Migrants and Labour Market Outcomes
INCOME OF MIGRANTS
The outcome measures investigated in relation to migrant incomes were proportions of each sub-group that had income below and above the 30th and 70th percentiles, respectively, of the national income distribution. As noted earlier, we use the terms 'low-income earners' and 'high-income earners' as short-hand labels for these groups. For comparison, we observe the proportion of low-income earners and high-income earners in the New Zealand born population and compare with the relevant outcome for the migrant population.
Table 5.1 Outcome measures investigated
It should be noted that the qualification classification changed considerably between the 1981 and later censuses; thus, comparisons across this dimension need to be approached cautiously.
Income and the birthplace dimension
Overall, the proportion of the migrant population with low income has increased across the three censuses investigated. Note, in each year the population-weighted average of this measure is 30%, so a proportion above 30% is above average, while a figure below 30% is below average.
In 1981, 30.2% of the New Zealand born population had low income compared with 29.3% of the migrant population. By 2001, the proportions had changed to 28.5% for the New Zealand born and 35.3% for the migrant population groups. The period between 2001 and 2006 has seen small changes in these proportions, with 28.0% for the New Zealand born and 35.5% for migrants.
Figure 5.1 depicts the changes according to the birthplace of migrants. Amongst migrants, those born in Asia, the Pacific Islands and the other birthplace groupings experienced noticeable proportionate increases between 1981-2001 in those with low income. There is also a smaller increase for those born in Europe and North America. However, there are noticeable reductions in these proportions recorded in the latest period to 2006.
Conversely, there was a fall in this measure over the 1981-2001 period for those born in the United Kingdom and Ireland, with little change for the Australian born population group. Little change over the period to 2006 for these groups was recorded.
Figure 5.1 Proportion of low-income earners in population groups
The changes in population proportions for those with high incomes are close to a mirror image of the above picture. For the New Zealand born population, the proportion rose from 29.5% in 1981 to 30.7% in 2001, rising further to 31.0% in 2006. Proportions for the migrant population fell from 32.2% in 1981 to 27.4% in 2001 and remained stable at that figure in 2006. The largest falls to 2001 were for the Asian born migrant group, with falls also recorded for the Europe and North America and Pacific Islands birthplace groupings.
From these figures, it appears that there is a significant difference in incomes according to birthplace, with those born in Asia and the Pacific Islands noticeably so. Noting the differing composition of migrant arrivals since 1981, this suggests the question of how sensitive this observation is to the length of residence in New Zealand of the migrant groups.
Indeed, the formal analysis presented in section 10 confirmed that much of this difference can be attributed to differing proportions with vocational and degree qualifications. In addition, the age dimension and the significance of recent migrants were also confirmed.
Income and the years in New Zealand dimension
Recall that earlier migrants is our label for those that have resided in New Zealand for at least 15 years. Across all earlier migrants, the proportion with low income dropped from 28.4% in 1981 to 25.9% in 2001. However, this proportion rose back to 27.2% in 2006.
The decline to 2001 movement mirrors that for the New Zealand born population and is in stark contrast to the increase noted earlier for the total migrant population.
This observation suggests the difference in incomes according to birthplace noted in the previous section is indeed sensitive to the length of residence in New Zealand.
Calculating the proportion for each of the earlier migrants by birthplace population groups with income in the lowest three deciles leads to Figure 5.2. This picture shows considerably less differences between the different migrant groups than that for all migrants depicted in Figure 5.1 earlier. Note there remains an increase between 1981 and 2001 for those born in Asia and the Pacific Islands, but the increase is noticeably smaller than that for all migrants from these areas.
We also note the increase recorded in the period to 2006 appears across those born in United Kingdom and Ireland, Asia, and Europe and North America. One possible reason for this is a greater proportion of earlier migrants have now reached retirement than in earlier years.
