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Archive: 'Emerging PI Underclass?'


 Are we really a 'dangerous emerging underclass' ?

  In a controversial recent discussion paper, Massey University Economist Dr Greg Clydesdale asserts that Pacific people have failed to prosper in New Zealand and immigration policy should be changed as Polynesians in NZ display "significant and enduring under-achievement" which may create an underclass and drain the economy.

23rd June 2008: Joris de Bres - the Race Relations Commissioner for the Human Rights Commission - was advised by Massey University that the organisers of the Brazil conference at which Dr Clydesdale was to present his paper have asked him not to come to the conference as his paper has been published prior to the conference (in the media and on the internet) and one of the conditions of conference papers is that they must be new material. One of the concerns expressed at a recent HRC Pacific Fono in Auckland was that Dr Clydesdale would be presenting his defamatory report to an overseas audience. Click on the link below the photos or  click here  to see our report (about 0:45 ).

* To listen to a PIMA interview with Greg Clydesdale conducted by Aaron Taouma on 23rd May 2008 - just click here

  You can also contribute to the debate on the PIMA website's message board:  http://pima.org.nz 

 
The report has been the talk of the Pacific communities on radio, talkback, the press and the reaction from communities has been swift. To read some of the media commentary surrounding the issue as well as Dr Clydesdale's actual discussion paper just go to this website: www.hrc.co.nz/pacificreview

 Unfortunately Dr Clydesdale repeatedly declined our offers to interview him or to participate in a studio discussion on the issue of immigration. On Tagata Pasifika (29th May) Race Relations Commissioner Joris De Bres joined Lisa Taouma in the studio and talked about the Human Rights Commission inquiry into the controversial study and it's worrying repurcussions for Pacific communities nationwide.

* To watch the report and discussion click on these links ( or below the photos ):
May 29 - Emerging PI Underclass?
May 29 - Immigration Discussion


  At a HRC Pacific Fono  in Auckland emotions ran high as people vented their anger at the Clydesdale report, which claimed Pacific migrants were costing the country too much money. The fono was part of the Human Rights Commision's inquiry into the paper due to be presented at an overseas conference in Brazil. The reaction from the Pacific community included looking at what measures can be taken to prevent the flawed paper from being delivered. ( The final outcome of the Human Rights Commision report will be presented at a Diversity Conference in Auckland in August.)

* To watch again click on the link ( or below the photos ):
June 19 - HRC Pacific Fono

* The Human Rights Commission are inviting discussion on the topic. To have your say please go to this website: www.hrc.co.nz/pacificreview  

* TP POLL: We asked whether you agreed with Massey University Economist Dr Greg Clydesdale's report that alleged that Polynesians in NZ display "significant and enduring under-achievement" which may create an underclass and drain the economy. After over 150 votes - 75% disagreed, with 17% agreeing, 5% saying they didn't know, and 3% saying they didn't care.

* Watch a panel discussion on Media 7 (4th June 2008) with Russell Brown looking at the aftermath of the Clydesdale Report and its publication in the Dominion Post, including charges of racism and questions about free speech -  click here  to watch the full programme ondemand.

Russell Brown's Media7 panel discussion with Tim Pankhurst, Barbara Dreaver & Oscar Kightley is also available on YouTube. Click on the links ( or the windows below ) to watch: 

The aftermath of the controversial Clydesdale Report (pt 1)



More on the Clydesdale Report about Pacific Islanders (pt 2)



Below are two academic reviews of Dr Clydesdale's discussion paper by Paul Callister of Victoria University & Paul Hansen of University of Otago.
 

Review of 'Discussion Paper: New Zealand Immigration Policy' 'Growing Pains: The Valuation and Cost of Human Capital' by Dr Greg Clydesdale (Senior Lecturer, Department of Management and International Business, Massey University).

Prepared by Paul Callister, Senior Research Fellow, Institute of Policy Studies, Victoria University .

