New Zealand Research on the Economic Impacts of Immigration 2005-2010: Synthesis and Research Agenda

This paper brings together the key research findings of some 20 projects conducted in New Zealand on the economic impacts of immigration from 2005 to 2010. Besides providing a synthesis of this research, knowledge gaps that could be addressed in future research are also identified. The report concludes that immigration has made a positive contribution to economic outcomes in New Zealand and that fears for negative economic impacts such as net fiscal costs, lower wages, and increasing unemployment find very little support in the available empirical evidence. Moreover, the economic integration of immigrants is broadly successful. Once migrants are in New Zealand for more than 10-15 years, their labour market outcomes are predominantly determined by the same success factors as those for the New Zealand born. Migration increases trade and tourism, both inbound and outbound. The net fiscal impact of immigration is positive. Findings on impacts on housing and on technological change are less conclusive. Simulations over a 15-year period with a CGE model suggest that even without additional technological change, additional immigration raises gross domestic product (GDP) per capita, albeit only modestly. Conversely, without net immigration, GDP per capita would be less. The CGE model simulations also suggest that changes in immigration policy and changes in the New Zealand economy over the last quarter century now yield greater economic benefits from immigration than in the past. Future research should focus on: the path of adjustment of the economy over time, following a change in the level of immigration; physical and human capital investment in the economy triggered by immigration; the economic consequences of greater diversity; and differences in impacts between temporary and long-term migration.