Exchange rate fluctuations and immigrants’ labour market outcomes

New evidence from Australian household panel data
PublishedMarch 2015
PublisherBankwest Curtin Economics Centre Working Paper Series
Number of Pages40

In this paper, we exploit exogenous changes in exchange rates across home countries over time and panel data to identify the casual impact of exchange rate fluctuations on Australian immigrants’ labour market outcomes. We present new and robust evidence that, unlike immigrants in the US, those in Australia as a whole do not reduce their yearly labour market outcomes when the local currency appreciates. While female immigrants don’t adjust their actual labour activities, they do desire to work more when the Australian dollar appreciates. By contrast, male immigrants reduce their weekly work intensity by participating less in full-time employment in response to an Australian dollar appreciation. We also present significant and heterogeneous impacts of exchange rates by gender and socio-economic backgrounds of immigrants and labour market outcomes