International students are crucial to addressing Australia’s skills shortages, but many face barriers that limit their earnings and career prospects, a new analysis has found.

The new Jobs and Skills Australia (JSA) International Students Outcomes and Pathways Study shows vocational education (VET) graduates are more likely than university graduates to work in roles aligned with their studies, highlighting the need for a “system-wide view” of Australia’s education sector.

Even where international uni graduates do find work in Australia in their field of study and at their qualification level, the report found, they are likely to earn less than their domestic counterparts – with most success in a narrow range of careers, such as nurses and chefs.

International graduates transition most successfully into occupations characterised by ease of course access and completion; available visa pathways via skills lists; education settings that prioritise work readiness; and employer “appetite” for international graduates.

The finding comes after the government late last year escalated 456 priority careers spanning a range of industries – and confirms that current migration and education policy settings need improvement to address Australia’s “diverse current and future skills needs”.

“Strong post-study employment outcomes for international students are essential to meeting Australia’s skills needs over the medium to long term,” notes the study, which tracks experiences, work and educational outcomes of students studying in Australia from 2010.

An estimated 35 to 40 per cent of international students remain in Australia after completing their studies, the report notes, flagging their potential “to make a significant contribution” to filling yawning skills gaps if fully utilised and supported by a shared vision for the sector.

The report includes 11 recommendations to deliver this vision by “improv[ing] outcomes for international students as graduates” – including publishing sector and provider-level performance data, and building a long-term methodology for economic outcomes.

JSA also advises permanent migration reforms – particularly in terms of the number of points accrued for eight or more years of “relevant skilled work experience” – and closely monitoring the impact of reforms, such as a recent boost to overseas student numbers.

Identifying barriers to a smooth transition

International uni graduates’ ongoing challenges finding relevant work are due to, and compounded by, ongoing issues in areas such as English language proficiency, the report warned in flagging inadequate attention to language skills during recruitment and education.

Despite employers’ hunger to fill areas of skills shortages, the report also found that many employers are put off by “uncertainty toward temporary work visas” – with regular government policy changes boosting costs, creating confusion, and hurting skills pipelines.

This limits the uptake of graduates in skilled roles – an outcome long observed even among long-term Australian migrants – and is also hurt by a lack of “parity of esteem between international and domestic graduates” that should be addressed by employer education.

“Too many international graduates have faced barriers to participating fully in the labour market,” JSA deputy commissioner Trevor Gauld said, warning that “too often this is limiting the successful outcomes for students who remain in Australia.”

Those barriers also present “a missed opportunity for Australian businesses,” he added, noting that over half of international graduates “are employed below their skill level and earn less than their Australian-born counterparts, which is a less than desirable outcome.”

Improving international graduates’ economic value – in the long term

Australia’s international student numbers have long been a point of contention, with the overseas student body – which currently numbers 925,905, including 347,834 commencements in the year to July – a scapegoat for issues like rising housing costs.

While the international education sector is frequently said to be worth $50 billion to the Australian economy, those figures focus more on short-term benefits from fees and related inputs – and less on the long-term outcomes explored within the new JSA report.

The report offers new insight into tertiary outcomes spanning a period of considerable social and policy turmoil – including surges and cuts in international student numbers, governments’ changing university priorities and “unfair” policies, and the COVID-19 pandemic.

And despite targeted policy changes aiming to close Australia’s skills gap – such as a rule allowing international IT graduates to stay in Australia an additional two years – there is still much to be done before the benefits the business community and others are hoping for.