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Modelling the Economic Impacts of Migration and Population Growth

James Giesecke and Gerald Meagher ()

Centre of Policy Studies/IMPACT Centre Working Papers from Victoria University, Centre of Policy Studies/IMPACT Centre

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.

Keywords: CGE modelling; skilled immigration (search for similar items in EconPapers)
JEL-codes: C68 J31 J61 (search for similar items in EconPapers)
Date: 2006-05
New Economics Papers: this item is included in nep-cmp, nep-hrm and nep-lab
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Published in Giesecke, J.A. (2006), 'The economic impact of a general increase in skilled immigration', People and Place, Vol. 14(3), pp. 48-63.

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