Migrants and Labour Market Outcomes
IMMIGRANT CHARACTERISTICS OVER TIME
Migration and the labour market
The scope of this research programme is migrants and the labour market; hence, it includes consideration of inward New Zealand born migrants as well as overseas born immigrants. Nevertheless, the main interest is in the labour market characteristics and behaviour of the overseas born immigrants.
This section is concerned with showing the pattern of flows of migrants over time, and following sections are concerned with showing the labour market behaviours of migrants.
This section covers three aspects of the patterns of migrants. By way of introduction, we use time series information from arrival and departure cards to provide:
- a long-term general picture of the rate and shape of inward migration since 1951
- the New Zealand born contribution to the shape of migration since 1979
- a picture of labour demand from 1986-2006.
In section 3, we follow this analysis with an examination of census data from the 1981, 1996, 2001 and 2006 Censuses. This examination provides details of the patterns of migrants in New Zealand from 1981-2006, especially of working age, and the implied inter-census flows.
A picture of inward migration 1951-2006
A general picture of the time pattern of inward migration is obtained from the track of data arising from arrival cards for people who classify themselves as 'permanent and long-term arrivals' or PLT inflows. There are a number of issues around using the data generated by Statistics New Zealand from the arrival and departure cards, and these issues include the number of 'category jumpers' who have a certain intention on entering or leaving and then change their intention. For example, some people say they are arriving in New Zealand permanently or for the long term (i.e. at least for more than a year), but go home or to another country within 12 months. In these cases, they are not PLT on leaving New Zealand.
The PLT inward migration flows can indicate a level of immigrant settlement greater than actually taking place because of this category jumper effect. For this reason, this phenomenon of 'outmigration' is attracting much attention in the research community and among policy makers.
With these caveats in mind, the time series of the PLT flows show an upward trend in inward migration since 1951 and three main bubbles of inflow. The impact of migrants is indicated by the gross migrant inflow in relation to the resident New Zealand population.
Figure 2.1 Annual gross migration inflows 1951-2006
Over the relatively long term from 1951-2006, the trend of long-term migrant inflow per 1,000 residents was 10-12 migrants per 1,000 in the 1950s, lifting to about 12-15 per 1,000 residents from 1960-1985 and then trending upwards quite strongly to be about 20 per 1,000 in 2006.
The increase in the rate of the average inflow during the late 1980s coincides with the 1986 Immigration Policy Review and the subsequent Immigration Act 1987. This introduced a residence system based on specified migrant streams (skills and business, family, and humanitarian) rather than national or ethnic origin. The most important category was the skilled and business category, with the October 2001 New Zealand Immigration Programme subsequently establishing the proportions for each stream at 60%, 30% and 10% respectively. An increasing focus on attracting skilled as well as business migrants since 2001 has seen numerous changes and modifications to immigration rules. These have involved language criteria, as well as increases in the overall points level required. However, the overall trend in migrant arrivals has continued upwards, with policy changes being targeted more at influencing the composition of migrants as opposed to discouraging such arrivals.
In terms of total numbers of migrants, this seems to have followed a relatively steady trend from about 20,000 in 1950 to about 45,000 in 1990. This is an average trend increase of about 600 per annum. From 1990-2006 (years ending March), the trend appears to have increased from about 45,000 per annum in 1990 to about 80,000 per annum in 2006. This is an average trend annual increase of over 2,000.
Superimposed on these trends have been three major bubbles of migrant inflow. These were in 1972-1976, from 1995-1997 and from 2002-2004. In each of these bubbles, the gross inflow was about 23-25 migrants per 1,000 of the then resident population.
The peak years in these last two bubbles were 1996 and 2003. Both were notable for strong inflows from Asia - the first coinciding with the change in governance in Hong Kong and the second with a major increase in Asian students coming to New Zealand. The first of these was characterised by Bedford et al as "the Asian invasion of the mid-1990s".
The strong upward trend has been maintained through the latter two cycles, and we can be reasonably confident of a trend inflow of migrants increasing by about 2,000 per annum. However, in terms of determining labour market outcomes from recent migrants, we must be aware of the effect these bubbles will potentially have had on the profile of immigrants in New Zealand at Census 2001 and Census 2006.
