International Migration

Trends, Policy and Economic Impact

Slobodan Djajic

• Publisher: Routledge
• Year: 2005
• Print ISBN: 9780415237826
• eBook ISBN: 9781134557868
• Topic: Business
• Subtopic: Business General
• Index: Business

This book provides a contemporary perspective on a broad range of international migration problems. It considers recent immigration trends and policies as well as the theory and evidence related to the behaviour of migrants, illegal immigration, and the links between migration and trade, economic growth, and the welfare state.

1
Immigration policies and their impact

The case of New Zealand and Australia

Rainer Winkelmann¹

Introduction

Australia and New Zealand have much in common. Given their geographic proximity, their shared colonial past, and their close economic integration, it should not be surprising that their current approaches to immigration policy are in many ways similar. In particular, both countries emphasize the economic contribution immigrants are expected to make. Yet, there are small but important differences in policy as well. A study of the differences in post-migration outcomes, if any, can thus shed some light on the role of the selection system for the economic success of immigrants. To this end, the chapter provides an analysis of the recent immigration history of the two countries, including aspects of quantity, quality, and policy.

The next section starts with a description of the quantitative dimension of immigration: how many immigrants entered the two countries, and what were the contributions of external migration to population growth. The following section considers qualitative aspects of migration. Finally, an attempt is made to evaluate policy outcomes using empirical evidence on immigrants arriving in the 1990s. It is found that with a limited worldwide supply of internationally mobile skilled migrants, geography and macroeconomic performance appear more important than policy in determining the size and the skill-composition of a country’s potential immigration flows.

Immigration in New Zealand and Australia: a quantitative view

In this section, I will assess the status of Australia and New Zealand as immigration countries in the last decade(s) of the twentieth century.² Both New Zealand and Australia remain relatively unpopulated countries, and hence offer ample opportunity for population growth.³ How were these opportunities perceived and dealt with, and what were the results that followed? An early report of the then just founded Australian Department of Immigration defined in 1945 that Australia’s need for a greater population for the purposes of defence and development would be served well by a population growth rate of 2 percent per annum, 1 percent from natural increase and 1 percent from immigration (Price, 1998). Towards the end of the 1990s, New Zealand’s government set the target for the annual number of residence approvals at 35,000, again about 1 percent of the population, although based more on a judgement of the society’s absorptive capacities rather than on an overall population goal. Thus, it appears that this “1 percent” immigration rule is a useful point of reference against which the empirical evidence can be gauged.

A possible metric for assessing the openness of a country and the effects of international movements of people on its population size is net permanent and long-term (PLT) migration. As island states, both Australia and New Zealand can keep relatively reliable records of border movements through arrival and departure cards. While some details of the system differ in the two countries, the general idea is to ask people arriving (leaving) about their intended duration of stay in the country of arrival (or the country they departed for). Responses of 12 months or longer (but not permanent) are classified as “long-term” migration. Apart from some other socio-demographic characteristics, these cards also contain information on country of birth, country of citizenship, and residence status in the local country.

Table 1.1 provides information on population sizes and net-PLT migration for New Zealand and Australia between 1979 and 1996. New Zealand’s population grew by 16 percent (or 0.8 percent per year) from 3.1 million to 3.6 million. Australia’s population grew by 26 percent (or 1.3 percent per year) from 14.5 million to 18.3 million. Hence, both countries fell short of the overall 2 percent yardstick (for natural increase plus net-migration), but the discrepancy was particularly large for New Zealand. The main culprit was its negative cumulative net-PLT migration, i.e. more people left New Zealand long-term or permanently than arrived. Australia by contrast gained 1.6 million people through external migration, 43 percent of the overall increase in population. However, even Australia’s net-PLT migration never reached the aforementioned 1 percent of the population, with an average net-migration rate of 0.59 percent.

Despite the finding of negative net-migration for New Zealand over most of the period,⁴ New Zealand was an immigration country as well as an emigration country. This apparent contradiction is resolved when New Zealand nationals are considered separately from non-nationals. The third column of Table 1.1 gives the net-PLT migration statistics for non-New Zealand nationals only. It is found that non-New Zealand PLT migration generated a substantial surplus of 240,000 people between 1979 and 1996, 48 percent of the total population growth over the period. Moreover, the trend in non-New Zealand PLT migration is upward, reaching more than 1 percent of the population in 1996. In the early and mid-1990s, New Zealand’s immigration program was substantially larger than Australia’s in relative terms. However, the substantial inflow of immigrants was more than offset by international movements of New Zealand nationals who generated a combined deficit of 342,000 between 1979 and 1996. While there was a net loss of New Zealand nationals in every year, the magnitude was quite volatile, ranging from almost 40,000 in 1979 to less than 2,000 in 1984.

