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

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.... 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."