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The Effects of Immigration on Residents' Incomes in Australia: Some Issues Reconsidered

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  • Matthew W. Peter
  • George Verikios

Abstract

This paper outlines the standard neoclassical model (SNM) of the impact of immigration on the incomes of the resident (pre-immigration) population. We augment the SNM to allow for foreign ownership of and government equity in the capital stock. Using the expanded model, four back-of-the-envelope (BOTE) calculations are made. The calculations reveal that the size of the Berry-Soligo welfare triangle is small and is dominated by the effects of foreign ownership of capital and government equity in capital. In our preferred scenario, the BOTE calculation indicates that the 1991-92 Australian immigrant intake reduced residents' income. We believe the results of the BOTE calculations justify a more comprehensive study incorporating a range of other influential factors determining the impact of immigration on residents' income. We suggest a list of such factors and report on work done in these specific areas. Essential to a comprehensive study are the integration of results from studies in specific areas, and the devotion of resources to the tasks of further data collection and model development.

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Bibliographic Info

Paper provided by Victoria University, Centre of Policy Studies/IMPACT Centre in its series Centre of Policy Studies/IMPACT Centre Working Papers with number g-115.

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Date of creation: May 1995
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Publication status: Published in The Australian Economic Review, vol. 29, iss. 2, 1996, pp. 171-88.
Handle: RePEc:cop:wpaper:g-115

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Related research

Keywords: immigration; residents' income; capital mobility; government equity; Berry-Soligo effect;

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References

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  1. Clarke, Harry R & Ng, Yew-Kwang, 1993. "Immigration and Economic Welfare: Resource and Environmental Aspects," The Economic Record, The Economic Society of Australia, vol. 69(206), pages 259-73, September.
  2. Berry, R Albert & Soligo, Ronald, 1969. "Some Welfare Aspects of International Migration," Journal of Political Economy, University of Chicago Press, vol. 77(5), pages 778-94, Sept./Oct.
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Cited by:
  1. Daina McDonald, 2006. "150 Issues of The Australian Economic Review: The Changing Face of a Journal over Time," Melbourne Institute Working Paper Series wp2006n01, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
  2. Jaai Parasnis & Dietrich Fausten & Russell Smyth, 2006. "The Impact of Immigration on Native Workers in Australia," Development Research Unit Working Paper Series archive-40, Monash University, Department of Economics.

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