Employment status of overseas-born population

Labour force status

This section uses survey data to estimate the labour force status of overseas-born residents.

Household Labour Force Survey

The Household Labour Force Survey (HLFS), which is published by Statistics New Zealand, is the main source of data on labour force status in New Zealand. The HLFS is a survey of approximately 15,000 households or 30,000 people each quarter. The data used in this section relates to those people who were not born in New Zealand and have resided in New Zealand for up to 10 years ('recent migrants').

The labour force participation rate for recent migrants was 68.8 percent in 2008/09, similar to the national annual average rate of 68.6 percent (Table 14). The participation rate for recent migrants rose from 66 percent in 2005/06 to 68.8 percent in 2008/09. Over the same period, the national participation rate increased from 68.2 percent to 68.6 percent.

Table 14: Participation rates of recent migrants to New Zealand, 2005/06-2008/09

Year ended 30 June	Length of time in New Zealand				National
	1-2 years	3-5 years	6-10 years	0-10 years
2005/06	65.7	67.0	65.3	66.0	68.2
2006/07	67.0	69.9	66.1	67.8	68.3
2007/08	63.2	71.4	66.1	67.0	68.2
2008/09	67.5	71.4	67.9	68.8	68.6

Note The participation rate is the proportion of the working age population in the labour force.

Source: Household Labour Force Survey, Statistics New Zealand.

The unemployment rate for recent migrants was 6.7 percent in 2008/09, higher than the national annual average unemployment rate of 5.0 percent (Table 15).

Over 2008/09, the unemployment rate for recent migrants rose from 5.4 percent to 6.7 percent, an increase of 1.3 percentage points. The national unemployment rate increased from 3.7 percent to 5.0 percent.

Table 15: Unemployment rates of recent migrants to New Zealand, 2006-2009

Year ended 30 June	Length of time in New Zealand				National
	1-2 years	3-5 years	6-10 years	0-10 years
2005/06	7.5	4.2	5.5	5.7	3.8
2006/07	7.2	4.5	4.9	5.4	3.8
2007/08	8.1	5.0	3.8	5.4	3.7
2008/09	8.3	5.2	6.5	6.7	5.0

Note: The unemployment rate is the proportion of the labour force that is unemployed.

Source: Household Labour Force Survey, Statistics New Zealand.

Longitudinal Immigration Survey: New Zealand

The Longitudinal Immigration Survey: New Zealand (LisNZ) surveys migrants aged 16 years and over who were approved for permanent residence in New Zealand from 1 November 2004 to 31 October 2005. The survey is conducted in three waves with migrants being interviewed 6 months (wave 1), 18 months (wave 1), and 36 months (wave 1) after they have taken up permanent residence in New Zealand.

Wave 1 interviews were conducted from 1 May 2005 to 30 April 2007, and wave 2 interviews from 1 May 2006 to 30 April 2008. The number of interviewed respondents (both onshore and offshore applicants) was 7,137 for wave 1 and 6,156 for wave 2.^[24]

The LisNZ data provides information on migrants' labour market activity at each wave of the survey. Labour market activity is measured by categorising migrants as employed, not employed but seeking work, or not employed and not seeking work. Overall, 74.3 percent of migrants were employed at wave 2 compared with 71.2 percent at wave 1.

Table 16 shows the change in migrants' labour market status between wave 1 and wave 2 by immigration category. Between wave 1 and wave 2, 8.4 percent of migrants moved into employment and 5.3 percent moved out of employment. Over half of the migrants looking for work at wave 1 were employed at wave 2. Skilled secondary migrants showed the largest movement into employment between waves (16 percent).

Table 16: Migrants' labour market status by immigration category: change between wave 1 and wave 2

Approval category	Employed in wave 2		Not employed in wave 2		Total
	Employed in both waves	Not employed in wave 1, employed in wave 2	Employed in wave 1, not employed in wave 2	Not employed in either wave
Row percent (%)
Skilled principal	90.0	4.2	3.3	2.5	100.0
Skilled secondary	55.4	16.0	6.3	22.2	100.0
Business	48.3	7.7	7.2	36.8	100.0
Family partner	61.6	8.4	8.0	22.0	100.0
Pacific	66.0	10.1	5.0	18.2	100.0
Other*	33.4	5.6	3.7	57.1	100.0
All migrants^	65.9	8.4	5.3	20.4	100.0

^* Includes family parent migrants.

