Australia must better recognise the international qualifications of migrants to help address crippling skills shortages, new research has found.
The Committee for Economic Development of Australia (CEDA) released a report on Wednesday showing the nation needed to make more use of the skilled migrants in the country.
It recommended increasing their access to English-language training and better recognising their qualifications and work experience obtained overseas.
The federal government has cracked down on net overseas migration in its overhaul of the system.
The report called for initiatives to tackle discrimination and prejudice to help improve employment outcomes for migrants.
CEDA senior economist Andrew Barker said recent migrants earned significantly less than Australian-born workers - something which has worsened over time.
"Weaker English skills and lack of skills recognition are preventing us from making the most of migrants' skills and experience, with discrimination likely also having an impact," he said.
"Many still work in jobs beneath their skill level ... ensuring migrants can use their skills within their first few years in Australia is crucial to addressing ongoing skill shortages across the economy."
Migrants who have been in Australia for up to six years earn about 10 per cent less on average than Australian-born workers.
Mr Barker said about $4 billion in foregone wages would be unlocked each year if migrants earned comparable salaries to their Australian-born counterparts.
Weaker English language proficiency reduced wages for recent migrants by about nine per cent on average, the research found.
Female migrants with a post-graduate degree had the worst outcomes, earning almost a third less than Australian-born women with similar education levels.
