Decline in internal migration levels in Australia: Compositional or behavioural effect?

Abstract

AbstractLevels of internal migration have declined since the 1980s in many advanced economies. Australian studies remain largely descriptive, making it difficult to ascertain the extent to which the decline in aggregate levels of migration is due to shifts in the socio‐demographic composition of the Australian population or driven by deeper behavioural changes. This paper aims to address this gap by applying an Oaxaca‐Blinder decomposition method to individual‐level data from the 2001 and 2016 censuses. Our results confirm the strong impact of population ageing on the decline in migration although its effect has been fully counteracted by other compositional changes such as education and immigration. We find behavioural effects to be the principal factor explaining this downward trend. This finding points to a secular shift in migration behaviour and represents a starting point in developing a more comprehensive understanding of the factors underpinning the long‐term decline in internal migration in Australia.