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Modelling the Economic Impacts of Migration and Population Growth

Author

Listed:
  • 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.

Suggested Citation

  • James Giesecke & G.A.Meagher, 2006. "Modelling the Economic Impacts of Migration and Population Growth," Centre of Policy Studies/IMPACT Centre Working Papers g-157, Victoria University, Centre of Policy Studies/IMPACT Centre.
  • Handle: RePEc:cop:wpaper:g-157
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    References listed on IDEAS

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    1. Bruce Headey & Gary Marks & Mark Wooden, 2005. "The Structure and Distribution of Household Wealth in Australia," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 38(2), pages 159-175, June.
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    Cited by:

    1. Peter E. Robertson, 2007. "Reflections on Australia’s Skilled Migration Policy," Discussion Papers 2007-22, School of Economics, The University of New South Wales.
    2. Peter E. Robertson, 2008. "The Biggest Loser: Education and Skilled Immigration in Australia," Agenda - A Journal of Policy Analysis and Reform, Australian National University, College of Business and Economics, School of Economics, vol. 15(1), pages 85-98.
    3. Rob Hodgson & Jacques Poot, 2011. "New Zealand Research on the Economic Impacts of Immigration 2005-2010: Synthesis and Research Agenda," CReAM Discussion Paper Series 1104, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.

    More about this item

    Keywords

    CGE modelling; skilled immigration;

    JEL classification:

    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers

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