2026 General Seminar no. 8 - Peter Varela (ANU Crawford)

Title: Labour market ‘matching’ and ‘downskilling’ in the Australian migration program

by Peter Varela

Abstract:  Using administrative tax and visa data, we introduce a novel approach to measure the extent to which Australian migrants work in their nominated occupation (matching) and work at a lower skill level (downskilling). We find substantial variation in migrant outcomes across nominated occupations, which can’t be explained by other migrant characteristics. We also show that employer sponsored migration typically results in better skills utilisation, with notable exceptions in health. This analysis suggests that policies that shift visas towards occupations with lower downskilling rates and tailoring employer sponsored and independent visas towards labour markets with higher levels of skills utilisation would significantly improve the economic outcomes of the Australian skilled migration program. Our analysis also suggests that discrimination, occupational barriers and lack of demand for labour play a less important role in migrant downskilling than previously thought.