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Australia: Selected Issues
Author:
International Monetary Fund. Asia and Pacific Dept
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Series:
IMF Staff Country Reports
Volume/Issue:
Volume 2024: Issue 012
Language:
English
Publication Date:
18 Jan 2024
DOI:
https://doi.org/10.5089/9798400264054.002
ISBN:
9798400264054
ISSN:
1934-7685
Pages:
21
Keywords:
inflow shock; labor market outcome; I. Effects of Migration shock; macroeconomic outcome; labour outcome; Migration; Labor force participation; Population growth; Housing prices; Global
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This Selected Issues paper examines macroeconomic impact of migration in Australia. Migration in Australia has historically been a significant source of population growth, with a third of the population born overseas. Migration is set to become even more important as the population natural growth rate declines. Australia attracts some of the best-educated migrants to Organization for Economic Cooperation and Development countries who are mostly skilled workers and students, with high labor force participation rates and low unemployment. Disentangling macroeconomic effects of migration from drivers of migration is challenging, but within Australia, migration surges have historically been associated with higher growth and favorable labor market outcomes, with negligible price pressures except in the housing market. Cross-country analysis using instrumental variables confirms a positive impact of migration on macroeconomic outcomes—output, employment, and productivity—without significant inflationary impact. While housing affordability is impacted at the margin, this could represent structural supply shortages and would be best addressed by boosting supply.
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Cover IMF Staff Country Reports
IMF Staff Country Reports
ISSN:
1934-7685
Publisher:
International Monetary Fund