Search Efficiency, Skill Transferability and Immigrant Relative Unemployment Rates in Australia

Using a search theory model and data drawn from the 1981 Australian Population Census, an examination of native and immigrant unemployment in Australia leads to 2 major conclusions. First, conventional search theory leads to very few unambiguous predictions, given the nature of the available data. In general, this is due to the likelihood of changes in the distribution of job offers associated with variations in the job arrival rate. Second, if the employment attributes of low-skill workers are valued relatively the same across countries, a search theory model predicts that such workers will have lower unemployment rates than low-skill natives. This contention is supported by the data. The analysis also shows that: 1. extra schooling translates to lower unemployment probabilities for all groups, and 2. immigrants from non-English-speaking nations will have higher unemployment rates than immigrants from English-speaking nations.