The impact of migration on regional labour markets in Australia
This paper provides novel evidence on the regional impact of international migration
on native employment and wages in Australia, using unique administrative individual-level
panel data covering all residents from 2011 to 2018. Employing a differences-in-differences
estimation strategy and a well-established shift-share instrumental variable (IV)
approach based on census data from 1981, the study addresses potential endogeneity
concerns related to migrant settlement patterns. The analysis reveals a positive impact
of migration on native employment across all skill levels, ages, and genders, while
wages remain unaffected. Examining the drivers of the employment effect shows that
the arrival of migrants leads to a substantial increase of newly employed natives
in the region and a decrease in the number of previously employed natives, with the
former outweighing the latter. Most of the dynamic results from geographic mobility
rather than labour market transition.