Abstract
Using data from Australia during the commodity cycle 2001 to 2015 as a quasi-natural experiment, we explore a mutual relationship between employer-sponsored (permanent) and points-based immigration. We find that the commodity boom triggered significant wage growth in commodity-rich states, suggesting higher demand for workers. Employer-sponsored immigration varied in line with commodity prices, with commodity-rich states witnessing greater growth rates than commodity-poor states. The evidence does not support a similar trend for points-based immigrants. Moreover, employers located in commodity-rich states reduced sponsorship in the post-boom period. The evidence suggests that employer-sponsored schemes can complement points-based systems, in alleviating local labour shortages.
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