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

  • Matthew W. Peter
  • George Verikios

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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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
Date of revision:
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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  1. Harry R Clarke & Yew-Kwang Ng, 1992. "Immigration and Economic Welfare: Resource and Enviromnental Aspects," Working Papers 1992.21, School of Economics, La Trobe University.
  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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