Published: October 2009 – Economic Impacts of Immigration Working Paper Series

Contents

• Figures
• Tables
• Executive summary
• 1 Introduction
  • 1.1 Economic Impacts of Immigration research programme
  • 1.2 Research objective
  • 1.3 Report structure
• 2 Computable general equilibrium model
  • 2.1 Balancing demand and supply
  • 2.2 Computable general equilibrium model
  • 2.3 Advantage of model is in its industry detail
  • 2.4 Data and aggregations
  • 2.5 Interpreting model simulations
  • 2.6 Generating a baseline scenario
  • 2.7 Baseline scenario for this study
• 3 Scenarios
  • 3.1 Migration assumptions
  • 3.2 Additional assumptions
  • 3.3 Summary of how immigration impacts on the economy
• 4 Scenario results
  • 4.1 Increased immigration inflow - scenario A
  • 4.2 Zero immigration inflow - scenario B
  • 4.3 Increased immigration targeting skills - scenario C
  • 4.4 Increased immigration with accompanying elements - scenarios D and E
  • 4.5 Immigration scenario with refinements - scenario F
  • 4.6 Comparison with 1988 simulations
• 5 Conclusion
• Appendix A: Model structure
• Appendix B: Model classifications and base data
• Appendix C: Model input for baseline
• Appendix D: Short-run impacts of increased immigration scenario
• Appendix E: Comparison with Australian Productivity Commission experiment
• Appendix F: Detailed sector results for 2021 baseline
• Appendix G: Detailed sector results for Scenario A
• Appendix H: Detailed sector results for Scenario B
• Appendix I Comparison of results
• References

Figures

• Economic impact in 2021 of doubling net immigration inflow
• Economic impact in 2021 of a zero immigration inflow
• Figure 1.1 Changing different aspects of immigration to test the impact on the economy
• Figure 2.1 Schematic outline of relationships
• Figure 2.2 Interpreting a computable general equilibrium (CGE) model experiment
• Figure 3.1 Schematic of economic impacts of immigration
• Figure 4.1 Impact of increased immigration with additional features

Tables

• Table 2.1 Comparison of permanent and long-term and overseas-born inflows
• Table 2.2 Baseline 2021 projection
• Table 2.3 Baseline projection of employment by occupation
• Table 3.1 Scenario list
• Table 3.2 Migration 1991-2006 and assumptions in baseline and scenarios A and B1
• Table 4.1 Macro results of increased immigration scenario - 2021
• Table 4.2 Impact on industry output of increased immigration - 2021
• Table 4.3 Impact on occupation employment of increased immigration - 2021
• Table 4.4 Impact on exports of increased immigration - 2021
• Table 4.5 Impact on households of increased immigration - 2021
• Table 4.6 Macro impact of zero immigration inflow - 2021
• Table 4.7 Impact on occupation employment of zero immigration inflow - 2021
• Table 4.8 Macro impact of skilled immigration with 2001-2006 composition - 2021
• Table 4.9 Impact of sector employment of increased skilled immigration - 2021
• Table 4.10 Impact on occupation employment of increased skilled immigration - 2021
• Table 4.11 Macro impact of increased immigration and improved productivity - 2021
• Table 4.12 Sector employment impact of with improved productivity - 2021
• Table 4.13 Macro impact of increased immigration and external trade links - 2021
• Table 4.14 Macro impact of increased immigration with refinements - 2021
• Table 4.15 Sector employment in refined scenario - 2021
• Table 4.16 Occupation mix of refined scenario - 2021
• Table 4.17 Comparison of results from scenario A and 1988 study
• Table B1 Industry classifications in BERL computable general equilibrium model
• Table B2 Consumption commodity categories in BERL computable general equilibrium model
• Table B3 Export commodity categories in BERL computable general equilibrium model
• Table B4 Labour occupation types in BERL computable general equilibrium model
• Table C1 Baseline assumptions for resources
• Table C2 Baseline assumptions for final demand
• Table C3 Baseline assumptions for world markets
• Table C4 Industry productivity and import price assumptions for baseline
• Table C5 Commodity export market baseline assumptions
• Table D1 Short-run macro results of increased immigration scenario
• Table D2 Short-run impact on industry output of increased immigration
• Table D3 Short-run impact on occupation employment of increased immigration
• Table E1 Comparison of increased immigration scenarios
• Table F1 Sector results for 2021 baseline
• Table F2 Household consumption spending for 2021 baseline
• Table F3 Export volumes for 2021 baseline
• Table F4 Labour by occupation type for 2021 baseline
• Table G1 Sector results for 2021 increased immigration scenario A
• Table G2 Household consumption spending for increased immigration scenario A
• Table G3 Export volumes for increased immigration scenario A
• Table G4 Labour by occupation type for increased immigration scenario A
• Table H1 Sector results for 2021 zero inward immigration scenario
• Table H2 Household consumption spending for zero inward immigration scenario B
• Table H3 Export volumes for zero inward immigration scenario B
• Table H4 Labour by occupation type for zero inward immigration scenario B
• Table I1 Comparison of scenario results

Acknowledgements

Dr Adolf Stroombergen of Infometrics Consulting Limited completed the development of the 2002/2003 input-output table, which was derived from Statistics New Zealand's supply and use tables.

Dr James Giesecke of the Center for Policy Studies, Monash University, provided advice on incorporating the net foreign liabilities routines into the general equilibrium modelling framework.

Professor Jacques Poot, Ram SriRamaratnam, Dirk Van Seventer, and James Chang provided comments and advice at various stages of the project.

The Economic Impacts of Immigration steering group and the participants of the scenario development workshops provided valuable advice.

Belinda Hill and Beth Ferguson assisted with the editing of this report.

Disclaimer: The Department of Labour has made every effort to ensure that the information contained in this report is reliable, but makes no guarantee of its accuracy or completeness and does not accept any liability for any errors. The Department may change the contents of this report at any time without notice.

© Crown copyright 2009

This material is Crown copyright unless otherwise stated and may be reproduced free of charge without requiring specific permission. This is subject to it being reproduced accurately and not being used in a derogatory manner or in a misleading context. The source and copyright status should be acknowledged. The permission to reproduce Crown copyright protected material does not extend to any material in this report that is identified as being the copyright of a third party.

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ISBN 978-0-478-33391-6