Many OECD countries choose selective immigration policies to increase the average migrant quality. Australia, New Zealand, and Canada have adopted immigration policies that aim to attract people with specific qualifications undersupplied in their local labor markets. Admission is based on documentation of language proficiency, educational attainment, occupational qualification, and health. Although recent theoretical work has helped to understand the consequences of selective immigration policies on migrant quality, relatively little is known about whether such policies achieve their desired outcomes.
In this study, we shed light on migrant quality in Australia using nationally representative survey data. We find that immigrants in Australia are remarkably positively selected in terms of their personality traits and cognitive ability. First-generation immigrants outperform non-immigrant Australians in extraversion, conscientious, openness to new experiences, and to some degree agreeableness. Some of these characteristics carry on to the second-generation who were born and raised in Australia. Australians with at least one foreign-born parent also have higher levels of openness to new experiences, conscientiousness, and agreeableness compared to Australians with two Australian-born parents. They perform also better on some cognitive ability tests, which are associated with high-levels of executive function. Despite higher levels of human capital, however, neither first nor second-generation immigrants outperform non-immigrant Australians in labor-market returns and occupational prestige.
Overall, we conclude that Australia has attracted an exceptionally high quality of migrants, both in terms of formal qualifications and unobservable characteristics. They have also passed on their favourable non-cognitive abilities to their children, who outperform non-immigrant Australians on a range of ability tests. Our findings demonstrate that concerns about the quality of migrants attracted to Australia are misguided and that in fact migrants to Australia possess an exceptionally strong human capital portfolio from which economic prosperity may be expected. Indeed, attracting high-quality human capital maybe one of the secrets for Australia’s sustained economic growth over the past 30 years.