1 1 forecasting migration flows to and from norway using an economic model helge brunborg and Ådne...
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Forecasting migration flows to and from Norway using an economic model
Helge Brunborg and Ådne Cappelen
Research Department
Statistcs Norway
Joint Eurostat/UNECE Work Session on Demographic Projections
Lisbon,28-20 April 2010
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-10 000
0
10 000
20 000
30 000
40 000
50 000
60 000
70 000
1970 1975 1980 1985 1990 1995 2000 2005 2010
Immigration
Emigration
Net immigration
Migration to and from Norway, 1970-2008 Rapid growth:
Net immigration quadrupled in 4 years
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Registrert og framskrevet inn- og utvandring
-5 000
5 000
15 000
25 000
35 000
45 000
55 000
65 000
1960 1970 1980 1990 2000 2010 2020 2030 2040 2050 2060
Reg. innvandringReg. utvandringReg. nettoinnvandringFramskrevet LFramskrevet MFramskrevet H
Registered and projected net immigration to Norway
Immigration
Net immigration
Emigration
Projections
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Migration of Polish citizens to and from Norway
Net immigration of Polish citizens
2003: 300
2007: 13 000
Immigration
Emigration
Net immigration
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Islendinger til og fra Norge
-400
-200
0
200
400
600
800
1000
1200
1400
1600
2003 2004 2005 2006 2007 2008 2009
Innvandring
Utvandring
Nettoinnvandring
Innvandring
Utvandring
Nettoinnvandring
Kilde: SSB (tykke streker) og Hagstofa Islands (tynne streker)
Migration of Icelandic citizens between Iceland and Norway
Net
Norway Iceland
Thick lines: Statistics Norway
Thin lines: Statistics Iceland
Iceland Norway
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Immigration to Norway by registered reason for immigration
0
5 000
10 000
15 000
20 000
25 000
1990 1995 2000 2005
Work
Famiy
Refugee
Education
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Norwegian economy
• Rapid economic growth due to oil and gas in the North Sea
• Most of the revenue from the North Sea invested in The Government Pension Fund - Global
• In 2007 the GDP per capita in Norway 76% higher than in OECD
• Low unemployment, 2-4% in recent years
• High demand for labour in the construction sector
• Norway also hit by the financial crisis, but is recovering
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Migration theories
• People migrate when the expected income is greater than the current income, less migration costs (Todaro)
• Individual migration behavior is guided by the search for better economic opportunities (Borjas)
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Methods for projecting migration
• A projection of population must rest, in part, on a projection of immigration. Yet most official immigration projections … rely on ad-hoc assumptions based on little theory and virtually no definable methodology (Howe and Jackson 2006)
• Official statistical agencies: Mostly trend extrapolation
• A few other attempts (Australia <–> New Zealand; British Columbia)
• EUROPOP 2008: net migration flows between member countries will convergence linearly to zero in the convergence year ( 2150)
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Theoretical frameworkMigration from country of origin (o) to country of destination
(d) is a function of individual observables and unobservable characteristics:
ln wo = μo + εo where εo ~ N (0, σo2)
ln wd = μd + εd where εd ~ N (0, σd2)
Decision to migrate:
I = ln (wd/(wo + c)) ≈ (μd - μo - δ ) + εd - εo
c and δ: level of mobility costs.
Migration if I > 0
Probality of emigration from country o to country d:
P = Pr (εd - εo > - (μd - μo - δ ))
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Empirical analysis
Gross flows between Norway and– Denmark– Sweden– OECD countries– Asia and Africa
For Sweden and Denmark:lnMij = a0 + a1 ln (incomei/incomej) + a2 Ginii + a3Ui + a4Uj + a5lnMjj t-1
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Migration from
Sweden to Norway Norway to Sweden Denmark to Norway Norway to Denmark
Constant -10.029 (-24.6) -13.80 (-14.50) -7.25 (-37.4) -13.60 (-19.8)
Relative income - 0.504 (-2.97) 0.131 (1.41)
Inequality 9.254 (5.01)
Unempl. Origin 0.035 (2.76) 0.140 (4.26) 0.060 (5.69)
Unempl.destination - 0.223 (-3.31)1 -0.474 (-4.82) -0.089 (-1.77) -0.035 (-4.21)
Prev. immigration 0.814 (7.00) 0.787 (9.20)
