Why Victorians move to Queensland: An Attempt at Econometric Modelling

The issue of inter-regional migration as a function of regional labour market disparities is well known. It is especially important for a country such as Australia with both different and dynamic structures of regional economies, a continuing high level of external migration and a long-term trend of disparities in employment opportunities across the states and regions. The paper discusses an approach to an econometric model of inter-state migration in Australia. Internal population movement from a particular region is measured in relation to the regional level of unemployment. In contrast to previous attempts to construct such a model, inter-regional migration is explained using an essentially non-linear function of unemployment ratio(s) to compare particular regions. The other factor under consideration affecting regional labour markets in Australia is external migration. The inflow's of external migration to Australia are not homogeneously distributed across the states. However, the regional differences in immigration are mostly predetermined by certain social and demographic factors rather than by current disparities in employment opportunities. For this reason these inflows are considered as exogenous variables, which in themselves contribute to the disparities in regional labour markets.