Table 1.1 Permanent and long-term (PLT) migration, New Zealand and Australia, 1979–1996

Most outmigrating New Zealand nationals leave for Australia. The Trans- Tasman Travel Agreement gives full freedom of movement, i.e. nationals can live and work anywhere in the two countries without a requirement of residence or work permits. As a rule of thumb, one in ten New Zealanders can be found in Australia.⁵ Of course, many migrants return, and “permanent migration” is difficult to define in this context. However, of the estimated 404,750 New Zealand nationals who were present in Australia at June 30, 1999, slightly more than half had been there for more than 12 months (DIMA, 2000).⁶ In principle, the TransTasman Travel Agreement would also allow Australians to settle in New Zealand. But this option is taken up much less frequently, and only 54,708 Australia-born people were enumerated in the 1996 New Zealand Census. Hence, Trans-Tasman migration is to a large extent a “one-way street.”

Of course, the emigration decisions of a country’s nationals are not (at least not directly) subject to government policy. By contrast immigration policy directly affects the inflow of non-nationals, whereas settlement policy is one of the determinants of outflow of non-nationals. Hence, one could focus on the gross or net inflow of non-nationals as an indicator of the stance of immigration and settlement policy, rather than on overall netmigration. By this measure, the gap between New Zealand and Australia is reduced indeed. The net-inflow of immigrants, as defined by net-PLT migration, was on average 0.38 percent of the population in New Zealand. In the period 1991–96, the average net-migration rate of non-nationals was 0.68 percent for New Zealand, much higher than the overall net-migration rate of 0.39 percent for Australia.

The long-term importance of immigration for Australia and New Zealand can be assessed also by analyzing the composition of the population at one point in time. Common measures used in this context are the composition of the population by place of birth (i.e. foreign- or overseas-born versus native), the composition including second-generation immigrants, or, more generally, the ethnic composition. These are long-term measures, since depending on mortality, age-at-arrival and the population increase of the native population, the proportion of migrants is affected by the cumulative immigrant flows over the last half century and longer, and there is no simple link between the more recent flows and the overall stock of migrants.

The proportion of foreign-born residents is substantial in both countries: 17.6 percent of New Zealand residents were foreign-born in the last available census of 1996 (Cook, 1997); 23.3 percent of the Australian population were foreign-born as of June 30, 1997.⁷ This gives Australia the lead among the traditional immigration countries. For instance, 17.4 of the Canadian population was born overseas in 1996, and 9.3 percent of the US population. The gap between the proportion of foreign-born New Zealand residents and foreign-born Australian residents mainly reflects historically higher net-migration gains in Australia, built up since World War II. At current immigration rates, the share will stabilize or decline in Australia, but further increase in New Zealand as both the departure of New Zealandborn people and the arrival of overseas settlers push up the proportion of foreign-born. For instance, between 1986 and 1996, i.e. in just ten years, the proportion of foreign-born among New Zealand residents increased by more than two percentage points from 15.4 to 17.5 (Winkelmann and Winkelmann, 1998a).

Immigration in New Zealand and Australia: a qualitative view

In any classical immigration country, a distinction can be made between economic and social migrants. The social stream has again two components, one being family reunification, the other humanitarian. While the humanitarian program tends to be the smallest among the three in Australia and New Zealand (this program includes an annual refugee allocation of 4,000 to Australia and 800 to New Zealand by the United Nations High Commissioner of Refugees, but the total size usually is two or three times as large), family reunification is a major factor, even though various steps have been undertaken over the years to limit the size of this stream.

The emphasis of the further analysis will be on Australia’s and New Zealand’s policy rules for the selection of economic migrants. Only this category provides the immediate possibility of selecting migrants based on personal characteristics and thus exerting a direct influence on “quality” aspects of migration. For New Zealand and Australia, two themes stand out behind the policy changes of the last half-century. The first is the abolition of ethnic background considerations; and the second is the shift from an “occupational needs principle” towards a “general skills principle,” reflecting a change in the perception of the economic benefits of the types of skills that are involved.

Occupational migration

Traditionally, successive New Zealand and Australia governments from the 1950s and 1960s onwards regarded economic immigration as an instrument of labor market policy, to be applied to alleviate skill shortages in particular sectors, rather than as a force for broader economic growth. The mechanism used to control entry on this basis was an “Occupational Priority List.” Employers wanting to recruit persons for occupations not on the list had to demonstrate that no suitable local resident was available or readily trained. In the 1990s the two countries’ policies on this issue started to diverge. While New Zealand completely abandoned occupational targeting in 1991, Australia weakened its importance but nevertheless kept various direct and indirect instruments of occupational selection in place. For instance, preference is given in general to migrants in occupations that are part of a so-called “Migration Occupations in Demand List” (MODL). Moreover, the economic migration program continues to include a so-called Employer Nomination Scheme for skilled persons nominated for a specific skilled position by an Australian employer who has not been able to fill a vacancy from the local labor market or by training.