^{^} Excludes 'don't know' responses and response refusals.

Source: Statistics New Zealand. 2008. 'Longitudinal Immigration Survey: New Zealand - Wave 2.' Hot off the Press. Wellington: Statistics New Zealand (accessed 24 September 2009), Table 4.

Occupations of Skilled Migrant Category principal applicants

In 2008/09, 79 percent of Skilled Migrant Category (SMC) principal applicants gained points for a skilled job or job offer in New Zealand. Sixty-seven percent gained points for their current employment and 12 percent had an offer of skilled employment. SMC principal applicants approved onshore were more likely to have a job or job offer than those approved offshore (84 percent compared with 59 percent). One-third gained bonus points for New Zealand work experience.

International students who gain a New Zealand qualification can be awarded bonus points through the SMC policy. In 2008/09, 74 percent of SMC principal applicants gained points for their qualifications and 30 percent gained bonus points for a recognised New Zealand qualification (up from 25 percent in 2007/08).

Occupational data is recorded for SMC principal applicants approved with a job or job offer. Data is captured on the applicant's main occupation (that is, their occupation during the 12-month period before residence). The Australian and New Zealand Standard Classification of Occupations is used to classify occupation data. Table 17 shows the most common occupational groups for SMC principal applicants approved in 2008/09.

Table 17: Main occupation^* of Skilled Migrant Category principal applicants, 2008/09

Major group^	Number	Percent (%)
Total#	9,390	100
Professionals	4,228	45
Technicians and Trades Workers	2,828	30
Managers	1,618	17
Community and Personal Service Workers	348	4
Clerical and Administrative Workers	300	3
Other	68	1

^* Main occupation is the job the applicant spent the most hours doing in the past 12 months.

^{^} Major group is coded to the Australia and New Zealand Standard Classification of Occupations (ANZSCO).

^# This table includes all principal applicants. Applicants whose occupation was not coded to ANZSCO or was classified as 'responses outside of the current definition of the labour force' are excluded from the total.

The SMC attracted skilled migrants in a broad range of sectors in 2008/09. Some of the most common occupations were in health (nurses, physiotherapists), hospitality (chef, restaurant manager), and education (primary and secondary school teachers).

Labour market tested work permit holders

Essential skills and horticulture/viticulture work policies are labour market-tested.^[25] These policies allow New Zealand employers to recruit temporary workers from overseas to meet shortages they cannot meet from within New Zealand, while protecting employment opportunities for New Zealanders.

In 2008/09, 37,278 people were issued with essential skills or horticulture/viticulture work permits, a 6 percent decrease from 2007/08.^[26]

The United Kingdom remained the largest source country with 11 percent of people approved, although this number has decreased by 16 percent since 2007/08. Figure 8 shows the main source countries of people approved Essential Skills and seasonal work permits from 2006/07 to 2008/09.

Figure 8: Source country of essential skills and horticulture/viticulture work permit approvals, 2006/07–2008/09

Note: The percentages show the proportion of all essential skills and horticulture/viticulture work permit approvals by source country and financial year.

Data table for Figure 8

Additional research^[27]

Migrants and Labour Market Outcomes

Research commissioned by the Department of Labour, Migrants and Labour Market Outcomes, investigated the labour market outcomes of migrants to New Zealand.^[28] Labour market outcomes such as income, source of income, labour force status, and occupation were included. The research analysed the relationship between migrant characteristics and their outcomes over time using data from the 1981, 1996, 2001, and 2006 censuses.

The research showed that in 2006, 25 percent of the working age population (those aged 15 years and over) were born overseas. This is compared to 22 percent in 2001 and 18 percent in 1981. Between 2001 and 2006, the working age population grew by around 271,000 people. Of these people, just over 162,000 (60 percent) were born overseas. Between 2001 and 2006, the high-participation working-age group (30-49 years) had a net inflow of 64,200 migrants and a net outflow of 1,200 New Zealand born.

