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Migration Trends and Outlook 2007/08

GLOBAL OUTLOOK

Highlights

Introduction

This chapter overviews the outlook of migration for New Zealand by reporting major global migration trends, highlighting New Zealand's place in these trends. It also discusses the implications of the global economic outlook for New Zealand.

Global migration trends

New Zealand is part of a global migration system. This section overviews the global patterns of migration with a focus on trends in the countries of the Organisation for Economic Co-operation and Development (OECD). This information is summarised from International Migration Outlook: SOPEMI - 2008 Edition.[25] Comparisons with Australia and Canada are included where possible, as they are traditionally migrant-receiving countries, as is New Zealand. These countries have similar immigration policy profiles to New Zealand and target the same groups of migrants that New Zealand targets.

Globally, permanent migration has been increasing at a faster rate than has temporary migration. The numbers of temporary migrants, however, remain much larger than the number of permanent migrants. Temporary migration has also been increasing, mainly people wanting to work or study.

The main source countries of migrants change over time. Most countries seek to attract migrants with high levels of skills, but many countries are also expecting or experiencing labour shortages across a broad range of skill levels.

Migrants do not always stay in the country to which they originally migrated; some return home and others move to another country.

Permanent migrants

International migration is likely to become more significant in OECD countries as they experience the effects of retiring baby boomers and declining youth populations. The number of foreign nationals migrating on a permanent basis[26] has increased annually over the past few years. It also increased in 2006 but less steeply than in previous years. In 2006, around 3.3million people migrated on a permanent basis to OECD countries (see Table 3.1).

Table 3.1 Inflows of foreign nationals, 2006
Country Permanent-type migration (standardised statistics)
2006 Net change 2005-2006 Percentage change
2005-2006 (%)
Austria 46,418 -10,400 -18
Germany 216,015 -25,400 -11
New Zealand 54,800 -4,600 -8
United Kingdom 343,219 -19,900 -5
Netherlands 59,365 -3,100 -5
Canada 251,637 -10,600 -4
France 168,952 -700 0
Italy 204,254 5,100 3
Belgium 36,082 1,100 3
Japan 86,698 5,400 7
Australia 191,905 12,100 7
Norway 27,966 2,300 9
Finland 13,868 1,200 9
Switzerland 86,311 7,500 10
United States 1,266,264 143,900 13
Denmark 21,723 3,700 21
Ireland 88,900 22,800 34
Sweden 74,011 20,200 38
Portugal 25,057 13,600 118
Total 3,263,445 164,200 5

Note: Estimates exclude unauthorised migration and large-scale regularisations. Data refers to a combination of autorizacion de residencia inicial for citizens of non-European Union countries and of change of residence statistics from the municipal registers for citizens of European Union countries.

Source: P Fron. G Lemaitre, T Liebig, and C Thoreau. 2008. Standardised Statistics on Immigration Inflows Results, Sources and Methods. Paris: Organisation for Economic Co-operation and Development. Available at http://www.oecd.org/dataoecd/22/28/41281008.pdf.

Ireland, Sweden, and Portugal experienced the largest increases in inflows from 2005 to 2006. Australia experienced a moderate increase of 7percent. Although Portugal experienced the largest increase in inflows, Portugal received 25,100 permanent migrants in 2006, less than half of New Zealand's inflow of 54,800. Austria and Germany experienced the largest decreases of inflows from 2005 to 2006 (18percent and 11percent respectively). New Zealand's inflow decreased 8percent and Canada's inflow decreased 4percent. As a proportion of the total population, however, permanent immigration movements were highest in Ireland, New Zealand, and Switzerland. Relative to proportion of the total population in other OECD countries, these three countries have some of the largest immigrant populations.

Globally, the largest group of permanent migrants continues to be families. About 44percent of migration was family related in 2006. For New Zealand, family-related migration made up 27percent of permanent migration, similar to the proportions for Canada (28percent) and Australia (25percent). Although this category had the largest increase from 2005 to 2006 compared with the other categories of permanent migrants, the rates for New Zealand, Canada, and Australia remained static.

