A comparative static model of the relationship between immigration and theshort-run job prospects of unemployed residents

ri novel theoretical approach is developed to illustrate the consequences o f immigration for the probability that unemployed residents gain a job. Thr ough the use of the vacancies to unemployed ratio it is shown that immigrat ion in theory can either increase or decrease unemployed residents' employm ent probabilities, but that, contrary to populist rhetoric, an increase is more likely the more recessed is the labour market. With reference to feasi ble Australian values of the parameters of interest, it is demonstrated tha t in practically all circumstances immigration increases the overall employ ment prospects of unemployed residents. Even so, the analysis is very short run, and strong conclusions as to what might be happening over the longer term are not appropriate.