A Reinterpretation of the CIE Projections of the Long-Run Economic Effects of Immigration*

The 1988 Committee to Advise on Australia's Immigration Policies uses ORANI projections of increasing GDP per head as indicators of the economic benefits of immigration. We show that the projections imply that immigration reduces incumbents' pre-tax real incomes, leaving their post-tax incomes unchanged The rise in GDP per head is due to immigrants' relatively high participation rates. We argue that distributional information is important in assessing the effects of immigration.