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

Matthew W. Peter and George Verikios ()

Australian Economic Review, 1996, vol. 29, issue 2, 171-188

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

Date: 1996
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Handle: RePEc:bla:ausecr:v:29:y:1996:i:2:p:171-188