Aussie: home away from home?

By Shamubeel Eaqub 26/02/2014

Matt and I got talking about immigration off an earlier blog. He asked:

“Could it be that Brisbane feels more at like home for people from the rural North Island and South Auckland than Southland or Auckland City do?”

It got me thinking about why people migrate.

I am currently reading “Exodus” by Paul Collier. (I am only a few chapters in, but it is a good read.) He writes that there are three big drivers of migration. I am paraphrasing from page 38:

  1. It is an economic response to the gap in income. All else equal, the higher the income gap, the stronger the pressure to migrate.
  2. There a number of impediments to migration (economic, legal and social). Costs must be borne before benefits can be reaped. The poor are least able to meet the cost of investment and act as a counter to 1.
  3. Costs of migration are reduced by the presence to a diaspora.

Using this model, it seems pretty clear why New Zealanders choose to migrate to Australia. They reinforce each other:

  1. Australia’s wages are typically around 30% higher than in New Zealand. So the income gap encourages migration.
  2. The impediments to moving to Australia are relatively low. While not eligible for social welfare, New Zealanders are able to work and live in Australia with few legal impediments. The cultural and social gaps are also rather small – even if it is made out to be rather wide. Speaking from person experience – and this is not mean to offend anyone – I found living in Melbourne not too dissimilar to living in Wellington (in a more grown up way). The actual cost of flying there isn’t high either.
  3. New Zealand has a large diaspora in Australia. According to the Australian Census, around 500,000 New Zealand citizen live there.  The most popular are QLD (40%), NSW (24%), VIC (17%) and WA (15%). The New Zealand diaspora encourages migration.

The framework in Paul Collier’s book suggests that migration to Australia will accelerate over time, because the key drivers are reinforcing each other.