Labour Market and Economic Impacts of International Working Holiday Temporary Migrants to Australia

Abstract

ABSTRACT This paper contributes to the scant literature on the labour market and on the economic consequences of temporary migrants to Australia under the Working Holiday Maker (WHM) programme. Data from two large surveys in 2008, one of WHMs and one of firms that employed WHMs, were used to evaluate the labour market and the economic impacts of WHMs by the application of descriptive analysis and econometric modelling. The analysis demonstrates that the net impact of WHMs is positive for the Australian economy and for employment by increasing the demand for Australian workers because WHMs spend more than they earn while in Australia. We estimate that every 100 WHM arrivals created about five net full‐time equivalent jobs in Australia. Moreover, the supply of WHM labour is of particular importance to employers in regional areas, especially agricultural enterprises who employ them to supply farm labour. More than half of WHM jobs in Australia were in two industries: ‘accommodation’ and ‘agriculture’. Nonetheless, the majority of jobs in which WHMs worked are low skilled, low paid, and in urban areas. In these jobs, WHMs compete with the local low‐skilled labour force and with local youth who seek similar types of jobs. To manage effectively Australia's migration and labour trends and to place the WHM programme in context, it is necessary to understand the increasing demand for short‐term casual labour and the associated lack of supply, especially in regional primary and urban hospitality industry. This paper adds to current understanding by examining these issues in detail. Copyright © 2011 John Wiley & Sons, Ltd.