The Labour Market Outcomes of New Zealand's Old and New Immigrants

This study examines the relative labour market position of immigrants using unit record data from the 1981, 1986, and 1996 Population Censuses. We compare the labour market outcomes of immigrants immediately after arrival in New Zealand and in subsequent years with those of similar New Zealand born individuals, identify the factors associated with differences in labour market outcomes, and analyse the changes in the relative labour market outcomes of immigrants between 1981 and 1996. We find that in the first year after arrival in New Zealand a typical immigrant had a 20 percent lower income than a similar native. This entry disadvantage disappeared after 20-30 years of residence. Convergence was generally quicker for participation and employment rates. However, the evidence suggested a substantial amount of heterogeneity. Most notably, the Asian and Pacific Island immigrants of the early 1990s came with a much larger entry disadvantage than other groups of immigrants or earlier arrivals. The decline in relative labour market outcomes could not be explained by the changing region-of-origin composition, nor by changes in any of the observed characteristics. One possible explanation is that structural changes in the labour market have caused an increased penalty for migrants from predominantly non-English speaking countries.