The retention of migrants between the New Zealand censuses has improved. The out-migration rate is the relativity between the existing migrants who leave between censuses compared with those who arrive. For every 100 migrants who entered New Zealand between 2001 and 2006, 24 migrants left. This figure of 24 compares with an overall out-migration rate of 42 between 1996 and 2001.

Labour Market Adjustment of Immigrants in New Zealand

Research commissioned by the Department of Labour, Labour Market Adjustment of Immigrants in New Zealand^[29], used data from the 1997-2007 New Zealand Income Survey to examine the path of economic outcomes of immigrants in New Zealand. The research explored how employment rates, hourly wages, annual income, and occupations for immigrants compared to those of similarly skilled New Zealand-born people and the extent that these changed with years in New Zealand.

The research showed that newly arriving immigrants experience, on average, employment rates that are 20 percentage points lower than comparable New Zealand-born individuals. Their annual incomes are also $10,000 to $15,000 lower.

Immigrants who gain employment work in slightly lower-level occupations and have hourly wages 10-15 percent lower than for comparable New Zealand-born workers. However, after around 15 years in New Zealand, outcomes have generally improved when compared with similar New Zealand-born people.

The research showed that not all immigrant groups experience the same adjustment over time in labour market outcomes. Although the data did not identify migrants' entry category, some differences in outcomes by other characteristics were found, including:

• immigrants from Asia experience a significant pattern of entry disadvantage followed by swift improvement
• immigrants from the Pacific Islands have relatively poor outcomes at the time of arrival, with no improvement as they spend more years in New Zealand
• university-qualified immigrants recover their entry disadvantage relatively quickly, within around 10 years
• immigrant men without qualifications have a much slower improvement, taking around 20 years to recover their entry disadvantage
• immigrants who arrive before they turn 18 years of age have outcomes that are the same as comparable New Zealand-born individuals
• employment rates are much better for the most recent male cohorts (1998-2007) compared with earlier arrival cohorts
• wages are slightly worse for the 1998-2007 entry cohort, although this finding loses statistical significance when country of origin is controlled for.

Settlement Experiences Feedback Survey

The Settlement Experiences Feedback Survey monitors settlement experiences and outcomes for Skilled/Business Stream migrants after 12 months of residence in New Zealand.^[30]

The 2008 Settlement Experiences Feedback Survey included responses from 715 migrants surveyed between September and December 2008. Ninety-two percent of principal applicants and 70 percent of secondary applicants were employed at the time of the survey. Key findings for employed migrants included:

• 42 percent of principal applicants and 19 percent of secondary applicants worked in professional occupations
• the main industry of skilled migrants was health care and social assistance (18 percent)
• 57 percent of principal applicants held a qualification equal to a bachelor's degree or higher
• most principal applicants (88 percent) said their qualifications and skills matched their current job, compared with just over half of employed secondary applicants
• 62 percent of principal applicants earned $50,000 or more before tax compared with 19 percent of secondary applicants
• 76 percent of skilled migrants were satisfied or very satisfied with their main occupation
• principal applicants were significantly more likely to report being very satisfied with their main occupation in the 2008 survey than in the 2007 survey (37 percent compared with 27 percent).
• most principal applicants (92 percent) had no difficulties finding work in New Zealand compared with 79 percent of secondary applicants.

Economic Impacts of Immigration

The Economic Impacts of Immigration study is part of the Department of Labour's wider Economic Impacts of Immigration research programme, which is funded by the Cross-Departmental Research Pool. The study reports on the application of a computable general equilibrium model of the New Zealand economy to investigate the economy-wide impacts of immigration.^[31]

The study modelled changes to the scale of the immigrant inflow and the focus of immigration to target higher-skilled immigrants to better understand the impact of immigration on the New Zealand economy overall and on different parts of the economy. The model also tests the impact of additional influences that immigrants might have on productivity and trade. The results from the model are compared with those from a similar study conducted in the 1980s and a more recent study undertaken for the Australian economy.

From an economy-wide perspective, the increased immigration scenarios investigated resulted in qualitatively similar impacts. In general, the results of the model scenarios found that increased immigration:

• reduces production costs
• improves the competitiveness of New Zealand goods and services, benefiting exports
• benefits domestic investment and/or consumer spending, depending on the skills composition of the immigration inflow
• results in higher revenues to government, which outweigh the impact on spending, so translate into an improvement in the balance of the government's accounts.

