Do Migrants Rob Jobs? New Evidence from Australia

Abstract

Using a new Granger no-causality testing procedure, developed by Toda and Yamamoto (1995), this study contributes to recent debate on immigration and unemployment in Australia by investigating the causal linkage between immigration and unemployment in a six-variable vector autoregresion (VAR) model. The VAR model in the paper is built upon a general unemployment equation developed by Pope and Withers (1993), using quarterly time series data covering the 1983:3 to 1995:4 period. The question that whether immigrants rob jobs is examined by identifying the sources of unemployment through causal linkages between unemployment and other key variables such as immigration. The research finds no Granger causality between immigration and unemployment. Instead, there is evidence of Granger causality running from structural change, as measured by the Stoikov Index, to unemployment and from other key variables to unemployment.