New Zealand, is one of the OECD countries with large and longstanding labour migration. The report finds that by and large, the New Zealand labour migration system is functioning well. Several features of the NZ immigration system, such as the Expression of Interest system, are gradually about to become an example for selection systems elsewhere in the OECD.
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Publication date: 09 July 2014
- The report finds that by and large, the New Zealand labour migration system is functioning well. Several features of the NZ immigration system, such as the Expression of Interest system, are gradually about to become an example for selection systems elsewhere in the OECD. This also holds true for the Recognised Seasonal Employer (RSE) scheme, which provides a good example of a managed seasonal labour scheme. A further innovative feature is NZ’s elaborate system of labour-market tests and exemptions, which aims at limiting negative impact on the domestic workforce while at the same time responding to employer needs.
- Relative to its population, NZ has the largest temporary labour migration flows in the OECD, which provides the feeder for permanent migration. Indeed, a distinguishing feature of permanent migration to New Zealand compared with many other OECD countries is that it predominantly concerns migrants who are already in New Zealand, most of whom are with a job. This is mainly attributable to the fact that employment in a job considered as skilled or an offer of such weighs heavily in the points system that is used for the admission of permanent labour migrants. About 92% of skilled migrants who are admitted score on this criterion. However, only a select set of occupations provides points, making it essentially an “all or nothing” approach. As a result, it is difficult to get the necessary points for permanent migration if the occupation is not at the required skill level even if it continues to be in demand.
- One option to be considered would be to provide more variation in the system, by giving some – albeit fewer – points also for work experience in New Zealand in lesser-skilled jobs. Adjustments in the points system should also be considered regarding English language knowledge. Currently, there is a minimum English level required from all principal applicants, but higher levels are not rewarded. Such rewards should be introduced, as evidence from New Zealand and from other OECD countries clearly shows that better proficiency of the host-country language is associated with better labour market outcomes. A further adjustment in the points system as recommended by the OECD concerns international students. Their qualifications do not seem to convey large returns and retention is low, which puts into question the bonus points given to these qualifications in the system.
- New Zealand’s permanent migration system is based on three-year target levels for admissions. At present, if inflows persist at the levels observed in recent years, admissions for labour migration will be well below the target. This is not surprising, given the fact that current labour market conditions are less favourable and permanent labour migration is largely demand driven. It should be considered to link the target with labour market conditions, or to remove it altogether and possibly replace it with a cap at a higher level.
- The report also notes that a large part of temporary flows is into low-skilled jobs with little steering possibilities, mainly through the Working Holiday Maker (WHM) Scheme and international student programmes. Both of these are largely unmanaged, and there is little oversight of their working conditions. This stands in remarkable contrast to admissions under the Essential Skills – which in addition often concerns higher-skilled employment – and the RSE, both of which see close examination of occupations, wages and working conditions. Thus, there seems to be some need of strengthening control in the lower-skilled occupations where competition with New Zealanders is most likely. To date, however, the available evidence does not suggest negative labour market impact on the native-born. Nevertheless, the OECD recommends that this should be continuously monitored, as both unemployment – in particular of low-educated native-born youth – and the numbers of WHM and of international students remain high.
For further information, journalists are invited to contact Thomas Liebig (+33 1 45 24 90 68) in the OECD’s International Migration Division. Journalists are invited to download the report from the password protected site or they can contact the OECD’s Media Division firstname.lastname@example.org.