This paper contributes to literature on migrants’ labor market outcomes by examining how the employment, occupation, and income of foreign-born graduates of Australian universities differ depending on the country of origin. Furthermore, the study explores how these outcomes are related to two key characteristics of migrants’ origin–cultural and linguistic proximity to the host society, Australia.
The findings from statistical modelling show that Australian-born graduates tend to have some of the best labor market outcomes. Only graduates from regions that are culturally or linguistically closest to Australia (chiefly, from North America, New Zealand or the UK and Ireland) fare equally well, or sometimes even better than Australian-born graduates. However, thanks to the unprecedented scale of the data, our analysis revealed heterogeneity within the broad geographical regions, with large differences across countries within regions. The main analysis helps establish the importance of non-cognitive and non-economic factors in socioeconomic outcomes. Our analyses show that cultural proximity to the destination country (Australia) emerges as a factor that can help to explain these cross-country differences among permanent migrants who graduated from Australian universities. It was associated with better labor market outcomes. In turn, the results for linguistic proximity are more nuanced, with positive associations only for selected outcomes and age-at-arrival groups. Furthermore, our findings demonstrate that age at arrival moderates the relationship between cultural and linguistic proximity and labor market outcomes. Specifically, the estimated effects of linguistic and cultural proximity are weaker for individuals who arrive early in their lives.
The findings call for investment in solutions that eliminate migrants’ disadvantage in that labor market, which could be targeted at migrants from specific regions.