Overview

  This paper hit the media through, apparently, Dr Clydesdale preparing media releases and sending them and the report to main media outlets. Some academics were able to obtain a copy of the report from the media and this was subsequently circulated by e-mail to a wider group of researchers. Although the paper was labelled a discussion paper, this was an unusual way of release. Generally such papers (e.g. Treasury working papers or Institute of Policy Studies working papers) are placed on a website at the same time as the press releases are put out enabling a debate around the actual report. Not making the report easily available hampered the subsequent debate. As at 22 May the report is still not available via Dr Clydesdale's Massey webpage:
http://www.massey.ac.nz/~wwwmib/staff/clydesdale.htm

  While the remainder of the review will focus on the ideas presented, given that Dr Clydesdale does mention language competency it is worth noting that the paper is full of typos and poorly analysed data. Here is just one example of both poor language and sloppy data analysis in one paragraph.

  p. 5 'For example, for males aged 25-29 who have been in the country 5-10 years 38.8% hare earning less than $20,000 per year while another 5.9% are earning nothing at all.  To put it another way, 44.7% of skilled immigrants aged between 25-29, who have had 5-10 years to cultural acclimatise, are earning less than $20,000.'

  Table 1 of his report shows the first category is not less than $20,000, it is actually $1-$20,000 (so includes a significant number of people who put they earned exactly $20,000). And the 5.9% are not those earning "nothing at all" - the group is Nil/loss. Therefore it includes the self employed whose net earnings may be a loss.

  In addition, in terms of content and presentation, a number of important references are missing from the reference list (such as Poot, Nana and Philpott 1988). Missing references hampers debate as it is important to be able to follow-up sources cited in a paper to assess how they have been interpreted.

  While the paper aims to focus on some important issues such as the benefits of migration, it adds little to this extensive and important international debate as it does not report any original analysis (for example an econometric analysis of migration data). Instead the paper appears to be a draft review of some immigration issues, based primarily on a literature review, with minimal data presented. In this review the sources used in the paper are very selective. For instance in a New Zealand context one might have expected to see names such as Andrew Trlin, Paul Spoonley and Cluny McPherson, all who have written extensively on Pacific migration issues and are part of the same university. Dr Clydesdale appears completely unaware of the research that is being done on the Economic Impacts of Immigration (EII) Programme, the Integration of Immigrants Programme (IIP), and other relevant research by his colleagues at Massey. The author does not need to agree with other New Zealand researchers but it is important to engage in debate with them.

  Other important New Zealand studies that Dr Clydesdale does not refer to include:

- Fletcher M. 1995. "Pacific Islands People in the Labour Market". Labour Market Bulletin. 1995: 124-136
- Fletcher M. 1999. Migrant Settlement: a review of the literature and its relevance to New Zealand. Department of Labour
- Gibson J. 2006. Migration, Income and Health: Evidence from a Natural Experiment. Paper for the Trevor Swan Distinguished Lectures in Economics. Australian National University
- Humphris J & S Chapple. 2002. "An Analysis of Disparity between Pacific and non-Pacific People's Labour Market Outcomes in the Household Labour Force Survey". Labour Market Bulletin 2000-02 Special Issue: 172-193.

A wide variety of papers have been published by Professor Richard Bedford including:

- Bedford , R.D. 2004 'International migration, identity and development in Oceania: a synthesis of ideas', in D. Massey and J. Taylor (eds) International Migration: Prospects and Policies, Oxford: Oxford University Press, 230-256.
- Bedford, R.D., 2006. Skilled Migration In and Out of New Zealand: Immigrants, Workers, Students and Emigrants.  In B. Birrell et al. (eds.), Evaluation of the General Skilled Migration Categories, Commonwealth of Australia, Canberra, pp. 224-251.
- Bedford, R., 2007.  Pasifika Mobility: Pathways, Circuits and the 21st Century.  Presentation to the 'Thought Leaders Dialogue', 30-31 August, Auckland. 
http://ips.ac.nz/events/completedactivities/Pasifika%20project/TLD%20Richard%20Bedford.pdf
- Bedford, R. and Lidgard, J., 1997.  Arrivals, Departures and Net Migration 1984/85 to 1995/96.  In A. Trlin and P. Spoonley (eds.), New Zealand and International Migration. A Digest and Bibliography, Number 3, Department of Sociology, Massey University, Palmerston North, pp. 28-41.
- Bedford R., and Ho, E., 2006.  Immigration Futures: New Zealand in a Global Context, New Zealand Population Review, 32, 2, pp. 49-63.

  Some of these papers provide a more comprehensive review of the history of New Zealand migration policy than found in Dr Clydesdale's paper.

