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

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
Migration to and from Norway, 1970-2008 economic model

Rapid growth: Net immigration quadrupled in 4 years


Registered and projected net immigration to norway
Registered and projected net immigration to Norway economic model

Immigration

Projections

Emigration

Net immigration


Migration of polish citizens to and from norway
Migration of Polish citizens to and from Norway economic model

Immigration

Net immigration of Polish citizens

2003: 300

2007: 13 000

Net immigration

Emigration


Migration of Icelandic citizens between Iceland and Norway economic model

Thick lines: Statistics Norway

Thin lines: Statistics Iceland

Iceland  Norway

Net

Norway  Iceland



Norwegian economy
Norwegian economy economic model

  • 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
Migration theories economic model

  • 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
Methods for projecting migration economic model

  • 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
Theoretical framework economic model

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
Empirical analysis economic model

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 economic model Norway

Denmark  Norway





Modelling immigration from europe and america by ols 1972 2008 to be used in projections
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
Gross and net migration flows to Norway – 2008, to be used in projectionsHistory and forecasts


Net immigration to Norway – 2008, to be used in projectionsRegistered 1990-2009 and projected 2009-2060


Migration from and to eu and other western countries
Migration from and to EU and other Western countries – 2008, to be used in projections

Estimated on data for 1966-2009

Immigration

Net immigration

Emigration


Migration from and to non-Western countries: – 2008, to be used in projectionsnon-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
Total migration to and from Norway – 2008, to be used in projections

Estimated on data for 1966-2009

Immigration

Net immigration

Emigration


Thank you for your attention
Thank you for your attention – 2008, to be used in projections


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