UNSW research finds refugees in Australia face substantially lower employment rates than non-refugee migrants, even five years after resettlement.
Humanitarian migrants (refugees) in Australia remain significantly less likely to be employed than non-humanitarian migrants, even after five years of resettlement, largely due to employer discrimination rather than any shortfall in skills or language, a study by UNSW researchers published in the British Journal of Industrial Relations has found.
Conducted by Dr Liwen Guo , Lecturer in Economics at UNSW Business School, and Professor Massimiliano Tani , from the School of Business at UNSW Canberra, the study showed differences in education and language explain some of the employment disadvantage faced by refugees in Australia, but the primary driver is discrimination by employers due to how they screen candidates when they lack reliable information about overseas qualifications or experience.
The study's lead author Dr Guo said: "Although relying on visible traits like race, age, or appearance may conflict with Australia's anti-discrimination laws , this kind of behaviour is usually subtle and informal. Employers do not say openly that they are rejecting someone because of their background; instead, when they are unsure how to judge overseas qualifications or experience, they fall back on 'gut feeling' and visible cues.
"Because there is no explicit statement or clear evidence of unequal treatment, it is treated as implicit rather than overt discrimination, and often falls below the threshold for legal action, but it still means that qualified refugees are unfairly screened out and their skills are discounted."
To address this, the researchers recommend building more inclusive job pathways for refugees, which they say isn't just the right thing to do - it's also smart economics, helping to create a stronger, more inclusive, and more productive society for all.
Refugees have poorer employment outcomes than non-refugee migrants
Combining data from two of the nation's most comprehensive longitudinal surveys: Building a New Life in Australia (BNLA) and the Household, Income and Labour Dynamics in Australia (HILDA) survey, the researchers analysed responses from 2155 humanitarian migrants aged 17-60 and 1602 non-refugee migrants of the same age range who arrived in Australia between 2013 and 2017.
The BNLA sample included refugees who were granted permanent visas through Australia's offshore and onshore Humanitarian Program, with approximately 84% referred by the United Nations High Commissioner for Refugees (UNHCR) or connected to Australia through family or community sponsorship. The HILDA sample provided a comparison group of non-refugee migrants who arrived in the same period.
The study revealed refugees were about 88 percentage points less likely to be employed than non-humanitarian migrants upon arrival, and even five years later, they remained over 51 percentage points less likely to have a job, highlighting a persistent and substantial employment gap.
"We found a persistent gap that is not fully explained by differences in education, English, or other observed characteristics like gender and age," Dr Guo said. "Refugees earn a lower return for the skills they have, meaning that they receive a lower payoff for the same degree or Australian training than other non-humanitarian migrants who arrived in Australia at the same time."
Dr Guo added that the persistent "discount" in how employers value refugees' skills channels many into precarious work environments. "This steers many refugees into long-term unstable or lower-paid roles, slowing not only their wage and career growth over time but also producing less tax revenue for Australia at large," she said.
The economic cost of wasted talent
This dynamic comes at a double cost: it harms people by adding to the challenges they face, and it sets the nation back economically. "Individuals face slower earnings growth and weaker attachment to stable work. The economy loses productivity, tax revenue, and innovation that diverse teams generate," Dr Guo said.
Poor employment outcomes have implications for mental health and wellbeing, as long-term job seekers experience limited access to secure income, training, and social support. By contrast, fair recognition of overseas credentials and mentoring initiatives within inclusive workplaces can help refugees rebuild social capital and contribute fully to the labour market .
Dr Guo said: "When qualifications are recognised and matched to roles, firms expand their effective talent pool and public returns to settlement investment rise through higher taxable income and faster integration. If you consider a 60% penalty on an average salary over a working life of 30 or 35 years, that is a lot of money.
"The loss to Australia is the lower income tax collected on that salary, and ensuing lower consumption and savings of migrants relative to what they could do if their earning gap was smaller," she said.
"Multiply this for the thousands who resettle in Australia, and this is a pretty large loss to the country."
Why employer bias persists
The researchers said the evidence is consistent with a strong presence of statistical discrimination, where individuals or groups are treated differently based on the average characteristics of the group to which they belong, rather than their individual qualities.
Prof. Tani said: "Employers often place too much weight on visible traits, such as a person's height or appearance, when they can't easily assess overseas credentials.
"However, the size and persistence of the employment gap suggest that it's not just about this missing information - refugees also face deeper barriers, such as employers preferring to hire from personal networks, requirements for local experience, and licensing rules that slow down recruitment.
"Employers can also say that they need someone with previous Australian experience and that cuts off most migrants."
Refugees often struggle to demonstrate their prior experience and qualifications from their home country. Organisations such as the UNHCR and the Refugee Council of Australia have long called for stronger employment services and action plans that encourage hiring refugees across diverse groups and industries.
Employers often place too much weight on visible traits, such as a person's height or appearance, when they can't easily assess overseas credentials.
What businesses can do
Businesses in Australia can play a leading role in breaking down these barriers by actively employing refugees and creating inclusive hiring pathways that recognise different cultural backgrounds and levels of English proficiency. Employers can also collaborate with government initiatives to access resources that support diverse recruitment and retention strategies.
Prof. Tani said: "Reducing uncertainty can definitely help here, but so can leadership from businesses and industry bodies willing to challenge outdated hiring filters.
"Two possible interventions seem to provide relevant benefits here. First, to normalise the use of employer-sponsored refugee pathways with fast-track credential recognition, provisional licensing, and supervised practice designed for the industry."
Australia has already trialled some similar initiatives with strong positive results. "The experience from the pilot programs introduced in Australia over the past five years seems overwhelmingly positive for both the sponsored and sponsors," Prof. Tani said.
The second recommendation focuses on how businesses approach the job search and hiring refugees. "We need to de-emphasise the 'local experience' filter that is often used by employers against recruiting migrants who are penalised by our own ignorance of what skills they have that can be gainfully employed in Australia's labour market," Prof. Tani said.
"For instance, use short trials designed with government and/or local industry groups to provide newcomers with the 'local experience' required by many recruiters. This can tell a lot about the 'hard-working-ness' of newcomers."
Prof. Tani said the university sector, which frequently employs staff in casual and part-time research roles, could also serve as a model for other sectors. "The university sector, which relies on short-term research assistant positions, can be an excellent industry to give highly educated refugees, of which there are many, the local credentials that prevent many employers from considering them in the first place."
An inclusive labour force is good for productivity
Tackling employer discrimination is not only an ethical responsibility but also essential for Australia's economic growth, the researchers say.
"When qualifications are fairly recognised, when skills are matched to opportunity, everyone benefits - the worker, the employer, and the broader economy," said Dr Guo.
In critical sectors such as health care, where skill shortages are acute, it makes little sense to overlook qualified individuals because their expertise and training were gained overseas.
"As Australia seeks to address its labour shortages and boost productivity growth, helping refugees find and retain jobs could contribute to building a more diverse and productive workforce," said Dr Guo.
