Introduction’, International Migration: The Emergence of the Global Student Former international students hailed as ‘….actors that can increase the economic competitiveness and creativity of their host community. They can become agents of development for an economy seeking greater participation in a more competitive global market, particularly in economic sectors such as new technologies… and services… A dynamic element that can allow small homogeneous areas to move towards intercultural understanding and internationalization.’

6. Students as a Potential Source of Supply: Scale and Growth of Tertiary Enrolments by Major Host Country (OECD 2014) Host Country 20052011 2011 % of Tertiary Enrolments 2011 % From Asia 2014 National Fertility Rate United States590,200709,6003.471.72.06 United Kingdom318,410419,90016.851.91.90 China141,100292,6000.987.41.55 France236,500268,20011.921.81.94 Australia177,000262,60019.880.71.77 Germany*177,800176,7006.431.41.43 Japan125,900151,5003.993.31.40 Canada75,500106,3007.454.11.59 Singapore66,00091,500N/A 0.80 Malaysia#44,40090,000N/A 2.58 Italy44,90073,5003.722.81.42 Korea15,50062,7001.994.11.25 Spain17,70062,6003.24.41.48 Switzerland*31,70041,80016.210.51.48 New Zealand40,80040,90015.667.92.05 Netherlands26,40038,4004.915.91.78 Czech Republic18,50038,0008.59.81.30 Sweden18,90036,5007.946.01.67 Greece15,70032,8005.046.11.41 Turkey18,20031,1000.857.02.08

7. Value to Host Governments/ Institutions: Earnings From the Study-Migration Pathway ‘Win-win’ of export education: 2005 value: US = $US14.5 billion UK = E7.5 billion annually from international students Australia by 2010: Nation: Export education = third top industry State: Top industry for Victoria University: 23% of IS enrolments at University of Melbourne generate more funds than all 77% of domestic students combined Faculty: Medical faculty generates $A40 million a year (1600 international students) Australia by 2014: $A17 billion and rapidly rising

8. Latest International Student Enrolments in Australia: Year to November 2015 Numbers: 641,000 Annual growth: 10.3% (average of 6% pa past 10 years) University sector: 42.4% of enrolments Main markets: China (36%) and India (13%)

9. Potential Value to OECD + Other Host Governments: Study-Migration Pathway Adjunct ‘workforce in waiting’ 2010 numbers:4.1 million tertiary international students 2025 prediction:7.2 million Typical age: 24 years on graduation Working life:40+ years? OECD (2014): International students: Now dominate migration flows Asia as a source: 1.6 million Asian nationals in OECD countries Retention: 15-30% of international students remain in host country following graduation Advantage (in addition to youth): Relative to offshore migrants: Capacity to bypass skills discounting and economic marginalisation

10. Rationale? Labour Market Challenges Facing Offshore Migrants – Case Study (Medical Migration to Australia) Age on arrival = older: 57% of migrant doctors re-employed in medicine within 5 years Impact of mandatory English testing Results by field 2007-2011 – 62% of dentists, 52% of doctors, 38% of pharmacists but just 17% of nurses pass on 1 st or multiple attempts Results by source country – Worst for Asian non-Commonwealth candidates (eg Philippines) Impact of age on performance in Australian Medical Council exams (analysis of 27 years of data): Older candidates do far worse (most source countries), eg South & Central America: Candidates aged >32 years: 73% pass Candidates aged <37 years: 38% pass

11. Compared to International Medical Students: ‘The Productivity Premium’ International students as an alternative source of supply: By 2011 78% retained (around 4,000 enrolled) Their employment outcomes @ 4 months: 99% fully employed Compared to international medical graduates: 57% employed in medicine within 5 years of arrival (all immigration categories) Future displacement of ‘offshore’ medical migrants? Statistics Canada (skilled migrant outcomes all fields): By the early 2000s, ‘skilled class immigrants were actually more likely to enter low-income and to be in chronic low-income than their family class counterparts’ with half of all chronically poor immigrants ‘in the skilled economic class’ (Picot & Coulombe 2007)