  But, in particular, the report does not refer to the important recent work de Raad, J-P. and Walton, M. (2007) Pacific People in the New Zealand Economy: Understanding linkages and trends. NZIER Report, November 2007
http://ips.ac.nz/events/completed-activities/Pasifika%20project/NZIER.pdf

  The NZEIR report received media attention last year and is easily accessible via the internet. The report included a careful analysis of the current place of Pacific people in New Zealand followed by some modelling to see if there was convergence in both incomes and wealth for Pacific people, a modelling exercise Dr Clydesdale did not do.

  The NZIER report shares some concerns that Dr Clydesdale has in that low skills hold back Pacific people. But the authors of the NZEIR report tried to understand the barriers and, more importantly, explored ways of improving outcomes. The NZEIR report found:

  "While average incomes of Pacific people will converge toward those of non-Pacific people the continued influence of lower-skilled and lower-earning migrants mean that the real per capita incomes of Pacific people will remain well below real per capita incomes of the total population by 2021."

  "Net worth per capita does not look to converge, and the gap may even grow. The main reasons are that the Pacific population is young and that population growth exceeds the increments to wealth from savings."

  But equally the NZIER report took a wider view of outcomes in New Zealand and considered the very important issues of remittances, an area Dr Clydesdale does not touch on. An important question raised by this report was whether remittances and gifting should be seen primarily as consumption (a transfer by workers to family members and community interests, or a payment for goods and services), or as a form of saving. If the latter, then there are assets which are not taken into account and the resources available to the Pacific communities in New Zealand and the wider Pacific may be understated. There is literature to support the view that remittances are an extremely important part of supporting development in the Pacific.

  The NZIER report also provides a clear overview of the demographics of the Pacific population which is important. Examples include:
  "The proportion of the Pacific population born in New Zealand has been steadily increasing and in 2006 60% of Pacific people living in New Zealand were born in New Zealand. In comparison, in 1976, 38% were born in New Zealand and by 1991 this had reached 50%. Dr Clysdesdale does not make it clear that most Pacific people living in New Zealand are not immigrants but are in fact the children and grandchildren of immigrants."

  "In 2006, Pacific people represented 6.9% of the New Zealand population. Providing a simple statistic like this in his report would have helped Dr Clydesdale contextualise the debate."

  "The Pacific population is considerably more youthful than the total New Zealand population. The median age of Pacific people is 21 years, compared with 36 years for the total population. Age is important when considering outcomes in many areas like self employment where generally it is older people who start their own businesses. Dr Clydesdale's report does not discuss the effects of the different age distribution of the Pacific population."

  "There is an association between duration of residence in New Zealand and unemployment rates of overseas-born Pacific People. In 2001, the unemployment rate of very recent migrants was 31.5 percent, 20 percent for those in New Zealand for 1-4 years, and 13 percent for those in New Zealand for 10+ years.  Dr Clydesdale does not use census data in this way. Moreover Dr Clydesdale totally ignores the important consideration of age on arrival. A person who has been in New Zealand for 10 years, for example, may have arrived at the age of 2 years or 52 years. This has a significant impact on the interpretation of available data."

  In his report Dr Clydesdale takes a very narrow view of migration policy as he mainly considers inward migration. Flows to and from New Zealand are very dynamic with New Zealand having one of the highest inflows in the OECD but also one of the largest diasporas. Issues of possible 'brain drain', 'brain exchange' or 'brain gain' are all important in the international literature, but are not touched upon by Dr Clydesdale. New Zealand does not have an option to severely curb migration given our outflows of talented people (which we cannot stop). As an example, over half our doctors now were born overseas and our medical system would collapse without such inflows. It is possible that outward migration has a detrimental impact in cities like Auckland but Dr Clydesdale only considers inward migration.

  It is surprising, given the report has just been released, that there are no data from the 2006 census. There are reports available about the Pacific population using 2006 data on Statistics New Zealand's website but these data do not seem to have been accessed. These data also show major differences in outcomes for the various Pacific groups, whereas Dr Clydesdale seems to treat the population as being homogeneous.

  Where Dr Clydesdale does present data it is generally cross sectional so he does not capture some significant changes over time, most of which have been positive. For example, if Dr Clydesdale had looked at trends in education (from published sources, e.g. Newell, and Perry 2006) [2] he would have seen that in 1981 just 0.6% of the Pacific population in New Zealand held a degree or higher qualification, increasing to 2.7% in 1996 and 3.9% by 2001. Increases are also seen in the proportion of younger Pacific people, aged 25-29, with a degree or higher qualification: an increase from 4.4% in 1996 to 7.1% by 2001. Those holding non-degree post school qualifications increased from 11.7% in 1996 to 16.6% by 2001. Given the increases in enrolments of Pacific students since 2001 these figures will have improved.

