Migrants increase our incomes - NZIER Insight 44

10 February 2014

Bring more migrants to increase incomes

A new Insight from the New Zealand Institute of Economic Research (NZIER) shows that increasing net migration would lift incomes not just for immigrants but for the native population.
An additional 40,000 people a year for 10 years increases GDP per capita by a chunky $410 a year.

“A more ambitious population policy is needed to increase New Zealand’s population.” said Dr Kirdan Lees, Senior Economist at NZIER. “New Zealand’s point-based immigration framework gets the mix of migrants required about right. But we need to do more to keep lifting the number of migrants that come.”

Almost one-in-four New Zealanders are born overseas but the current policy of 45,000 to 50,000 migrants a year is too low and very arbitrary – bringing in more migrants would lift incomes.
Immigrants provide firms with new skillsets, allowing firms to access new markets, new ideas and new products. A deeper population base also helps firms to get big and offset initial start-up or fixed costs that can be high. But our work shows that the impact on incomes outweighs the inflationary impacts of migration.

International studies also point to positive effects of immigration.

"So let’s grow for it and plan to entice more migrants.”

For further information please contact:
Dr. Kirdan Lees
Senior Economist, Head of Public Good Research
021 264 7336
kirdan.lees@nzier.org.nz


Each year NZIER devotes some of its resources to undertake and make freely available economic research and thinking aimed at promoting a better understanding of New Zealand’s important economic challenges. The preparation of this paper was funded from those resources. - See more at: http://nzier.org.nz/public-good