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Settlement Patterns and the Geographic Mobility of Recent Migrants to New Zealand

Introduction

Twenty-three percent of New Zealand's population is foreign-born and forty percent of migrants have arrived in the past ten years. Newly arriving migrants tend to settle in spatially concentrated areas and this is especially true in New Zealand. For example, almost 60% of the adult migrants arriving in NZ between 1996 and 2001 lived in either Central or South Auckland at the time of the 2001 census. A further 10% lived in Wellington and 8% in Christchurch. This paper uses census data to examine the characteristics of local areas that attract new migrants and gauges the extent to which migrants are choosing to settle where there are the best labour market opportunities as opposed to where there are already established migrant networks. We estimate McFadden's choice models to examine both the initial location choice made by new migrants and the internal mobility of this cohort of migrants five years later. This allows us to examine whether the factors that affect settlement decision change as migrants spend more time in New Zealand.

Understanding where migrants choose to live is important for a number of reasons. First, newly arriving migrants may affect the labour market opportunities of both the native-born and previous migrants in local communities and/or might encourage these individuals to move away to avoid potential displacement effects (Borjas 1994; Friedberg and Hunt 1995). Second, recent migrants are potentially more responsive to regional labour market differences in their new country than already settled individuals who may have important connections to their local community and thus migrant inflows might improve the efficiency of labour markets (Borjas 2001). Third, the clustering of migrants in particular locations may have negative impacts on infrastructure because of congestion effects or lead to increased prices for particular goods that are in high demand among migrants, such as housing and urban infrastructure (Poot 1998; Saiz 2006).

A number of recent studies examine the locational choices of migrants (Bartel 1989; Card and Lewis 2005; Chiswick and Miller 2004; Filer 1992; Funkhouser 2000; Jaeger 2007; Zavodny 1999). These studies find consistent evidence that migrants are attracted to areas where there are high numbers of migrants, especially from their own countries, but find mixed evidence on whether locational choices are responsive to spatial differences in local labour market conditions (Bartel 1989; Jaeger 2007). However, all of these studies examine the settlement decisions of migrants to the United States, where legal migration is primarily for family reunification and the majority of migrants are low-skilled. In contrast, New Zealand has a highly structured immigration system that focuses mainly on skilled migrants and has a highly mobile population both internally and internationally (Mare and Choy 2001; Poot and Cochrane 2004; Mare and Timmins 2005). Thus, it difficult to know whether these previous results are relevant for understanding the settlement decisions of migrants in New Zealand.