DIAC-TERM: A Multi-regional Model of the Australian Economy With Migration Detail

DIAC-TERM is a dynamic multi-regional computable general equilibrium (CGE) model of Australia with an emphasis on labour market detail relevant to the analysis of Australia's Net Overseas Migration (NOM) program. Labour demand by industry, region and occupation is determined by the bottom-up multi-regional TERM model. Labour supply by region and occupation is based on a stock/flow dynamic describing disaggregated labour market groups. Between years, sub-populations, defined by age, region, skill, labour force status and visa status, transition between age and visa status categories. Within years, these same sub-populations and the new entrants to the labour market make utility-optimising offers to various labour market activities, such as working in a particular occupation, or leaving the labour force, or moving overseas. We illustrate the use of the model by analysing the consequences of three scenarios involving changes in the NOM program: a once-off increase in intake under the temporary skilled migration program, a permanent increase in the intake under the permanent skilled migration program, and a permanent increase in gross arrivals of non-New Zealand visa categories.