Australia is a lucky country – central to this has been a perception that a ‘fair go’ exists regardless of where you live or where you are born. But economic opportunity varies across the country. This report investigates how the geographic distribution of opportunity has changed over the 21st century.

This report makes extensive use of micro data to follow the trajectories of workers of different occupations, ages, and locations to better understand how wages and housing costs vary between the cities and regions. It also identifies the migration flows occurring in response to changing locations of opportunity.

Key findings

• Movers to the city get an instant and permanent pay rise.
• Industrial workers, such as tradies and labourers, are increasingly paid more in the regions than in the cities.
• Knowledge worker jobs have doubled in the cities.
• Net benefit of city-living has fallen dramatically.
• Millennials are leaving the largest cities.
• Overseas immigration has offset the worker exodus from the cities.

Implications

• Risk of misallocation of labour: an outflow of young people from Sydney and Melbourne could reflect them moving from higher paying, or more productive job opportunities.
• Cities becoming less occupationally diverse: concerns around city-region income inequality, social cohesion and political polarisation seem to not have manifested so far. However, there is a growing income gap between city-based knowledge workers and other workers.
• Opportunity for the regions: Australia’s regional areas have the potential to continue to attract and retain more workers from the capital cities.