Globally, labour-related migration made up 14percent of permanent migration in 2006. In New Zealand, labour-related migration made up 24percent of permanent migration, similar to the proportions for Canada (22percent) and Australia (26percent).[27]

Humanitarian migration increased from about 8 percent of total migration in 2003 to 12percent of all permanent migration in 2006, mainly due to a large increase in such migration to the United States. For New Zealand, humanitarian migration made up 10percent of permanent migrants, which is smaller than the proportion for Canada (17percent) but similar to the proportion for Australia (7percent).

Temporary migrants

Temporary migrants are more numerous than permanent migrants. Comparisons between countries are difficult, because definitions of the categories of temporary migrant vary considerably.

Traditional migrant-receiving countries such as Australia, Canada, and New Zealand have significant levels of temporary labour migrants. Compared with their total populations, Switzerland and New Zealand have the largest temporary migrant populations. In 2006, temporary migrants made up about 21 of every 1,000 head of population in New Zealand, compared with nearly 11 in Australia and about 5 in Canada. Among OECD countries, temporary labour migration increased around 15percent from 2003 to 2006, while total permanent labour migration increased 50percent over the same period.

Globally, between 2000 and 2005, the overall number of international students increased about 50percent. Large percentage increases (close to or more than 100percent) were seen in New Zealand, the Czech Republic, Japan, Korea, and the Netherlands. International students make up similar proportions of tertiary enrolments in New Zealand and Australia (around 17percent). English-language countries remain more attractive to international students than other countries. Some countries whose native language is little known outside their borders are developing programmes to attract international students; for example, the Netherlands. Current estimates are that around 15-20percent of international students will stay on in the country after completing their study. Most OECD countries, including Australia, Canada, and New Zealand, allow students to stay in the country after their study if they are employed or to search for work.

Countries of origin of migrants

The countries that migrants come from differ across OECD countries. Generally, in 2006 migrant inflows in Europe were of European origin (57percent of inflows). In OECD countries outside Europe, migrants of Asian origin accounted for almost 50percent of inflows. The top 20 source countries accounted for 60percent of all inflows in OECD countries in 2006. China, Poland, and Romania were top of the source country list.

The foreign-born population accounted for 12percent of the total 2006 population in OECD countries (where data was available). This rate is highly variable between countries from less than 3percent in Finland to 25percent or more in Australia, Switzerland, and New Zealand. The foreign-born population also represented a significant proportion of the employed population in OECD countries.

Compared with the average inflows in the decade before 2006, New Zealand in 2006 was more likely to receive migrants from the United Kingdom and China and less likely to receive migrants from India. These three countries were also New Zealand's main source countries. Australia's main source countries in 2006 were the United Kingdom, New Zealand, China, and India. The proportion of total inflows from New Zealand to Australia, however, decreased in 2006 compared with the average inflow in the previous decade. Canada's main source countries in 2006 were China, India, and the Philippines, with China the most common source in both 2006 and the previous decade. (See Figure 3.1.)

Figure 3.1 Proportion of total migrant inflows by top 10 source countries in Australia, Canada, and New Zealand, 2006

Figure 3.1	Proportion of total migrant inflows by top 10 source countries in Australia, Canada, and New Zealand, 2006

Figure 3.1	Proportion of total migrant inflows by top 10 source countries in Australia, Canada, and New Zealand, 2006

Figure 3.1	Proportion of total migrant inflows by top 10 source countries in Australia, Canada, and New Zealand, 2006

Data table for Figure 3.1

Note: The top 10 source countries are presented in decreasing order of the number of migrants in 2006. Data refers to inflows of permanent settlers by country of birth.

Source: OECD. 2008. International Migration Outlook: SOPEMI - 2008 edition. Paris: Organisation for Economic Co-operation and Development, Chart I.4, pp42-43. (Note: The OECD's Continuous Reporting System on Migration is known by its French acronym SOPEMI.)

