Counting on immigration

Dr Rachel Hodder
Insights Newsletter
15 July, 2016

Before making an important decision it is a good idea to take a deep breath and count to ten. Policy decisions should be the same. Stay calm and focus on the numbers.

Immigration policy is particularly contentious. Immigrants are a convenient scapegoat for many pressing issues. Internationally, politicians are exploiting populist immigration fears to push reactionary policy. Just think of Donald Trump.

New Zealand is not immune from such populism either. The housing crisis has ignited anger towards migrants and some politicians look eager to fan the flames.

But immigration policy is too important to be decided with a hot head. Policy is best determined by a calm, careful consideration of quantifiable factors. It’s a numbers game so let’s start counting.

Though it is a truism, the first number that immigration policy must consider is the population. So, how many people do we want in New Zealand?

There are benefits and costs to having a larger population. More people obviously put a strain on infrastructure. On the other hand, more people can also create a more robust and diverse economy.

There is another factor to consider: demographic change. An ageing population needs young people to support it. Bringing in young migrants can help to lower an important number: the average age.   

Economic performance is another key figure to consider. How can immigration boost our economic growth? And how can policy be fine-tuned to extract the most benefits from our migrants?

Skilled migration has obvious economic benefits and potential for large spillovers. But let’s not forget that unskilled immigration can help fill the gaps of important jobs that New Zealanders are reluctant to do. How many skilled and unskilled migrants do we need? How many do we want? And how can policy attract those that we most desire?

I have recently joined the research team at The New Zealand Initiative. I am a quantitative economist – a professional number cruncher if you like. My first task will be to investigate immigration in New Zealand. We want to find out whether New Zealand’s current immigration system works – or how it could be improved.

Making good immigration policy requires more than a deep breath and counting to ten. But let’s urge policy makers to make policy with a clear head and to keep the numbers in mind. We are all counting on them.

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