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Australian population puzzle divides experts

August 4, 2010

http://www.smh.com.au/federal-election/population-puzzle-divides-experts-20100731-110jq.html

Australia currently has a population of 22 million, but current projections put the country’s population at 36 million or more by 2050.  This has raised a debate about how big the Australian population should ultimately be.  Geographically the country has plenty of space to accommodate many more than live here currently but since much of the country is largely uninhabitable, the key question is how many people can the country optimally support given physical, environmental and economic constraints.

Immigration from other countries is one way in which population growth occurs.  Immigration to Australia has become a big issue in the country’s election campaign and will continue to be an issue, whichever party wins the election.  Says the current Prime Minister, Julia Gillard, “It is the government’s job to take control of our future and put Australia on to a path of sustainable population growth,” she said.

But what is ‘sustainable’ and who should be allowed to migrate to Australia?   This is an issue of both numbers – how many people should be allowed in — and quality – how skilled should these people be.  All parties favour some skilled migration but how much is still a matter of disagreement.

  1. How is immigration related to Australia’s “Long Run Supply” and “Long Run Demand”?
  2. How might the immigration of skilled people into Australia affect the country’s economy differently than immigration of unskilled people?
  3. What would Thomas Malthus (Box 4.2) say about the Australian immigration and population debate? Is any of the current debate similar to his arguments?  How do they differ?
  4. Assess the economic validity of the following statement: “If immigration is restricted, Australia’s Long Run Average Costs (LRAC) will increase.”
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