Skilled labour

Among OECD countries, competition to attract and retain highly skilled workers is high. Labour market shortages are appearing across a broad spectrum of skills, with employers increasingly relying on immigrants to undertake low-skilled work in most European countries and the United States. Immigrants account for an increasing share of the low-skilled labour force in OECD countries other than Canada, New Zealand, and Australia.

Canada, New Zealand, and Australia have developed immigration policies that increasingly favour the entry of workers with high levels of education rather than workers with low levels of education. As a result, in these three countries low-educated migrant workers are more likely to be in older age groups. This result is due to low-educated migrants arriving under older policy with less stringent education requirements.

Figure 3.2 Percentage of native-born and foreign-born individuals with low and high levels of education by age in Australia, Canada, and New Zealand, circa 2001

Figure 3.2	Percentage of native-born and foreign-born individuals with low and high levels of education by age in Australia, Canada, and New Zealand, circa 2001

Figure 3.2	Percentage of native-born and foreign-born individuals with low and high levels of education by age in Australia, Canada, and New Zealand, circa 2001

Figure 3.2	Percentage of native-born and foreign-born individuals with low and high levels of education by age in Australia, Canada, and New Zealand, circa 2001

Data table for Figure 3.2

Source: OECD. 2008. International Migration Outlook: SOPEMI - 2008 edition. Paris: Organisation for Economic Co-operation and Development, Chart I.A.1, pp65-67. (Note: The OECD's Continuous Reporting System on Migration is known by its French acronym SOPEMI.)

Migrants with low levels of education are concentrated in specific low-skill occupations. With some countries facing a decrease in their working-age population, it is expected that some low-skilled occupations will experience an increase in demand for migrants to meet labour force shortages. For example, the United States is expecting to need an additional 650,000 nursing aides between 2006 and 2016. In Italy, it is estimated that 40percent of the demand for workers is for people with minimal education, which demand is expected to be met by migration.

Return migration and re-migration

Return migration (that is, migration back to the home country) and re-migration (that is, migration to a third country) are major components of migration flows.

Estimated re-migration rates after five years of residence by a migrant vary by country and period, but most fall between 20percent and 50percent. Traditional countries of long-term migration, such as the United States, Australia, Canada, and New Zealand, retain larger proportions of their migrants than European countries do.[28] This in part reflects the shorter distances between European countries, which make it relatively easier to move between countries.

The relative shares of return migration and re-migration vary by country of origin and country of destination. Migrants from relatively poor countries who have lived in an OECD country are more likely to migrate to a third country. Migrants from countries where living standards are comparable to those in the host country are more likely to return to their country of origin. The longer a migrant stays in the host country, the less likely they are to return home or migrate onwards. Most return migration is driven by individual determinants, often involving a combination of individual and family objectives as well as perceived opportunities in the home country. Explicit policies by host and home countries to encourage or attract return migrants appear to have achieved little when total volumes of migrants are compared with the numbers of returnees.

Impact of global economic downturn

In October 2008, the financial turmoil that had escalated in mid-September deepened. Supplies of credit have dried up, housing values have fallen, share markets have reduced in value, and some industries are seeking government assistance to prevent collapse. The impacts of the turmoil have spread from Western countries to Asian and Eastern European countries. It is likely that many countries will enter recessions sooner rather than later. Although countries were heading into recession before recent events, the economic effects of the financial crisis is likely to cause downturns that are more severe and protracted than previously forecast. The International Monetary Fund has revised down its growth forecasts for all countries.

The global economic downturn has affected New Zealand's economy by constraining credit for firms and households, decreasing house values, decreasing consumption, decreasing commodity prices, and decreasing the exchange rate.