Period 1972-2008 1973-2008 1973-2008 1975-2008
1 This estimate is for the change in unemployment and not the level.
-8 000
-6 000
-4 000
-2 000
0
2 000
4 000
6 000
8 000
10 000
12 000
1970 1975 1980 1985 1990 1995 2000 2005
Immigration
Emigration
Net Immigration
-1 000
-500
0
500
1 000
1 500
2 000
2 500
3 000
3 500
4 000
1970 1975 1980 1985 1990 1995 2000 2005
Emigration
Net immigration
Immigration
Denmark
Norway
Sweden
Norway
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GDP per capita in PPP. Norway relative to OECD
90
100
110
120
130
140
150
160
170
180
1970 1980 1990 2000 2010 2020 2030
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Unemployment rates in OECD and in Norway 1970-2030
0
2
4
6
8
10
1970 1980 1990 2000 2010 2020 2030
OECD
Norway
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Estimation of the rate of migration from groups of countries to Norway
Migration from
“EurAm” to Norway
Norway to “EurAm”
“AfrAsia” to Norway
Norway to “AfrAsia”
Constant -8.55 (-7.89) -12.58 (-17.90) -2.29 (-0.79) 7.50 (64.20)
Relative income 0.953 (4.17) 2.34 (3.88)
Unempl. origin1 0.078 (1.49) 0.079 (5.01) 0.089 (3.09)
Unempl.destination - 0.132 (-3.81) -0.111 (-3.52) -0.62 (-1.69)
Prev. immigration 0.713 (10.00)
Period 1972-2008 1973-2008 1973-2008 1972-2008
σ (of eqcm) 0,069 0.062 0.071 0.061
1 The unemployment variables are specified as changes not levels, except for the effect in the fourth column where there is a level effect.
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Modelling immigration from Europe and America by OLS, 1972 – 2008, to be used in projections
Dependent variable: LnMt Coefficient Std.Error t-valueConstant 1.101 0.566 1.95
LnMt-1 0.565 nn.081 6.98Dummy1993 0.312 0.070 4.46Dummy1999 0.162 0.073 2.21Dummy2005 0.166 0.052 3.21
UnNORt - UnNORt-2 -0.062 0.013 -4.82
LnGDPNort-2 0.669 0.152 4.40
UnOECDt – UnOECD t 0.034 0.023 1.49R2 = 0.96 F = 108.5
1975 1980 1985 1990 1995 2000 2005 2010
10.0
10.5
Lnonasia&afr Fitted
1975 1980 1985 1990 1995 2000 2005 2010
-1
0
1
2 r:Lnonasia&afr (scaled)
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Gross and net migration flows to Norway History and forecasts
-10 000
0
10 000
20 000
30 000
40 000
50 000
60 000
70 000
1970 1980 1990 2000 2010 2020 2030
Immigration
Net immigration
Emigration
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Net immigration to NorwayRegistered 1990-2009 and projected 2009-2060
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Migration from and to EU and other Western countries
-10 000
0
10 000
20 000
30 000
40 000
50 000
1970 1980 1990 2000 2010 2020 2030
Immigration
Emigration
Net immigration
Estimated on data for 1966-2009
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Migration from and to non-Western countries:non-EU Eastern Europe, Africa, Asia, Latin-America, Oceania except
Australia and New Zealand
0
10 000
20 000
30 000
40 000
1970 1980 1990 2000 2010 2020 2030
Immigration
Net immigration
Emigration
Estimated on data for 1966-2009
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Total migration to and from Norway
-10 000
0
10 000
20 000
30 000
40 000
50 000
60 000
70 000
80 000
90 000
1970 1980 1990 2000 2010 2020 2030
Emigration
Net immigration
Immigration
Estimated on data for 1966-2009
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Thank you for your attention