Figure 5.2 Proportion of low-income earners in earlier migrant groups
Recent migrants have the greatest difference (compared to the New Zealand born) in the calculated income measures. This observation holds for both the actual levels of the measures, as well as their changes over the 1981-2001 period. For example, 50.8% of recent migrants had low incomes in 2001, compared with 28.5% for the New Zealand born population. Furthermore, the proportion for recent migrants grew from 37.3% in 1981 compared to 30.2% for the New Zealand born group. We note that this contrast did narrow in 2006 to 44.7% for migrants compared to 28.0% for the New Zealand born. The divergence, however, remains noticeably significant.
The relativities within the recent migrant group by their birthplace are similar to that for all migrants. For example, the 44.7% figure for 2006 comprises a proportion of 59.3% for those born in Asia, 48.1% for the Pacific Islands born group and 34.5%, 28.4% and 23.5% for the Europe and North America, Australia, and United Kingdom and Ireland groups respectively.
This analysis suggests the income measures for Asian and Pacific Islands born recent migrants, in particular, are different to those of other migrants. They are also different to those of the New Zealand born population.
Noting the potential differing characteristics of the migrant populations, in addition to issues noted earlier with the presence of full fee-paying international students, a further dimension that should be explored is the age of migrants. We do this by investigating the labour market outcomes of those aged 25-54 years old.
Income and the age dimension
5.3.1 All migrants aged 25-54
Looking solely at the population aged 25-54 years old, the proportion of the New Zealand born group with low income fell from 21.8% in 1981 to 18.6% in 2001. Indeed, this proportion fell further to 17.3% in 2006.
Figure 5.3 Proportion of 25-54 year old migrants with low income
In a similar vein, the proportion of 25-54 year olds with low income fell over the 1996-2006 period across most of the migrant sub-groups depicted in Figure 5.3. However, the 2006 proportions with low income in each of these migrant populations remained above that for the equivalent New Zealand born group aged 25-54, with the exception of those born in the United Kingdom and Ireland.
5.3.2 Recent migrants aged 25-54
Breaking down the population sub-groups further, we observe the income of recent migrants (i.e. less than five years resident in New Zealand). Calculating the comparable proportions for each of the recent migrant groups aged 25-54 years old by birthplace leads to Figure 5.4. It is noticeable that, for each of these sub-groups, the calculated proportion is above the comparable figure for the New Zealand born group for each of the four years, with only one exception.
The one exception is the case of United Kingdom and Ireland born recent migrants in 2001.
Again, the more interesting feature of the comparisons shown in Figure 5.4 is the fall in the proportions across almost all groups between 1996-2006. This is despite increases between 1981 and 1996 in the proportions with low incomes of recent migrants aged 25-54 from Europe and North America, Asia and the Pacific Islands.
Figure 5.4 Proportion of 25-54 year old recent migrants with low income
In comparison, movements in the proportion of each population sub-group that receives high income are not as clear cut. For example, Figure 5.5 illustrates the proportions for recent migrants aged 25-54 receiving high income compared to the New Zealand born population in that age group. This chart shows these proportions as remaining relatively stable over the 1996-2006 period. This suggests the reduction in proportions receiving low incomes is mirrored in increases in those receiving 'middle' incomes.
Also of note, is that a relatively low proportion of recent migrants aged 25-54 born in Asia and the Pacific receive high income. The 18% proportion for these two sub-groups in 2006 compares with 33% for all recent migrants aged 25-54 and 43% for the New Zealand born 25-54 sub-group. An increased proportion of those from Australia and the United Kingdom receive high incomes. This is likely due to the increased proportion in professional occupations (see section 8.1).
Figure 5.5 Proportion of 25-54 year old recent migrants with high income
Earlier migrants aged 25-54
Amongst earlier migrants aged 25-54, it is noticeable that the proportions with low income are broadly similar, as illustrated in Figure 5.6. Further, these proportions have consistently fallen over the 1981-2006 period.
