Short-term fix or remedy for market failure? Immigration policy as a distinct source of skills

Abstract

This article analyses the role of immigration policy as a distinct source of skills supply in liberal market economies. It draws upon interviews with representatives of employer associations and trade unions in the Australian construction and hospitality industries to identify how labour market actors make sense of the function of immigration policy. Rather than ‘complementing’ or ‘undermining’ training and other domestic labour market institutions, as is often assumed, immigration policy can serve to remedy the systemic failures of these institutions to supply skills in the short term. However, overreliance on immigration can disincentivise reform of the labour market institutions necessary to generate adequate skills supply in the long term. The findings suggest the need to reconceptualise the function of immigration policy in terms of its distinct rather than equivalent functions to labour market institutions.