Quarterly Migration update – December 2007

Last updated 22 Ferbruary 2008

Introduction

This report examines trends in permanent and long-term (PLT) migration using data collected by Statistics New Zealand from arrival and departure cards. These data cover migrants intending to stay or leave for a year or more. This analysis is supported by data from the Household Labour Force Survey and 2006 Census of Population and Dwellings about labour market outcomes of recent migrants to New Zealand.

Large decline in net migration inflows

Net migration for the year to December 2007 has declined to 5,500, after reaching a peak of 14,800 in the year to November 2006. This figure is also much lower than net migration figures a year ago of 14,600.

The decrease in annual net migration inflows over the last 12 months primarily resulted from more departures of New Zealanders¹ (up 8,000), notably to Australia (up 7,100), and fewer arrivals of returning New Zealanders (down 1,000). This increase in outflow has been partially off-set by an increase in the inflow of non-New Zealanders (up 900).

Net migration inflows have now been falling for more than a year, following a gradual rise in the 13 months prior to that. It is also currently the lowest since late 2001. As net migration inflows are influenced by volatile trends in arrivals and departures, they fluctuate considerably and tend to have long cycles. As shown in Figure 1, current net migration trend is similar to other points in the migration cycle over the past 20 years.

Net migration inflows are currently below the long-term average of around 10,000. The underlying factors driving increased departures, particularly to Australia, are likely to persist in the coming months. Therefore, it is possible that net migration will continue to decline in the year ahead.

Figure 1: PLT total arrivals, departures, and net migration, 1986-2007

Data table for Figure 1

Slight rise in arrivals of non-New Zealanders

Compared to other OECD countries, New Zealand’s migration trends are characterised by large volumes of departures (notably of New Zealanders) and arrivals (notably of non-New Zealanders).

In the year to December 2007, there was a net outflow of 32,700 New Zealanders, which was offset by a net inflow of 38,800 non-New Zealanders.

The number of returning New Zealanders was fairly steady over time. However, it fell slightly to 23,000 in the year to December 2007, from 24,000 in the year before.

Arrivals of non-New Zealanders increased over the same period. The increase was due mainly to increased arrivals from Asia. In particular, arrivals from South Asia, notably from India, were strong, rising by 49% to 4,800 in the year to December 2007 from 3,200 a year before.

Increase in departures of New Zealanders to Australia

Departures of New Zealanders to Australia constitute 67% of total departures in the year to December 2007. Departures of New Zealanders to Australia increased sharply to 37,100 in the year to December 2007, up from 30,000 a year earlier. The net outflow to Australia for the year to December 2007 was also the highest for a December year since 1988.

Of the total departures to Australia in the year to December 2007, 81% of departures were made by those born in New Zealand. Departures of people not born in New Zealand were born in a variety of countries. The skill level of New Zealanders departing to Australia is broadly representative of the New Zealand workforce, while the skill levels of arriving immigrants tend to be higher than the national average. This means that, should current trends persist, migration may contribute to an increase of the average skill level of the labour force over time. The trends and drivers of New Zealanders migrating to Australia is explored in the special topic of the Quarterly Migration Update for September 2007.

Departures of New Zealanders to United Kingdom/Ireland constitute 16% of total departures in the year to December 2007. Departures to the United Kingdom/Ireland also experienced a slight increase to 9,000 in the year to December 2007, up from 8,800 a year before.

Departures of non-New Zealand citizens increased marginally over the past year.
This was mainly due to a small increase in departures of non-New Zealand citizens to Australia and United Kingdom/Ireland.

Labour market outcomes of recent migrants to New Zealand

Migrants make up an increasing proportion of new entrants into the New Zealand labour market, making up 13% of New Zealand’s labour force in the year to December 2007. The Household Labour Force Survey provides information on the labour force status of all people who were born overseas and who have been resident in New Zealand for 10 years or less. This is a wider group than permanent and long term migrants who have come to New Zealand through specific immigration programmes.

On average between 2001 and 2007, the labour force participation and employment rates of recent migrants have been increasing, particularly for new migrants who have been in New Zealand for 0-2 years. There was also a corresponding fall in the unemployment rates of recent migrants over the past 6 years, particularly for migrants who have been in New Zealand for 0-2 years.

In the year to December 2007, the average labour force participation rate for recent migrants² was 67.8%, slightly below the annual average labour force participation rate for New Zealand as a whole (68.6%). Recent migrants also had a higher unemployment rate (5.2%) compared to the annual average rate for New Zealand as a whole (3.6%). Although the labour market outcomes of new migrants tend to be below that of the New Zealand average, outcomes quickly improve to be similar to the New Zealand average with length of time in New Zealand.

Migrant labour market outcomes differ depending on length of time in New Zealand.
As shown in Table 1, participation in the labour force is highest for migrants who have been in New Zealand for 3-5 years. The unemployment rate is also considerably lower for migrants who have been in New Zealand for 3 years or more than for migrants who have been in New Zealand for 2 years or less. This suggests that migrants take some time to adjust to the New Zealand labour market. Previous studies showed that this differed by migrants’ country of origin due to factors such as qualifications, proficiency in English language and transferability of their skills³ . In addition, labour market outcomes tend to be particularly strong for skilled migrants, with surveys by the Department of Labour showing very high job uptake by skilled migrants (90% for principal applicants).