  A further general problem with Dr Clydesdale's report is that he uses terms very loosely when it is important in an academic paper to clearly define what he means. An example is the term underclass, an expression that has been the subject of much debate. He could have drawn on writers such as Jencks, C. (1993) Rethinking Social Policy: Race, Poverty, and the Underclass, HarperPerenial, New York, or Buckingham, A. (1999) Is there an Underclass in Britain?, British Journal of Sociology, 50 (1): 49-75. Buckingham (1999: 55) has developed a useful set of criteria for males:

  "the person has a weak attachment to paid work. Buckingham defined this as having spent more than 15 percent of the time since reaching working age not in paid work, excluding periods of study."
  "the person relies on income from the state."
  "if they  has a cohabiting partner this partner also relies on income from the state."
  "they do not own domestic housing assets."

  It is likely if such objective criteria were applied to immigrant groups in New Zealand very few people could be classified as being part of an 'underclass'.

  Equally, Dr Clydesdale swaps between the expression unskilled and low skilled without providing clear definitions. If we treat unskilled as those with no formal qualifications we do find that Pacific and Maori are over-represented in this group. But as Table 1 below shows, nearly a quarter of the European population also have no formal qualifications, so could be called 'unskilled' and could be seen as part of an underclass. Given the size of the European group this would mean they would form most of the potential underclass if defined as based only on formal qualifications. But many people with no formal qualifications have a high level of skills, perhaps through on-the-job experience or training.

[2] Newell, J. and Perry, M. (2006). Trends in the contribution of tertiary education to the accumulation of educational capital in New Zealand: 1981 to 2001. Report prepared for the Ministry of Education. Wellington: Monitoring and Evaluation Research Associates Ltd.

Table 1: Proportion of each ethnic group with formal educational qualifications (highest qualifications), Total counts, 2006
                                                                   
                                                                European       Mäori       Pacific Peoples       Asian
No Qualification                                                  23              36                  31                    11
Level 1 certificate to level 6 diploma                    53              47                  42                     33
Bachelors degree or higher                                  15               7                    4                     28
Overseas Secondary School Qualification              4                0                    9                     23
Other                                                                    6              11                   13                      7
Total                                                                 100            100                  100                  100

(Source: Statistics New Zealand .)

  Again there are some differences in qualifications between Pacific groups. For example 27% of Samoans had no formal qualifications as against 39% of those recording Cook Island ethnicity. The group with the lowest proportion having no qualifications was Fijians at 16%.

  There is also an assumption that people with low skills are less productive than those with higher skills. This is a very narrow economist view. Pay rates, which are often seen as a measure of productivity, depend on a variety of factors including bargaining power and the context in which they are employed. In addition, it is not as simple as Dr Clydesdale's view that there are high tech industries and cost-competitive industries. A high tech industry may heavily depend on an efficient bus service to get its employees to work. In New Zealand 2006 census data tells us that 10% of bus drivers are of Pacific ethnicity, higher than their representation in the overall population. These drivers are part of a set of integrated activities and, while low paid, are far from being a drain on society. The contribute very positively to the infrastructure of New Zealand, and assist New Zealand in reducing carbon emissions by helping get cars off the road. Dr Clydesdale's analysis does not take into account any of these complexities.

  At times Dr Clydesdale equates not being in paid work as being problematic and again sees Pacific people (and at times Asians) over-represented in the 'not in the labour force' category. While in some places mentioning some might be students, there is the general assumption people not in the labour force are not productive. Yet, many will be involved in productive activities, including studying and raising children. In addition, as figure 2 indicates while the percentage of Pacific people who are unemployed or not in the labour force is higher than for Europeans the differences are not major. Again, if not being in the labour force is considered as an element of being part of an underclass, then about a third of Europeans could be in this group.