The immigration scenarios showed that increased immigration inflows result in a larger economy and gross domestic product per capita increases even with the increase in the population. Furthermore, under the assumptions adopted for the scenarios, increased immigration inflows result in a positive effect on gross domestic product per capita. The current net inflow of around 20,000 overseas born per year results in a significantly larger and more externally focused economy than if there were no inflow of immigrants.

The modelling experiments did not support arguments in favour of entirely high-skill focused or targeted immigration inflows. Such targeting does not appear to significantly increase the overall benefits to increased immigration flows. When an economy grows labour is required at all levels. This finding supports the need for a demand-driven policy aimed at filling genuine shortages and not just focusing on the highly skilled.

Of the assumptions tested, additional benefits increase significantly only when productivity improvements accompany the increased immigration inflow. This suggests that if immigration policies or programmes were to target particular skill categories, the focus should be directed to those skills that have significant potential to improve overall productivity.

Evaluation of the Recognised Seasonal Employer policy

The Recognised Seasonal Employer (RSE) Policy allows for the temporary entry of workers to work in the horticulture and viticulture industries. The evaluation of this policy covers the first two years of its implementation.^[32] The evaluation examines how the policy was implemented, identifies short-term outcomes, and assesses how potential risks were managed. This summary describes the findings from the first full season in 2007/08.

In the first full season of the RSE Policy, 126 employers saw 2,883 overseas workers arrive, of whom 83 percent came from the five Pacific 'kick-start' states.^[33] The bulk of these workers came from Tonga, Samoa, and Vanuatu (2,247).

Overall, the first year of the RSE Policy was successful. Most importantly, employers had a reliable workforce, which meant the labour supply crises of previous years were avoided. Employers accessed workers when they needed them, for the time they needed them. Most workers returned home with savings, which will benefit their families and communities. Workers also reported other benefits such as improved work-related skills and English language skills.

A key indicator of the success of the RSE Policy is the number of skilled workers who return for a subsequent season. Administrative data from the Department of Labour shows about 55 percent of RSE workers from the Pacific who worked during the 2007/08 season returned for the 2008/09 season and most returned to one of their previous employers.

Immigration risks were successfully managed with less than 1 percent of overstayers among the RSE workers who were in New Zealand between April 2007 and January 2009. The displacement of New Zealand workers was reported by just one employer due to overestimating the number of overseas workers required.

While Pacific states have benefited from remittance incomes, the enthusiasm of their communities and satisfied workers, they have also had to manage the problems of unfilled expectations among workers and communities, and pressures from oversubscribed work-ready pools. While it is recognised that the employer is the primary driver of the RSE Policy, the workers' goals and interests must also be considered if the employer is to gain ongoing access to trained workers.

This 'balancing' will require ongoing oversight and management by New Zealand government officials and industry leaders in the immediate to longer term. The findings from the 2008/09 season will be available later in 2009.

Conditions of labour market access for foreign students

Student permit holders are able to undertake employment:

• to fulfil practical course requirements
• for up to 20 hours in any given week during the academic year and during any holidays within the academic year, if they are an eligible student (see conditions below)
• full time during the Christmas-New Year holiday period, if they are an eligible student
• on completing their course.

Students are not permitted to:

• work in self-employment
• provide commercial sexual services
• act as an operator of a New Zealand business of prostitution
• invest in a business of prostitution.

Students may be allowed to work during the academic year and during any holidays within the academic year for up to 20 hours in any given week. In order to work, students must be:

• undertaking a full-time course of study at a private training establishment or tertiary institution of at least two academic years duration; or
• undertaking a full-time course of study in New Zealand, culminating in a New Zealand qualification that would qualify for points under the SMC; or
• undertaking a full-time tertiary course of study of at least one academic year duration as part of an approved tertiary student exchange scheme; or
• undertaking a full-time, full secondary-school year course of study in Year 12 or 13, provided they have written permission from their school and written parental consent; or
• engaged in a full-time course of study of at least 6 months' duration at a private training establishment or tertiary institution, and a visa or immigration officer is satisfied that the primary purpose of the course of study is to develop English language skills, and the student has an International English Language Testing System overall band score of 5.0 or above (General or Academic Module).

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