The primary exception to this observation is the sub-group of those born in Asia. While the proportions for this group remain comparable to those others shown in the chart, the increases pictured for the 1981-2006 period suggest other influences are at play here. However, it is not immediately clear what these influences could be, noting that this group of earlier migrants (i.e. at least 15 years resident in New Zealand) should exclude those in New Zealand as full fee-paying international students.
Figure 5.6 Proportion of 25-54 year old earlier migrants with low income
The improvement in the majority of migrant income measures between 1996 and 2006, as well as the different outcomes for recent and earlier migrant groups, begs the question as to whether there have been similar movements in other labour market outcomes across different groups. Clearly, the overall picture for incomes of total migrants (as depicted in Figure 5.1, for example) is noticeably different to those for groups where key characteristics such as age and length of residence in New Zealand are captured.
Income and the qualification dimension
The qualification dimension is informative in assisting comparisons of population groups that should, a priori, be similar from a labour market perspective. However, as noted above, changes in the classification of qualifications between 1981 and later censuses require caution in comparing change over time in measures using this dimension.
For the New Zealand born population, 60.3% of those with degree qualifications had high incomes in 2006. This proportion was down slightly from the 63.3% recorded in both 1996 and 2001. In comparison, the figures for the migrant population with degree qualifications were 52.6% in 1996, 52.9% in 2001 and 48.5% in 2006. Figure 5.7 shows that the proportions for the different migrant groups according to birthplace vary considerably. In particular, in 2006, the lowest proportion was the 32.5% recorded for the Asian migrant group, while the highest proportion was the 63.6% for the United Kingdom and Ireland born group.
Figure 5.7 Proportion of migrants with degree qualification with high income
In line with the relative stability in this proportion over the 1996-2006 period for the New Zealand born population, the movement for the different migrant groups over this period appears minimal.
There do appear to be classification issues with the 1981 data, so we do not infer anything from the movement in proportions between 1981 and later censuses. However, the differences in the 1981 proportions between the migrant groups are a valid comparison. In particular, we note that the proportions range from a low of 35.9% for the Pacific Islands born group of migrants to a high of 52.8% for those born in the United Kingdom and Ireland. Noticeably, the figures for those born in Asia, Australia, and Europe and North America are closely grouped at 44.4%, 45.6% and 45.7% respectively. The comparable New Zealand born figure is 49.3%.
A tentative observation is that the migrant proportions for 1981 (excluding the Pacific Islands group) are closer to the New Zealand born figure than in later years. It is unclear why this would be the case and casts further doubt on the comparability of the 1981 data.
Following the analysis earlier, we amend the qualifications dimension to add the years in New Zealand dimension. Figure 5.8 shows a remarkable similarity of proportions with high incomes across the earlier migrant groups with degree qualifications.
Figure 5.8 Proportion of earlier migrants with degree qualifications with high incomes
This contrasts starkly with proportions with high incomes for recent migrants,[12] which range from 22.2% for Asian born migrants to 70.7% for the United Kingdom and Ireland born group. Within this range are figures of 35.9% for Pacific Islands born, 48.6% for the Europe and North America group and 65.9% for those born in Australia. Notably, the figure for the Australia born group is closest to the comparable 63.3% proportion for the New Zealand born.
These observations were confirmed by the findings of the formal modelling process described in section 10; that is, controlling for qualifications and years in New Zealand is critical in any analysis of relationships between migrants' birthplace and income.
Income measures summary
According to these measures for income, the observations clearly suggest migrant labour market outcomes are different from those of the New Zealand born, even after adjusting for the qualification characteristic of labour market participants. However, this conclusion is not supported if the length of residence in New Zealand characteristic of each migrant group is captured. If adjustment for this effect is incorporated, the income measures of earlier migrants are not dissimilar to those of the comparable New Zealand born population group. Conversely, income measures for recent migrants clearly diverge from those of the New Zealand born.
These observations clearly support the conclusions noted later in section 10.
[12] That is, those with less than five years in New Zealand.