Table 2: Proportion of each ethnic group in each employment status, Total counts, 2006
  
                                                            European       Mäori       Pacific Peoples       Asian
Employed Full-time                                          50              48                 47                     42
Employed Part-time                                         16              14                 11                      15
Unemployed                                                      3                8                   7                        5
Not in the Labour Force                                  31              31                 35                      38
Total                                                             100            100                100                    100


Some specific points

  There are many specific points that could be challenged. Here are just a few:

  Dr Clydesdale states in relation to Pacific people: "The fact that immigration may be fuelling an underclass is of concern given the higher fertility rates of this group.  They are a fast growing ethnic group growing from 2.1% of the population in 1976 to 6.5% in 2001, including second generation." (Ministry of Pacific Island Affairs: 2002). 

  In the paper there are no real data on fertility presented, and especially any data supporting the idea that it is an 'underclass' from the Pacific who are rapidly breeding. Given that Pacific fertility is not extraordinarily high, and given that New Zealand has some concerns about moving to a period of low fertility, it is unclear why Dr Clydesdale considers the slightly higher (but rapidly declining) fertility of Pacific people to be a bad thing. Simply Googling "Pacific fertility" would have provided Dr Clydesdale with some useful data on Pacific fertility, e.g.
http://www.stats.govt.nz/analytical-reports/fertility-of-nz-women/fertility-nz-women-ethnicity-standards-women-pacific-ethnicities.htm

  These data would have also told Dr Clydesdale that fertility rates vary within the wider Pacific group.

  Dr Clydesdale notes that "Pacific people are over-represented in justice statistics with higher rates of conviction and prosecution than the total population." If Dr Clydesdale had taken time to look at the official data he again would have found a complex picture. http://www.corrections.govt.nz/public/research/offender-volumes-report-2007/documents/prison-sentenced-snapshot-trends.xls#Ethnicitytrend!A1

  For example, take the prison population. In June 2007 there were 2,345 Europeans in prison, 3,196 Maori and just 679 Pacific people. So on an absolute basis, Maori have the highest rate of imprisonment, followed by Europeans, then Pacific people. On a population adjusted basis (denominator those aged 16 and older) in 2007 just 0.4% of the Pacific population was in prison, compared with 0.1% for Europeans and 0.8% for Maori. While higher for Pacific people than Europeans (but lower than for Maori), the vast majority of Pacific people are hard working law abiding citizens. This is not the story that Dr Clydesdale is trying to portray.

  Dr Clydesdale says that the paper is not about race but about culture (p.15), but then argues that "migrants in the 1970s were predominantly from the UK, a source which today still has the best performances (sic)" (p.8) while "migrants from Polynesia & represent a large proportion of immigrants... an obvious underperforming migrants group that not only lowers regional GDP per capita, but when combined with high fertility rates, is in danger of creating a large emerging underclass". Dr Clydesdale is very confused about ethnicity, country of birth and culture. In fact, migrants from the Pacific include Asian people as well as other non-Pacific groups and as UK society changes so does the mix of migrants coming from that country.

  Dr Clydesdale resorts to anecdote reported by the press to support his arguments. As an example he notes: "The government apparatus responsible for filtering in human capital appears to be failing.  Many immigrants on acceptance into the country are finding they can not readily apply their skills and need to gain registration or re-qualification to local standards.  It results in the infamous truth of migrant nurses, teachers and engineers driving taxis or stacking supermarket shelves." (Migrants skills go begging 2005)." 

  And uses conversations with students: "Conversation with my own Asian students reveals that many gained permanent residency on the basis of job offers from employers who had also migrated to New Zealand.  It was revealed it was common practice for these employers to pay Asian immigrants a smaller wage than local workers in return for assistance in the immigration process. Although their jobs might be as simple as being a shop-assistant, the employer would claim they needed to import labour to fill the job.  On gaining residency, the students quickly left the job and gained employment in basic jobs like gas-pump attendant, a reflection on how the market valued their human capital." 

  Both types of reportage are problematic in a serious academic paper.

  Finally, in the conclusion Dr Clydesdale states a 2007 article by Schnepf, concludes that New Zealand was unique in that on average second generation immigrant's achievement is worse than that of the first generation. In fact this article shows a more complex picture. For example Table 3 (p.535) shows that under the PIRLs survey Netherlands has worse outcomes for second generation migrants, and for PISA and TIMSS this is also true for Australia. The paper also says (p.543) "&PIRLS results focussing on younger pupils in primary schools suggest that also second-generation immigrants are better than natives conditional on socioeconomic background in New Zealand." In addition, the paper does not identify country of birth or ethnicity of students so the assumption that Dr Clydesdale makes that this is primarily due to migrants from Polynesia cannot be tested.

