Inter-Regional Migration in Australia: An Applied Economic Analysis

In analysing the effects of economic policy in a Federal system, such as Australia, it is important to understand the interactions between the States and Territories. In particular, given that there is free movement between labour markets, to analyse economic policy it is important to understand the factors influencing inter-regional migration. In this paper we use data from 1982 to 1996 to estimate a structural econometric model of inter-regional migration. The results are then used to re-specify and calibrate the Computable General Equilibrium model MONASH-MRF. This then provides a more detailed picture of labour market responses when we subsequently simulate the response of net inter-state migration to changes in State Government spending.