Forecasting migration flows to and from norway using an economic model
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Forecasting migration flows to and from Norway using an economic model. Joint Eurostat/UNECE Work Session on Demographic Projections Lisbon,28-20 April 2010. Helge Brunborg and Ådne Cappelen Research Department Statistcs Norway. Migration to and from Norway, 1970-2008.

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Forecasting migration flows to and from Norway using an economic model

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Forecasting migration flows to and from Norway using an economic model

Joint Eurostat/UNECE Work Session on Demographic Projections

Lisbon,28-20 April 2010

Helge Brunborg and Ådne Cappelen

Research Department

Statistcs Norway


Migration to and from Norway, 1970-2008

Rapid growth: Net immigration quadrupled in 4 years


Registered and projected net immigration to Norway

Immigration

Projections

Emigration

Net immigration


Migration of Polish citizens to and from Norway

Immigration

Net immigration of Polish citizens

2003: 300

2007: 13 000

Net immigration

Emigration


Migration of Icelandic citizens between Iceland and Norway

Thick lines: Statistics Norway

Thin lines: Statistics Iceland

Iceland  Norway

Net

Norway  Iceland


Immigration to Norway by registered reason for immigration


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


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)


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)


Theoretical framework

Migration 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 ))


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


Sweden  Norway

Denmark  Norway


GDP per capita in PPP. Norway relative to OECD


Unemployment rates in OECD and in Norway 1970-2030


Estimation of the rate of migration from groups of countries to Norway


Modelling immigration from Europe and America by OLS, 1972 – 2008, to be used in projections

Dependent variable: LnMt

Coefficient Std.Error t-value

Constant 1.101 0.566 1.95

LnMt-1 0.565 nn.081 6.98

Dummy1993 0.312 0.070 4.46

Dummy1999 0.162 0.073 2.21

Dummy2005 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 1.49

R2 = 0.96 F = 108.5


Gross and net migration flows to Norway History and forecasts


Net immigration to NorwayRegistered 1990-2009 and projected 2009-2060


Migration from and to EU and other Western countries

Estimated on data for 1966-2009

Immigration

Net immigration

Emigration


Migration from and to non-Western countries:non-EU Eastern Europe, Africa, Asia, Latin-America, Oceania except Australia and New Zealand

Estimated on data for 1966-2009

Immigration

Net immigration

Emigration


Total migration to and from Norway

Estimated on data for 1966-2009

Immigration

Net immigration

Emigration


Thank you for your attention


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