Cultural diversity

The second important characteristic of immigration policy is its ethnic dimension. The colonial past shaped immigration policy in both countries well into the second part of the twentieth century. For instance, in New Zealand, Commonwealth citizens of European ancestry and Irish citizens had unrestricted right of entry for residence until 1974. A complete break with an ethnic preference system did not occur until 1987 in New Zealand, when a “nondiscriminatory” immigration policy was officially adopted. Prior to 1987, workers from so-called “Traditional Source Countries” were given priority in filling positions on the occupational priority list. To recruit from a nontraditional migrant source country, an employer had to show they could not recruit either in New Zealand or from a traditional source country and that the skills were not in demand in the country of origin (NZIS, 1997). This was a substantial constraint on occupational entry from non-traditional countries.

Traditional source countries were those from which New Zealand had previously taken substantial numbers of immigrants and/or which had vocational training schemes similar to its own. Initially, this list included most countries from Western and Northern Europe, plus Italy and the United States. This was effectively a “white New Zealand” policy, although it was not phrased that way at the time. In the mid-1970s, however, the list of countries was extended, opening up the possibility for large-scale immigration for Pacific Islanders. Pacific Island immigration was also given a boost by a general amnesty in 1976 for a large number of de facto immigrants who had come to New Zealand with temporary work permits and were given permanent residence status. Pacific Island immigration remained important throughout the 1980s.

A review of New Zealand’s immigration policy was conducted in 1986. Factors motivating this review included a desire to acknowledge explicitly New Zealand’s location in the Asia-Pacific region (considering that immigration from within this region might foster trade, attract investment, and increase cultural diversity), and a desire to tidy up some of the administrative and legal shortcomings of the old legislation (Burke, 1986). The resulting Immigration Act 1987 abolished the “traditional source” preference list. It maintained the system of an occupational priority list until it was finally abandoned in 1991.

Australia was notably faster in formally giving up its “White Australia” policy of immigration. The gradual process took place over a period of 25 years and came to a conclusion as early as 1966 when Immigration Minister Opperman, after a review of the non-European immigration policy, announced applications for migration would be accepted from well-qualified people on the basis of their suitability as settlers, their ability to integrate readily and their possession of qualifications deemed useful to Australia.

Table 1.2 Foreign-born population by region of birth, 1995/1996

At the same time, the government decided that a number of non-Europeans who had been initially admitted as “temporary” residents, but who were not to be required to leave Australia, could become residents and citizens after five years (i.e. the same as for Europeans), instead of 15 years previously required. These policy changes triggered a period of steady expansion of non-European migration, and the non-discriminatory immigration policy was reconfirmed and strengthened by various policy reviews in 1973 and 1978, among others.

The cumulative quantitative effects of these policies are visible in Table 1.2, which shows the distribution of the foreign-born population by region of birth for the two countries in 1995/1996. In both Australia and New Zealand, UK and Ireland constituted the most important countries of origin. However, the dominance was much less pronounced in Australia, where other European countries were more represented and, when combined, almost reached the share of UK and Ireland. This reflects the fact that at various times in the 1950s and 1960s, the Netherlands, Germany, Italy, Greece, Turkey and Yugoslavia were important migrant source countries for Australia. For New Zealand, however, the only substantial non-UK inflow from Europe was a Dutch migration wave in the 1950s.

Moreover, Australia in 1995 had a much larger share of immigrants from the Middle East and North Africa, as well as South and Central America, than New Zealand. On the other hand, a disproportionate number of New Zealand’s immigrants came from Oceania, i.e. mainly the Pacific Islands. The share of Asian immigrants was about the same in the two countries, one in five. Overall, though, one can clearly uncover the earlier commitment of Australia to a policy of diversified immigration. Apart from Asian and Pacific Island immigration, New Zealand drew immigrants mainly from two countries, the UK and the Netherlands, whereas Australia attracted migrants from a much wider pool of countries.

Current policy

At first glance, current immigration policies in Australia and New Zealand are very similar. The similarity starts with the official policy objectives. For New Zealand, official statements define goals such as “to allow entry to migrants who would make the highest contribution to employment and income growth” and “to maximise the gain in productive human capital while maintaining provisions for migrants to enter New Zealand for social and humanitarian reasons” (NZIS, 1997). Similarly, for Australia, one finds quotes that immigration should deliver an intake that “has broad-based skills with the capacity to contribute to Australia’s economy” (DIMA, 2000).

In both cases, economic migration is deemed to bring into the country “productive human capital” or “broad based skills.” The motive of short-term fixes for occupational labor market imbalances has been replaced by a longer-term perspective that fits into the current emphasis on a “knowledge society.” In fact, Australia ...

Table of contents

• Cover Page
• Title Page
• Copyright Page
• Tables
• Figures
• Contributors
• Acknowledgements
• Introduction
• 1: Immigration policies and their impact
• 2: Canadian immigration
• 3: The political economy of international migration in a Ricardo-Viner model
• 4: Interactions between international migration and the welfare state
• 5: Trade and migration
• 6: Aggregate-level migration studies as a tool for forecasting future migration streams
• 7: Illegal immigration trends, policies and economic effects
• 8: The decision to legalize by Bulgarian illegal immigrants in Greece
• 9: Illegal immigrants in the US economy
• 10: Immigrant adjustment in Israel
• 11: Why go back?
• 12: Determinants and effects of migrant remittances