Generous post-study work rights help attract international students but can undermine their work and migration prospects by intensifying competition for limited jobs and residency visas, Australian research suggests.

An analysis of the impacts of a 2013 boost to international graduates¡¯ work rights discerned no immediate effect on their income, the types of jobs they secured or the characteristics of the firms that employed them. But their chances of remaining in the country long term declined.

¡°Migrants did not earn more, nor work in higher-productivity firms, or have higher chances of transitioning to permanent residency,¡± says the by the e61 Institute economics thinktank. ¡°In fact, they were less likely to remain in Australia three years after graduation, suggesting that longer stays may have increased competition for a fixed number of permanent visas.¡±

The impacts were even less positive for people who had applied to study in Australia after the changes were announced. The average post-degree earnings of this subsequent wave of students declined steadily, even though they tended to land jobs requiring higher levels of skill and education.

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The lower earnings could result from both ¡°wage discrimination¡± and ¡°market dynamics¡±, the paper speculates. ¡°As more migrants remain in Australia under extended post-study work rights, the supply of skilled labour increases, potentially intensifying competition for a limited number of high-paying roles. This competition may dampen wage growth, even as migrants secure better-quality jobs.¡±

Lead author Silvia Griselda said extended work rights were beneficial to universities but not individual graduates. ¡°Increasing the length of post-study work rights does not improve the labour market outcomes of migrants,¡± said Griselda, research manager of the e61 Institute¡¯s Education and Human Capital Unit.

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¡°It creates kind of a bottleneck where a lot of these people are now looking for [the] opportunity to stay in Australia permanently, but the number of places to stay permanently has not increased or changed. It¡¯s a little bit useless to give migrants the opportunity to stay in Australia two additional years after they study, if they cannot stay here any more...after that.¡±

The study analysed rule changes following the 2011 Knight Review of the student visa programme. The then Labor government introduced a temporary graduate visa which increased the work rights of international university students by between six and 30 months, depending on the level of their qualifications.

Labor announced further extensions to work rights following its 2022 re-election, but changed its mind in late 2023 after its migration review identified a ¡°growing cohort of ¡®permanently temporary¡¯ former international students¡± in Australia.

The e61 paper highlights the need for graduate work rights to align with migration objectives and labour market needs. ¡°These policies must be part of a more integrated strategy that supports not only temporary retention but also long-term settlement and success,¡± it says. ?

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Griselda said it was difficult to ¡°generalise¡± her findings to other countries, even though studies in the UK and Canada had also found that international student recruitment was boosted by extensions to work rights. ¡°It depends a lot on the institutional context,¡± she said.

john.ross@timeshighereducation.com