Selection policy and the labour market outcomes of new immigrants

Deborah A. Cobb-Clark INTRODUCTION The increasing complexity of large-scale movements of people across international borders has policymakers grappling with difficult issues surrounding the design and implementation of policies meant to ensure that the potential benefits of immigration are realised for the host country.1 Selection policies - in which some potential immigrants are chosen over others - have historically been used, in conjunction with quotas on the level of immigration, as the primary means of achieving national objectives regarding immigration. Like Australia, other countries over the 1990s moved to place a greater emphasis on productive skills (including entrepreneurial skills) in the selection process. 2 These changes stem primarily from the belief that skill-based immigrants do better in some sense and provide greater economic benefits than immigrants admitted on the basis of their family relationships. This chapter updates previous research exploring the potential for selection criteria, income-support policy and labour market conditions to facilitate entry into the Australian labour market (see Cobb-Clark, 2003). That research assessed initial outcomes (six months after migration) and concluded that the substantially improved outcomes for new arrivals over the 1990s resulted largely from changes in selection policy that led to enhanced skills amongst new immigrants. Still, changes in labour market conditions and incomesupport policy - which most likely altered the returns to human capital - appear to have been instrumental in reinforcing the effects of tighter selection criteria. This chapter re-examines these issues at a later stage - 18 months after migration - of the settlement process. The question is: are immigrant outcomes….