 

A brief commentary on "Growing pains: The valuation and cost of human capital", by Greg Clydesdale, Department of Management & International Business, Massey University - Albany

Prepared by Paul Hansen - Department of Economics, University of Otago
 

Preface

  I was asked on 21 May by the Ministry of Pacific Island Affairs to peer review the above-mentioned paper. As I was given a very short period of time to perform this review, it was not possible for me to read any of the cited references. I also openly acknowledge that I am not an expert on immigration, nor am I a 'Labour Economist'. Rather, I am - for want of a better term - a 'general' Economist. My comments are offered here constructively, with the intention of increasing the intellectual content of the current debate surrounding some parts of Dr Clydesdale's paper.

  Given the time constraints, my comments are focussed on the first half of the paper (sections 1 and 2, pp. 1-11), as this seems to me to be the most controversial. The second half (pp. 11-16), though interesting, is less exceptional.

  Overall, I found the paper interesting. Clearly, parts of it are provocative, and it has stirred up lots of debate (see footnote 1). To me, though, the paper reads like an early draft, as it is full of typos and stylistic errors. Perhaps the author will fix these and also maybe consider strengthening some of the paper's content, including the parts commented on below.

Comments

  In the Introduction, Clydesdale begins by considering the main theoretical advantages and disadvantages of immigration for a country. He concludes, "The main focus of New Zealand immigration policy has been on attracting human capital." (For readers unfamiliar with the term, 'human capital' refers to the productive characteristics, broadly defined, of human beings. Increases, or 'investments', in a country's 'stock' of human capital arise through increases in the education and skills of the population, health improvements, and net migration into the country.)

  In addition to potentially increasing a country's human capital, Clydesdale acknowledges six other potential economic advantages of immigration, including technology transfers from overseas and increased economies of scale for domestic producers  arising from larger domestic markets (and see p.2 for the other advantages).  He concludes overall that the empirical evidence for these advantages, both internationally and for New Zealand in particular, is mixed and not particularly robust. I suspect this is true, although I have not had a chance to review the literature referred to.

  It is revealing of the paper's true intentions that the seven positive aspects of immigration are dealt with in a little more than a page. The rest of the paper is concerned with the negative aspects. Related to this, I found the paper's title to be confusing. I appreciate the reference to "Growing pains", but I do not think "The valuation and cost of human capital" is illuminating. Perhaps a better title might be something along the lines of: "The costs of immigration to New Zealand."

  In the second section, "The Auckland Economy and Human Capital", Clydesdale claims that "the goal of immigration has been to generate economic growth." (p.4, my italics). Is this strictly true? Certainly, a goal of immigration has been to generate economic growth. But, logically, I think there are other goals as well - ones that might not necessarily be expected to contribute to economic growth per se. Even if the primary goal of immigration is economic growth, other (i.e. secondary) goals might militate against the achievement of maximum economic growth.

  I have not had time to read the Immigration Act to discover its stated goals in these respects. But as Clydesdale points out (p.5), 60% of recent New Zealand immigrants came in via the "skilled/business" category, whereas 30% entered under the "family sponsored" (or reunification) category and 10% under the "humanitarian" category. Thus, 40% of immigrants are currently accepted for reasons other than their contribution to economic growth per se.

  Whether or not this apparent 60:40 split is desirable from the public's point of view is moot. Logically, though, it seems to me that many people would consider accepting many (at least, some) immigrants into New Zealand on "family sponsored" (or reunification) and "humanitarian" grounds to be desirable. Moreover, it is well known that New Zealand has foreign policy responsibilities in the Pacific region. These responsibilities include permitting people from Pacific Islands to come to live in New Zealand. As discussed on page 9, "Islanders from Niue and Tokelau hold New Zealand citizenship, and therefore [have] unrestricted rights of entry." And for immigrants from other Pacific Islands, "the main entry-type used by this group is family reunification. Pacific Nations (sic ) are the largest source countries under the International/ Humanitarian scheme."