12. Australia: Employer Demand for International Students Compared to Offshore Migrants? 1999: Study-migration pathway established Scale: Student enrolments surge (from 150,000 to 641,000 by 2015) India: New market, 66% of all students migrate by 2005 China: Top source, 38% of all students migrate by 2005 Potential win-win:  By 2010: 23% of international students at the University of Melbourne generate more funding than all other students  Medical Faculty: Earns $A40 million per year

13. Protective Value of Australia’s Study-Migration Pathway by Select Source Country: 2007 Employment Outcomes @ 6 Months

14. Australian Employers’ Preferred Place of Selection – Facilitating Two-Step Migration (2011-12, All Fields)

15. BUT – 2006 Skilled Migration Review Findings (Birrell, Hawthorne & Richardson) Former international students by 2006 have: Annual salaries of around $33,000 (compared to $52,500 for offshore arrivals) Average weekly earnings of $641 (compared to $1,015) Lower job satisfaction, with 44% liking their work (compared to 57 per cent) Far less ‘often’ use of formal qualifications in current work (46% compared to 63%)

16. The ‘Dumbing Down of the Study-Migration Pathway: Indian Student Case Study (2002 to 2008) Context: Impact of Australia’s mining boom and 20-25 points for priority occupation Enrolments – a different echelon arriving 2006+? 65,377 (June 2008) cf 93,387 (China) Universities of choice: Lowest ranking Indian student sector of enrolment: Dramatic shift to private training and technical sector June 2008: 36,045 in vocational sector compared to 21,111 in degrees (1,827 in voc. sector 6 years earlier + 6,575 in degrees) (China = 18,808 in voc. sector compared to 41,812 in degrees)

17. Policy Measures 2007-2014: Fine-Tuning the Study-Migration Pathway 2007: Higher English standards required for all skilled migrants, with few exemptions 2008-12 - Removal of perverse study-migration incentives 1. QA review of all export education sectors 2. Agent and provider ‘crack-down’ 3. Changed Skilled Occupation List 4. Review of skilled migration points test 5. English level, level of university qualification = top points 6. Priority processing and employer/ state sponsorship key determinants of selection 7. Guaranteed post-study rights to stay/work (2-4 years for degree- qualified international students only) Initial impacts: Decline in enrolments (especially private vocational sector) BUT resurgence of tertiary sector enrolments

18. FINDING 1: Employment Outcomes for Former International Students @ 6 Months Compared to Offshore Economic Migrants 2009-2011 (Immigration Department Data) Visa Reporting Category Skilled Job Other Job Not Working Working Full-time Particip. Rate Unemploy.Median Full-time Earnings 6 MonthsJob($'000) Employer Sponsored 907392980.571.3 Family/State Sponsored 603197298750.0 Offshore Independent 7512 76971074.6 Onshore Independent 553786998644.4 Skilled Graduates 583656598340.0 Other Skilled4733206186743.0 All Skilled682487596552.0

19. FINDING 2: Employment Outcomes for Former International Students @ 6 Months Compared to Local Student Graduates 2009-2011 (Hawthorne & To 2014) Survey sample: International students: 80,000 Domestic students: 372,000 11 fields assessed: Sustained demand: Medicine, dentistry, nursing, pharmacy, physiotherapy Over-supply: IT, accounting, business & commerce Variable demand: Engineering Modest demand: Education, law Employment outcomes @ 4 months: Compared by field, qualification level, language background, source country, wage Key findings: 1.The importance of demand by field 2.Employer preference for native or near-native speakers of English (domestic + international students!)

20. Impact of Demand by Field on Former International Students: Full- Time Employment Rates 6 Months After Completing Australian Bachelor Degrees Compared to Domestic Students (2007-11) Qualification FieldAustralian Graduates (Sample = 371,000) International Students (Sample = 79,000) Accounting83%35% Business76%40% IT78%42% Engineering86%44% Medicine100%99% Dentistry94%96% Pharmacy98%96% Physiotherapy94%67% Nursing92%71%

21. The Impact of Demand on Masters Degree Students: International Student Full-Time Employment Outcomes by Select Source Country and Field Asian Students All Fields: China – 32% India – 45% Malaysia – 45% Indonesia – 36% Accounting: China – 29% India – 47% Malaysia – 43% Indonesia – 35% Canada/ USA Students All Fields: Canada/USA – 71%

