Does immigration improve living standards?

Proponents of mass immigration claim that it improves living standards by increasing productivity and ameliorating the aging of the population.

For example, modelling by McDonald and Temple in 2010 claimed that an annual migration intake between 160,000 and 220,000 is best for Australia and would increase GDP per capita by 12% more in 2053 versus zero net overseas migration.

However, the empirical evidence does not support the modelling’s conclusion. Australia massively increased its net migrant intake in the mid-2000s:

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About the author

Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.