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Modelling the Economic Impacts of Migration and Population Growth

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  • James Giesecke
  • G.A.Meagher

Abstract

The paper uses MONASH, a dynamic computable general equilibrium model, to investigate the impact on the Australian economy of a 50 per cent increase in the skilled migrant intake over the period 2005-2025. The primary purpose of the modelling it to identify how the labour market might absorb an increase in the number of skilled visa entrants. To that end, the modelling recognises labour supply by 67 types of skill (defined as an education field classified by an education level) and 81 occupations. We find that, even with the increase in immigration heavily weighted towards skilled visa entrants, the main effect of the policy is to increase the scale of the economy. The main compositional effects are to shift economic activity towards the construction sector and sectors supplying material inputs to construction activity, raise the relative wages of workers that supply labour used intensively in construction and related sectors, reduce the relative wages of skilled labour, and increase returns to capital relative to labour.

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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-157.

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Date of creation: May 2006
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Publication status: Published in Giesecke, J.A. (2006), 'The economic impact of a general increase in skilled immigration', People and Place, Vol. 14(3), pp. 48-63.
Handle: RePEc:cop:wpaper:g-157

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Keywords: CGE modelling; skilled immigration;

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  1. Bruce Headey & Mark Wooden & Gary Marks, 2004. "The Structure and Distribution of Household Wealth in Australia," Melbourne Institute Working Paper Series, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne wp2004n12, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
  2. W. Jill Harrison & K.R. Pearson, 1994. "Computing Solutions for Large General Equilibrium Models Using GEMPACK," Centre of Policy Studies/IMPACT Centre Working Papers, Victoria University, Centre of Policy Studies/IMPACT Centre ip-64, Victoria University, Centre of Policy Studies/IMPACT Centre.
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Cited by:
  1. Peter E. Robertson, 2007. "Reflections on Australia’s Skilled Migration Policy," Discussion Papers, School of Economics, The University of New South Wales 2007-22, School of Economics, The University of New South Wales.
  2. Rob Hodgson & Jacques Poot, 2011. "New Zealand Research on the Economic Impacts of Immigration 2005-2010: Synthesis and Research Agenda," CReAM Discussion Paper Series, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London 1104, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.

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