The shifting labour market position of international graduates in Australia

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In the past two decades, attracting highly skilled foreign individuals has been proposed in many countries as a viable approach to redressing labour and skill shortages arising from falling fertility rates and an ageing population. Within this context, international graduates - more specifically - have been deemed a convenient and advantageous source of skilled labour owing to their local academic credentials and experiences. The desirability of attracting and retaining international graduates has contributed to the development and maintenance of post-study migration and employment pathways in many countries to retain these graduates following course completion. Nevertheless, international graduates have received less attention than other migrant groups in the scholarly literature. This thesis aims to advance current knowledge of international graduate retention by systematically documenting and examining the labour market performance of international graduates who remained in Australia between 1998 and 2015.Australia offers an interesting case study to examine the retention of international graduates and their experiences in transitioning to the host labour market. In addition to being a major destination country for international students, Australia maintains a front-running immigration framework designed to provide post-study migration and employment pathways. Further, there is rich and readily available Australian survey data on the employment and career progression of its tertiary graduates that remains under-utilised. Recent research has generated preliminary empirical evidence collectively pointing to an unfavourable labour market position of international graduates in Australia. Notwithstanding, little is known about patterns, trends and changes to their labour market experiences against a backdrop of evolving socio-political and economic environment. In addition, limited scholarly efforts have been dedicated to exploring their labour market integration from a geographical perspective. In this respect, this thesis studies the temporal evolution of international graduate retention in Australia with a focus on the labour market experiences of international graduates following the introduction of post-study migration and employment pathways in 1999. It also examines the influence of geographic mobility in shaping the integration of international graduates into the Australian labour market.Drawing on the Australian Graduate Survey, this thesis revealed that the number and percentage of international graduates who remained in Australia with the intention to work increased appreciably between 1998 and 2015. Nevertheless, recent waves of international graduates tended to come from non-English-speaking backgrounds, stay on with temporary visas and lack work experience, all of which have been reported to contribute to disadvantageous outcomes in the Australian labour market. Consistent with prior studies, this thesis pointed to poorer labour market outcomes amongst international graduates compared to domestic graduates, including higher levels of economic inactivity, unemployment, part-time employment and education-job mismatch. Importantly, the relative labour market standing of international graduates further worsened over the 18-year period, with a clear trend of rising economic inactivity, unemployment, part-time employment and education-job mismatch.Using Blinder-Oaxaca regression decompositions, this thesis linked the deteriorating labour market performance of international graduates to compositional changes in their Australian citizenship and residency status and paid work experience, as well as changes in the behavioural responses associated with these characteristics. The recent influx of non-native English-speakers also played a role, though the effect was relatively modest. Gaps in the labour market performance of international and domestic graduates primarily stemmed from compositional differences in their paid work experience, field-of-study choices and, to a smaller extent, language background. Specifically, the analysis attributed the disadvantageous labour market position of international graduates to their relative lack of paid work experience, in addition to their over-representation in Management and Commerce and under-representation in Education and Health.Given their deteriorating outcomes, the thesis subsequently tested the capacity of geographic mobility to enhance the integration of international graduates into the Australian labour market using treatment effects regression models. The flexibility to move across labour market regions was shown to help reduce the risk of education-job mismatch amongst international graduates, after accounting for the possible positive selection of mobile graduates. No evidence of gender differences was found. The effect of geographic mobility, however, was conditional on the socio-economic characteristics of the destination labour market. Specifically, international graduates who moved to Melbourne were more susceptible to field-of-study mismatch due to the large labour market and large migrant population in this metropolis.The empirical evidence gathered throughout this thesis highlights a need to review and strengthen existing policies and interventions to help international graduates integrate into the Australian labour market. Specifically, approaches aimed at improving discipline-related work experience amongst international graduates and informing their mobility and workplace decisions should be prioritised. More broadly, the empirical insights into the integration of international graduates into the host labour market generated in this project constitute a stepping stone for future work on international graduate retention in Australia and internationally.