Migration to and from New Zealand

A while back I read something on Kiwiblog talking about the reduction in New Zealanders moving overseas.

So what exactly are the drivers underlying New Zealand’s migration?

New Zealanders leaving and returning

I produced graph (1) below from Statistics New Zealand Infoshare data, which shows permanent or long term migration to and from New Zealand, for New Zealand citizens, by quarter for the period 1980 to date.
I have used blue to indicate arrivals into NZ, green to indicate departures from NZ (shown as a negative figure), and brown to indicate net migration of New Zealanders.










One thing which jumps out of this graph is that migration into New Zealand by New Zealand citizens (ie the return of the diaspora) has remained constant for the past thirty years, fluctuating seasonally between 5,000 and 10,000 migrants per quarter.
Thus New Zealanders’ net migration is driven entirely by emigration from New Zealand. I can see three waves of migration in the past thirty years in graph (1), illustrated by my black arrows:
a) 1983-89 post Muldoon , ‘can the last to leave NZ turn the lights out’,
b) 1991-2001, and
c) 2003-2008.
I don’t know enough economic history to posit reasons behind the latter two waves, but it looks like the third wave of migration has abated and the net position is heading back toward zero net migration.
Interestingly, net migration has not stayed positive for more than one quarter at a time at any point since 1980. Thus, over the past thirty years New Zealanders have consistently left New Zealand (as a net position), the only variable has been how many have left in any given quarter.

So is New Zealand’s migration driven by New Zealanders leaving? In a word: partially.

Foreign citizens moving to New Zealand and subsequently emigrating

Graph (2) below shows permanent or long term migration to and from New Zealand, for non-New Zealand citizens (foreign citizens), by quarter for the period 1980 to date.











Here, the number of foreign citizens leaving New Zealand has remained constant, roughly, with 5,000 to 6,000 departures per quarter over the last five years. A example of this behaviour would be migrating to New Zealand and then migrating to Australia four years down the track, due to Australia’s tougher entry requirements from the original country.
The variance in net migration is driven by foreign citizens arriving in New Zealand, with two distinct waves:
a) 1991-1996, and
b) 1999-2002.

Thus we have two strong and highly fluctuating drivers on net migration: New Zealanders leaving the country, and foreign citizens. Which of these is stronger? Graph (3) shows these two migration flows, and their net effect (in brown)











The net effect here (brown line) is highly variable over the past thirty years, and over the last five years this net effect has been roughly equal to zero.

To get back to the original point:

Yes, there has been a marked slowdown in New Zealanders migrating overseas in the past few months. However, this has been cancelled out by an opposing slowdown in foreign citizens migrating to New Zealand.
So, the net migration effect (brown line in graph 3) is roughly equal to zero.

As an example of how this might impact 'ordinary' New Zealanders: If you are looking for a driver behind NZ house prices remaining high, migration is not it. Less New Zealanders are leaving NZ, so this could theoretically increase demand for housing stock. However less foreign citizens are entering NZ, so this would theoretically decrease demand for housing stock.
Net effect on housing due to migration= zero.

Take my breath away....

No reason...

Things which make me smile

1) Coming home to hot pizza and cold wine on the table, and Team America on the box.

2) Seeing the following on my walk to work yesterday:
a) A homeless man doing quite a good robot dance in Trafalgar Square.
b) A man carrying what I can only describe as a mannequin head, where the mannequin is a gorilla. The gorilla mannequin head was adorned with heart shaped sunglasses. The man was stroking the head as he walked along.
c) An elderly couple walking arm in arm, dressed smartly, smiling. When I saw them I immediately wanted to be that guy. Not right now, in 40 years I mean.

US recession and US/UK average hours worked - wonk wonk

To continue on from the previous post about the UK economy, I thought I would see if the US economy was doing any better. Short non-wonky answer: no.

The official US unemployment rate rose last period to 9.5%. This is the highest official employment rate since 1983. You think that is bad? This ignores both underemployed people (ie people employed part time who want to work full time) and job seekers who have become so discouraged that they have given up looking for work. So exactly how deep and long is this recession? Calculated Risk have produced the following easy to read graph which I have copied to illustrate my next two points.















Depth of employment recession

The current US employment recession (red line) is the second deepest since WW2 in terms of recession from prior peak employment, with employment around 4.7% less than December 2007.

The only recession which went deeper was 1948 (navy blue line), and that recession rebounded back to prior peak employment in 22 months, so four months on from this point in time. I don’t know enough post WW2 US economic history to comment as to why the 1948 recession rebounded so quickly, but some kind of post war stimulus seems to be the answer here – maybe the Korean War and the start of the Cold War arms race.

If you look at the trajectory of the red line, there is no way this current recession is going to return to prior peak employment in the next four months, instead it will probably overtake the 1948 recession to become the deepest post WW2 recession.

Length of employment recession

The second thing which strikes me about this graph is the length of time which recent recessions have taken to return to prior peak employment. The 1990 recession (black line) took 30 months to return to prior peak employment, and the 2001 recession (brown line, popping of dot com bubble) took 46 months or just under four years to return to prior peak employment.

Economists describe this lag as a jobless recovery. The recovery is driven by productivity improvement or technological advancement rather than increases in number employed, which is basically the worst possible outcome for anyone remaining unemployed. GDP recovers and becomes positive again, so prices & rents begin to increase again, but the employment market still lags behind its prior peak employment.

Again, if you look at the trajectory of the red line, this current employment recession shows no signs of bottoming out any time soon, let alone returning to December 2007 levels. This current recession could outlast the 2001 in terms of length to become the longest post WW2 recession, but at this stage (18 months on from prior peak employment)

So how do you pick when an economy has bottomed out, and unemployment is about to abate?
One potential indicator is average hours worked. If companies want to increase their output at te end of a recession, their first response won't be to hire new staff in case the recession keeps going. Rather, the company will increase the hours worked by their existing staff.
So what is happening with US/UK average hours worked? Well, both the UK and UK governmental statistics bureaux have nice data mining interfaces, and the respective graphs for average hours worked over the period 1999 to date are as follows:



The US average hours worked isn't moving upward at all, so no pleasure here.





The UK average hours worked has curved up slightly, but it is only a movement from 36.6 hours in the three months finishing March 09 to 36.9 hours in the three months finishing May 09. I would call this statistical noise.



End of wonk.