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Forecasting Migration Flows to and from Norway: An Economic Model Analysis

This research analyzes migration trends to and from Norway from 1970 to 2008, with a strong focus on economic drivers. Rapid net immigration quadrupled between 2004 and 2008, driven by the North Sea oil and gas industry's growth. The study utilizes economic models to project future migration, emphasizing the role of income differentials and migration costs. The empirical analysis targets migration flows from various OECD and non-Western countries, providing insights into Norway's labor market's dynamics and outlining projections up to 2060.

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Forecasting Migration Flows to and from Norway: An Economic Model Analysis

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  1. 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

  2. Migration to and from Norway, 1970-2008 Rapid growth: Net immigration quadrupled in 4 years

  3. Registered and projected net immigration to Norway Immigration Projections Emigration Net immigration

  4. Migration of Polish citizens to and from Norway Immigration Net immigration of Polish citizens 2003: 300 2007: 13 000 Net immigration Emigration

  5. Migration of Icelandic citizens between Iceland and Norway Thick lines: Statistics Norway Thin lines: Statistics Iceland Iceland  Norway Net Norway  Iceland

  6. Immigration to Norway by registered reason for immigration

  7. 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

  8. 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)

  9. 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)

  10. 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 ))

  11. 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

  12. Sweden  Norway Denmark  Norway

  13. GDP per capita in PPP. Norway relative to OECD

  14. Unemployment rates in OECD and in Norway 1970-2030

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

  16. 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

  17. Gross and net migration flows to Norway History and forecasts

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

  19. Migration from and to EU and other Western countries Estimated on data for 1966-2009 Immigration Net immigration Emigration

  20. 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

  21. Total migration to and from Norway Estimated on data for 1966-2009 Immigration Net immigration Emigration

  22. Thank you for your attention

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