IDEAS home Printed from
MyIDEAS: Login to save this paper or follow this series

The Impact Of Immigration On The Wage Differential In Australia

  • Hsiao-chuan Chang
Registered author(s):

    This paper investigates a significant current issue in Australia, the impact of immigration on the wage differential between skilled and unskilled labour, using simulation analysis from a dynamic intertemporal general equilibrium model. The results show that immigration cannot explain variations of the wage differential in Australia during the past ten years. In most of the years investigated, immigration only explains a small part of the change in the wage differential. There is also no evidence that immigration exerts significant downward pressure on the unskilled wage. A comparison of four policy options demonstrates that accepting an increased number of skilled immigrants per year at a certain rate will decrease the wage differential in both the short and long run. Cutting the number of skilled immigrants per year at a certain rate will increase the wage differential in the long run and decrease the wage differential in the short run. An effective policy to change the skilled-unskilled wage differential requires a mixture of a set of instruments aimed at other economic issues such as international trade, productivity growth and education.

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

    File URL:
    Our checks indicate that this address may not be valid because: 404 Not Found ( [301 Moved Permanently]--> If this is indeed the case, please notify (Aminata Doumbia)

    Download Restriction: no

    Paper provided by The University of Melbourne in its series Department of Economics - Working Papers Series with number 859.

    in new window

    Length: 26 pages
    Date of creation: 2002
    Date of revision:
    Handle: RePEc:mlb:wpaper:859
    Contact details of provider: Postal: Department of Economics, The University of Melbourne, 4th Floor, FBE Building, Level 4, 111 Barry Street. Victoria, 3010, Australia
    Phone: +61 3 8344 5355
    Fax: +61 3 8344 6899
    Web page:

    More information through EDIRC

    References listed on IDEAS
    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

    as in new window
    1. Robert J. LaLonde & Robert H. Topel, 1991. "Labor Market Adjustments to Increased Immigration," NBER Chapters, in: Immigration, Trade, and the Labor Market, pages 167-199 National Bureau of Economic Research, Inc.
    2. Rachel M. Friedberg & J. Hunt, 1995. "The Impact of Immigrants on Host Country Wages, Employment and Growth," Working Papers 95-5, Brown University, Department of Economics.
    3. George J. Borjas & Richard B. Freeman & Lawrence F. Katz, 1996. "Searching for the Effect of Immigration on the Labor Market," NBER Working Papers 5454, National Bureau of Economic Research, Inc.
    4. James J. Heckman & Lance Lochner & Christopher Taber, 1998. "Explaining Rising Wage Inequality: Explorations with a Dynamic General Equilibrium Model of Labor Earnings with Heterogeneous Agents," NBER Working Papers 6384, National Bureau of Economic Research, Inc.
    5. Peter Kuhn & Ian Wooton, 1991. "Immigration, International Trade, and the Wages of Native Workers," NBER Chapters, in: Immigration, Trade, and the Labor Market, pages 285-304 National Bureau of Economic Research, Inc.
    6. George J. Borjas, 1994. "The Economics of Immigration," Journal of Economic Literature, American Economic Association, vol. 32(4), pages 1667-1717, December.
    7. John M. Abowd & Richard B. Freeman, 1991. "Immigration, Trade, and the Labor Market," NBER Books, National Bureau of Economic Research, Inc, number abow91-1, July.
    8. George J. Borjas & Richard B. Freeman & Lawrence F. Katz, 1991. "On the Labor Market Effects of Immigration and Trade," NBER Working Papers 3761, National Bureau of Economic Research, Inc.
    9. Borjas, George J., 1999. "The economic analysis of immigration," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 28, pages 1697-1760 Elsevier.
    10. Joseph G. Altonji & David Card, 1989. "The Effects of Immigration on the Labor Market Outcomes of Natives," NBER Working Papers 3123, National Bureau of Economic Research, Inc.
    11. Addison, Thomas & Worswick, Christopher, 2002. "The Impact of Immigration on the Earnings of Natives: Evidence from Australian Micro Data," The Economic Record, The Economic Society of Australia, vol. 78(240), pages 68-78, March.
    Full references (including those not matched with items on IDEAS)

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    When requesting a correction, please mention this item's handle: RePEc:mlb:wpaper:859. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Aminata Doumbia)

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.