How young, educated Asian migrants affect the Australian economy

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Chinese Property Buyer
The Sydney Opera House and Harbour Bridge can be seen behind real estate agent LuLu Sun (R) as she escorts Bao Fang, a potential buyer from Shanghai, during an inspection of a property for sale in the Sydney suburb of Vaucluse, Australia, July 11, 2015. Reuters/David Gray

New data shows that the profile of people arriving in Australia matters a great deal. The data is shown in a comparison by the Australian Bureau of Statistics of the age profiles of migrants from Asian and European countries.

Several Europeans who arrived in Australia in the 1950s and 60s are now retiring. The census indicates that 40 percent of European migrants are 65 or older and just 17 percent are currently under 35.

In comparison, the new cohorts of Asian migrants are young, with 48 percent under 35 and only 8 percent over 65. Migrants from Europe came as families with kids, while the majority of those from Asia are largely single and have come as students and temporary workers.

The current migration scheme on students and skills shows that education and age profile are more favourable compared to the resident population. According to the ABS data, 87 percent of the overseas-born population aged in their 20s finished Year 12. That is comparatively higher with only 73 percent of the Australian-born population.

Furthermore, Asian migrants are having kids here. Including their kids would show a bigger impact of Asian migration on Australia’s age profile.

Based on an estimate by University of Melbourne’s Peter McDonald, the share of the population of people aged 65 and older would climb to 28 percent from 14 percent by 2053 in the absence of migration. He explained that a typical 78-year-old costs governments $24,000 annually in service. Meanwhile, fewer 43-year-olds means bigger budget deficits.

According to The Australian, it is when retailers begin to lay off staff that a downward cycle between employment drop, confidence and spending gathers force. Out of 750,000 new jobs generated since 2011, McDonald estimates that 80 percent have been filled by new migrants. This could mean employment, and the economy would have stagnated without migrants.

Household expenditure per person have dropped. The influx of migration, however, meant retailers maintained staffing levels and total spending kept rising.

The ABS also released new population projections showing that in 2056, Australia would number somewhere between 35 million and 45 million people. The lower figure could mean overseas migration would be at least 200,000 annually while fertility rates could drop back to 1.6 babies per women from 1.85 babies.

The flow of migration makes differences to the Australian economy even in the immediate term. The country was welcoming 300,000 migrants when the global financial crisis hit in 2008-09.

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