Returning New Zealanders and other migrants 1979-2006
The inward migrant flows discussed above include immigrants and returning New Zealand citizens. In the comparable data we have available for migrant arrivals since 1979 (calendar years), the number of New Zealand citizens returning has been remarkably steady over the period, sitting in the range of 18,000-29,000. The average inflow was 23,000, and in all but four years of the 26-year period, the inflow was in the range of 21,000-25,500.
This implies that most of the variation in the total long-term migrant arrivals has been in the number of non-New Zealand citizen arrivals, as shown in Figure 2.2.
Figure 2.2 Migrant arrivals - New Zealand citizens and non-New Zealand citizens
The pattern has been that, at the beginning of the period in the early 1980s, the number of returning New Zealand citizens was about equal with the inflow of non-New Zealand citizens. From 1992 onwards, the number of non-New Zealand citizens began to trend upwards and, following two sharp bubbles of inflow, appears to be settling at about 30,000 more per annum than the returning New Zealand citizens. It certainly seems that the increase in the overall trend inflow we identified as occurring in about 1990 was due to an emerging trend increase in arrivals of immigrants.
It can also be concluded that the shape of the number of migrant arrivals over time is largely determined by the number of arrivals of non-New Zealand citizens. This, in turn, means that the two most recent bubbles in the inflow were due to immigrants, not returning New Zealand citizens.
Looking at the returning New Zealand citizens, the rate of inflow per 1,000 residents in the 1980s and early 1990s fluctuated really widely in the range from 6 per year per 1,000 to 9 per year per 1,000 residents. The average during the period was 7 per year per 1,000 residents. Since 1992, the rate has been mostly in the range 6.5-7.0 per year per 1,000 residents except in the peak and trough years. The implication is that the relative impact on the population of returning New Zealand citizens is declining somewhat over time. In fact, given that the stock of New Zealanders overseas is increasing, it shows that the propensity of New Zealanders to return to New Zealand is declining.
On the other hand, the impact of non-New Zealand citizens on the population had a reasonably steady increase from 6.5 per year per 1,000 residents in the early 1980s to 7.5 per year per 1,000 residents in the early 1990s. Since then, the trend has increased strongly from about 10 per year per 1,000 residents in 1993 to 15 per year per 1,000 residents in 2005.
A picture of labour demand 1986-2006
The major labour market changes in New Zealand are likely to have affected migrant inflows and so a picture of employment change over the recent period provides a background for interpreting migration changes. The most detailed information on the labour market is available since the introduction of the Household Labour Force Survey (HLFS) in 1986.
The overall cyclical pattern of employment changes was of employment decline from 1987-1990, some fluctuations between 1991 and 1993, and a strong employment growth cycle from 1993-1996. There was a rapid fall between 1997 and 1999 for two years. From 2000 to the present, employment has generally increased in the range of 40,000-60,000 per year.
Figure 2.3 Annual employment change 1987-2006
Apart from illustrating wide fluctuations in employment change over the period, Figure 2.3 illustrates the three features most likely to affect migration over the period from 1981-2006. These are the large job losses between 1988 and 1990, the major growth in employment from 1993-1997 and the steady employment growth between 2001 and 2006.
Migration effects that may be observed in the census data for 1996, 2001 and 2006 are, firstly, the large increase in employment from 1993-1997, which mostly occurred before 1996 and was accompanied by a major migrant inflow, especially from Asia. Secondly, there has been steady employment growth from 2001-2006 and, incidentally, a large inflow across 2002-2003, again mainly from Asia.
 See, for example, Glass, Hayden and Wai Kin Choy, Brain Drain or Brain Exchange?, Treasury Working Paper 01/22, page 15, for a more complete discussion of these issues.
 Bedford, Richard, Elsie Ho, Jacqueline Lidgard, International migration in New Zealand: Context, Components and Policy Issues. Discussion Paper, Migration Research Group and Population Studies Centre, Department of Geography, University of Waikato, Hamilton, New Zealand. October 2000.
 Glass and Choy noted an issue with data from arrival and departure cards as a result of changing seasonality in arrivals, departures and net flows, and that calendar years are not the optimal measure. Indeed, March years are a better option.