Ōtautahi – In 2020, more than one-quarter of New Zealand’s population was foreign-born.
A new Productivity Commission study release today has found that on average migrants make a positive contribution to New Zealand, improving wages, employment and productivity.
While many migrate to escape war or persecution, nearly two-thirds are labour migrants. Most of these migrants move to high-income countries.
Migration has become more important for New Zealand. While most population growth in the last century-and-a-half has come from natural increase (births less deaths), the contribution of immigration has increased in recent years.
The sources of immigrants to New Zealand have diversified from the long period dominated by the United Kingdom and Europe following the signing of Te Tiriti o Waitangi through to the last few decades, which have seen an increase in arrivals from Asia.
This appears to have been driven by immigration policy changes in the 1990s. New Zealand has high emigration and a large diaspora relative to other Organisation for Economic Co-operation and Development (OECD) countries.
New Zealand emigrants are drawn to English-speaking and richer countries. Many of these emigrating New Zealanders have moved across the Tasman.
Migration of New Zealanders to Australia picked up as Australia’s economic performance began to outpace New Zealand’s from the 1970s.
Net migration flows between New Zealand and Australia are dominated by departures from New Zealand to Australia. The reverse flow has remained steady for decades.
The main economic contribution migrants make to the New Zealand economy is what they bring to the country’s workplaces. Gains arise from workers moving to where they can make the most impact, and from firms bringing the best workers from wherever they can be found.
There are several reasons why migration can be welfare enhancing for both the migrant and the country to which they are moving. Migrant workers can fill gaps where skills are unavailable and they can bring ideas – knowledge of foreign markets, of new things to do and new ways to do them.
They will often have overcome financial and social costs and taken risks to make the move, and so can be expected to be highly motivated to succeed. Migration can also have negative impacts on migrants and their destination.
Life may not turn out quite how it appeared it to the migrant before moving. Also, like any increase in population, migration may have negative impacts if resources are constrained. At the national level, immigration can raise the average output per person of the whole economy because migrants are more likely to be of working age.
Migrants make up a comparatively large share of New Zealand’s population and labour force.
In addition to increasing the total production of the whole population, more migrants will also lead to an increase in the tax base.