Migration Balances Rents and Innovation

Slowing migration can lead to a decrease in rents, as evidenced by research indicating that a net migration drop of about 100,000 in Australia could reduce rents by 1%. However, the immediate impact of reduced migration is complex and may lead to increased inflation in labor-intensive sectors like hospitality and healthcare due to declining labor supply pushing wages up. In the long term, restricting immigration tends to hinder a country's innovativeness and productivity, as increased migration facilitates native workers in taking on more productive roles. Moreover, addressing the challenges of changing demographics in wealthy countries necessitates a balanced approach to immigration policies.