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

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  • Matthew W. Peter
  • George Verikios

Abstract

This article 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, the sensitivity of residents' incomes to immigration is tested in four scenarios. Our 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 long‐run scenario, the 1991–92 Australian immigrant intake reduced residents' incomes. We believe the results based on the expanded SNM justify a more comprehensive study incorporating a range of other influential factors determining the impact of immigration on residents' incomes. 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

Suggested Citation

  • Matthew W. Peter & George Verikios, 1996. "The Effect of Immigration on Residents' Incomes in Australia: Some Issues Reconsidered," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 29(2), pages 171-188, April.
    • Handle: RePEc:bla:ausecr:v:29:y:1996:i:2:p:171-188
    DOI: 10.1111/j.1467-8462.1996.tb00923.x
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    References listed on IDEAS

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    1. Pope, David & Withers, Glenn, 1993. "Do Migrants Rob Jobs? Lessons of Australian History, 1861–1991," The Journal of Economic History, Cambridge University Press, vol. 53(4), pages 719-742, December.
    2. repec:bla:ecorec:v:69:y:1993:i:206:p:259-73 is not listed on IDEAS
    3. Berry, R Albert & Soligo, Ronald, 1969. "Some Welfare Aspects of International Migration," Journal of Political Economy, University of Chicago Press, vol. 77(5), pages 778-794, Sept./Oct.
    4. Harry R. Clarke & Yew‐Knang Ng, 1993. "Immigration and Economic Welfare: Resource and Environmental Aspects," The Economic Record, The Economic Society of Australia, vol. 69(3), pages 259-273, September.
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    Cited by:

    1. Morteza Moallemi & Daniel Melser, 2020. "The impact of immigration on housing prices in Australia," Papers in Regional Science, Wiley Blackwell, vol. 99(3), pages 773-786, June.
    2. Jaai Parasnis & Dietrich Fausten & Russell Smyth, 2006. "The Impact of Immigration on Native Workers in Australia," Monash Economics Working Papers archive-40, Monash University, Department of Economics.
    3. 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.
    4. Jaai Parasnis, 2010. "Estimating The Relationship Between Immigrant And Native Workers In Australia: A Production Theory Approach," Australian Economic Papers, Wiley Blackwell, vol. 49(1), pages 73-85, March.

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    More about this item

    JEL classification:

    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • D33 - Microeconomics - - Distribution - - - Factor Income Distribution
    • D60 - Microeconomics - - Welfare Economics - - - General

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