Another doctorate in the Department of Economics

The thesis used a dynamic CGE model with a highly detailed labour market specification to analyse the economy-wide effects of a policy-induced cut to illegal immigration in South Africa. The policy in question aims to reduce the labour supply of lower-skilled foreign-born migrants to South Africa by improving macroeconomic stability and conditions in neighbouring countries and strengthening border protection.

After developing a labour market database and set of assumptions consistent with the South African situation, the study found that successful implementation of the government's stated policy of reducing illegal immigration would be advantageous to the native population. An unanticipated effect of the policy is that a small amount of highly skilled jobs would be lost relative to the baseline as a result of a deterioration in the occupation or skill-mix. This is compensated for by a strong increase in lower-skilled jobs for natives who take up the vacancies created by the outflow of illegal migrants.

Despite the increase in the welfare of the native population, the study also shows that successful implementation of this policy will by no means solve the country's large unemployment problem. The findings in this study also point to low labour productivity growth, real wage increases and rigid labour laws as areas where policies should be developed to promote employment growth.

Heinrich did his studies through the Centre of Policy Studies (CoPS), a research centre at Monash University. It is devoted to economy-wide modelling of economic policy issues. CoPS researchers are the authors of the influential ORANI and MONASH models that have been used across the world.

“Regarded as world leaders in the field of CGE modelling, it was truly the opportunity of a lifetime to further my studies at CoPS. Under the supervision of Prof Peter Dixon I was able to build a state-of-the-art dynamic CGE model for South Africa which can now be used to analyse a wide range of economic policy issues at home”, says Heinrich.