22. FINDING 3: Rationale for Prioritising Selection of PhD Graduates (as in the US) Full-time employment at 4 months for international compared to domestic students with PhD qualifications: 1.Engineering: 81% (compared to 88% of domestic students) 2.Law: 80% (89%) 3.Medicine: 78% of international students (93% of Australians) 4.Information technology: 78% (80%) 5.Education: 71% (91%) 6.Business and commerce: 69% (90%) 7.Accounting: 70% (97%) 8.Dentistry: 67% (93%) 9.Pharmacy: 64% (87%)

23. International Student Migration Pathways: Current Australian Options Post-study stay+work rights:  Bachelor = 2 years  Masters = 3 years  PhD = 4 years 2014-15 Permanent Economic Category Intake: Total = 128,550 (out of 203,000 migrant/ refugee places)  Employer-sponsored = 48,250  Independent (points tested) = 43,990  State/regional sponsored = 28,850  Business innovation + investment = 7,260  Distinguished talent = 200 2014-15 Temporary Worker Intake = uncapped!

24. Value of the Study-Migration Pathway by June 2014: Where Did Australian Employers Recruit Economic Migrants by Select Field? Permanent Skilled Science professionals = On-shore: 49% Computer professionals = On-shore: 37% Engineers = On-shore: 35% Doctors = On-shore: 29% Temporary Skilled Stock Science professionals = On-shore: 58% Engineers = On-shore: 40% Doctors = On-shore: 35% Computer professionals = On-shore: 22%

25. Who is Most Likely to Participate in Two-Step Migration in Australia: Temporary Foreign Workers or Former International Students? (2014-15) Temporary foreign workers (457 visa 4+ years): Scale: 4,388 PA’s Status: Professionals (89%), Trade workers (9%) Former international students: Scale = PA’s 6,136 Status: Professionals (74%), Trade workers (12%)

26. Latest Data to June 2015: Where Did Australian Employers Recruit Economic Migrants (ENS Sub-Category Primary Applicants)? Permanent = 22,098 PAs (2014-15) On-shore = 20,028 (91%) Top source countries: UK (22%), India (17%), Ireland (10%), Philippines (8%), China (6%) Off-shore = 2,070 (9%) Top source countries: UK (23%), India (13%), China (19%), Ireland (4%), Philippines (3%) Temporary Stock = 38,134 (2014-15 Stock Resident) On-shore = 18,510 (49%) Top source countries: UK (20%), India (17%), Ireland (9%), China (8%), USA (5%) Off-shore = 19,624 (51%) Top source countries: India (32%), UK (15%), USA (8%), Philippines (6%), South Africa (2%)

27. Economic Category Pathways: Which Do Former International Students Use for Two-Step Migration? (2008-09 to 2014-15) Category 2008–092009–102010–112011–122012–132013–142014–15Total Skilled Independent8,0283,93411,9059,5828,5762,8713,14248,038 Skilled Regional2,0375763,5412,4962,7931,31334013,096 State/Territory Nominated 1,7981,1812,0501,5001,4659641,33010,288 Employer Sponsored5653321,2041,9022,2131,4741,2918,981 Business Innovation and Investment 117724691813149 Distinguished Talent1518517291620120 Grand Total12,4546,04818,71215,52115,1456,6566,13680,672 Source: Carl Higgs and Department of Immigration and Border Protection data, 2008-09 to 2014-15

28. Australia’s Experimentation: Take-Home Policy Points on the Study-Migration Pathway 1.Student interest:  Massive, and responsive to policy framework 2.Employer interest:  Strong but judicious (weighing merits of former international students with mature experienced offshore applicants) 3.Key issues determining former students’ employment outcomes:  English ability  Quality of training (Australia and offshore)  Demand by field 4.Government responses:  Refine the study-migration pathway (QA oversight, English levels)  Focus on degree graduates (not lower qualifications)  Provide certainty of stay (2-4 years for graduates)  Prioritise + fast-track employer selection (permanent + temporary pathways)

29. Global Potential of International Students: The Productivity Premium Traditional population structureEmerging population structure