Downturn in New Zealand labour market

The downturn in the New Zealand economy over the first three-quarters of 2008 has led to a softening in the labour market. Job growth is stalling, and the unemployment rate rose to a five-year high of 4.2percent in the Household Labour Force Survey for the September quarter (July-September 2008).[29] The survey also reported a small increase (0.1percent) in employment, all of which was in full-time jobs. These results are better than some commentators expected, but the survey was done before the escalation of the economic downturn.

Of all industries, the accommodation, cafe, and restaurant industry experienced the biggest decrease in employment between September 2007 and September 2008. This result is likely to reflect lower customer spending and fewer tourists.

The labour market is generally expected to weaken further as a result of the global financial and economic downturn. This is highlighted by the employment intentions of New Zealand firms falling to their lowest level since 1993.[30]

Migration flows

Decline in tourism

As in other countries, New Zealand tourism is in decline (see Figure 3.3). Visitor arrivals decreased 3percent from 31October 2007 to 31October 2008. The biggest decreases were of visitors from Asia and the Americas. These visitor numbers are likely to be reflecting travel decisions made before the full impact of the economic downturn was felt, so are expected to fall further.

A falling New Zealand dollar will make travel to New Zealand relatively cheaper, but this is not expected to mitigate the large fall in tourist numbers caused by other factors.

Figure 3.3 Short-term overseas visitors to New Zealand, 1998-2008

Figure 3.3	Short-term overseas visitors to New Zealand, 1998-2008

Data table for Figure 3.3

Note: Short-term overseas visitors are overseas residents who arrive in New Zealand for a stay of less than 12 months. Data on short-term overseas visitors is collected monthly. October data was the latest available at the time of writing.

Source: Statistics New Zealand.

Decline in students

The number of first-time student approvals has continued to increase, but at a much slower rate than in previous periods.

Decline in temporary workers

The number of temporary worker applications accepted increased in August to October 2008 compared with the August to October 2007 period, but the rate of increase in such applications is much lower than in previous years (see Figure 3.4).

Figure 3.4 Temporary worker applications accepted, 2004-2008

Figure 3.4	Temporary worker applications accepted, 2004-2008

Data table for Figure 3.4

Source: Department of Labour.

Looking forward

Given the pace of recent global events, it is harder than usual to predict what the future holds. It will take time for the impacts of the financial downturn to filter through the economy. Globally, consumer confidence and business confidence are lower than they have been, and commodity prices and tourism numbers are down. Although the labour market has not yet been affected as seriously as was forecast, it is likely that unemployment will increase further and employment will start to decrease.

The implications of the global economic changes for migration are complex and multifaceted. New Zealand's economic prosperity, even in a time of economic downturn, depends on New Zealand's ability to attract tourists, students, and skilled migrants. An easing labour market will put emphasis on the policy of employing New Zealanders first, but some skill shortages will continue as will global competition for certain skilled workers.

Opportunities exist for New Zealand if our economy is more resilient or less negatively affected than other potential destination countries. For example, New Zealand might be a preferred destination for skilled workers compared with less-resilient economies. New Zealanders affected by the global downturn overseas might return to New Zealand where they may be eligible for social security. Greater global uncertainty may add to New Zealand's reputation as a safe country and a good place to bring up children. A resilient Australian economy might also attract New Zealanders from New Zealand or from other countries.


[25] OECD. 2008. International Migration Outlook: SOPEMI – 2008 edition. Paris: Organisation for Economic Co-operation and Development. (Note: The OECD’s Continuous Reporting System on Migration is known by its French acronym SOPEMI.)

[26] International comparisons of permanent migration include only legal migration.

[27] New Zealand, Australia, and Canada also have large proportions of migrants in the ‘Accompanying family of workers’ group (31%, 26%, and 33% respectively). Most other countries have no or small proportions of migrants in this particular group.

[28] New Zealand loses about one in four permanent migrants over time.

[29] Statistics New Zealand. 2008. Household Labour Force Survey: September 2008 Quarter, Hot off the Press. Wellington: Statistics New Zealand.

[30] National Bank. 2008. Business Outlook. Available at http://www.nbnz.co.nz/economics/outlook/081030.