IMMIGRATION AND ECONOMIC WELFARE - RESOURCE AND ENVIRONMENTAL ASPECTS

The relation between immigration and the economic welfare of residents is analyzed for resource-rich economies (such as Australia) both unde r competitive conditions and when various distortions are present. Imm igration provides efficiency gains for residents under distortion-free competition for standard 'gains from trade' reasons. Such reasons, ho wever, tend to be ignored by immigration and 'optimal population' theo rists who raise the issue of restricting immigration without explicitl y referring to the distortions. In situations where distortions and ex ternalities are present we argue that it is generally preferable to de vise policies which specifically target the distortions than to restri ct immigration.