  To sum up to this point, it seems to me that one of the central premises throughout Clydesdale's paper - that the only goal of immigration is to generate economic growth - is questionable. Certainly it is one goal (maybe even the main goal), but there are others as well. If one accepts there are these other goals (as above), then Clydesdale's subsequent discussion of the purported connection between immigration and the relatively poor economic growth performance of the Auckland region (and, by extension, the New Zealand economy) is less significant. This purported connection is now discussed.

  Auckland is the main destination for New Zealand's immigrants, and arguably Auckland's recent economic performance has been less impressive than other New Zealand regions and the rest of country as a whole. If, as discussed above, economic growth were the main goal of immigration, Auckland's poor performance would be puzzling, as "it suggests either economic conditions [in general] are so bad [in Auckland] that they over-shadow the positive effects of immigration, or alternatively, immigration is actually contributing to this poor performance." (p. 4)

  Clydesdale acknowledges that, in addition to the number of immigrants Auckland receives, there is a range of other possible determinants of Auckland's economic performance, such as "exchange rate movements", etc. But sadly (though, not surprisingly given the scale of the task and the data requirements), Clydesdale does not perform such a 'growth' study,  nor does he refer to extant studies. It is impossible, therefore, to infer, as Clydesdale seems to, that high immigration to Auckland has caused its poor economic performance. This is not correct. We simply do not know. As acknowledged by Clydesdale, other explanatory factors may be responsible (or not).

  Clydesdale goes on to compare the labour market experiences of immigrants who have been in New Zealand for different durations, relative to each other and also locally-born New Zealanders. Based on data from the New Zealand Immigration Service, Table 1 in Clydesdale's report presents detailed earnings information for immigrants classified by duration of time in New Zealand, and also for locally-born New Zealanders. The overall pattern is that the longer a person has lived in New Zealand (including having been born here) the higher his or her income.  The 'newer' the immigrant, the lower his or her income. Also, based on other cited studies, the 'newer' the immigrant the more likely he or she is to be unemployed or not in the labour force, and also the less likely she is an employer or business owner.

  Unfortunately, however, the results represented in Table 1, as discussed above, may be spurious as the relationships examined between income and duration of time in New Zealand are essentially bi-variate rather than multi-variate. Other possible determinants of individuals' earnings than their immigration status, age and gender - such as educational qualifications, experience, ethnicity, etc (i.e. the 'standard' explanators of earnings differences from Labour Economics studies) - are likely to be important too, but they are ignored. In other words, the results represented by Table 1 are likely to suffer from missing explanatory variables, so that the effect of immigration status as a determinant of earnings may be over-stated (albeit the qualitative effects may be, a priori, plausible for the reasons Clydesdale discusses).

  Clydesdale's objective of presenting the results in Table 1 is also to examine whether or not the New Zealand Immigration Service's points system for selecting "skilled/business" immigrants is working properly: viz., "a logical place to examine the efficiency of a points system to value human capital is the income immigrant's (sic) earn in the open market." (p. 5). Clydesdale interprets the results (discussed above) as evidence that "skilled/business" immigrants, on the whole, are less successful in the labour market than locally-born New Zealanders. To me, this qualitative result is believable. I imagine that the same sort of result is observed in other countries too. Clydesdale provides an interesting discussion of explanations for this phenomenon (see pp. 6-7).

  On the other hand, what surprised me was Clydesdale's own apparent surprise at "skilled/business" immigrants having poorer labour market experiences than locally-born New Zealanders. According to Clydesdale (p. 5, my italics):

  These immigrants have been given approval under the points system which assesses their human capital. It has determined that these people are "highly skilled migrants who were likely to settle well and make a contribution to New Zealand" . We could rightly expect an economic performance better for these people [immigrants] than the New Zealand average as natives born here are not selected for their human capital.

  Of course it's true that "natives born here are not selected for their human capital", but they undeniably have many 'natural' advantages relative to immigrants, such as English language proficiency, social and business networks, understanding of cultural norms, etc. Clydesdale acknowledges all of these natural advantages as being important, as referred to above. To me personally (the son of an immigrant), it is believable that it can take time (maybe even a generation or more) for immigrants to settle into a new country and succeed economically.

  Clydesdale also compares the labour force participation rates of nine immigrant groups from different regions of the world (see Table 2). In particular, immigrants from Pacific Island countries have the lowest labour force participation rates. He then surveys the generally poorer experience of people of Pacific Island ethnicity (not just immigrants) on a range of economic and social indicators (see Table 4, plus other indicators discussed on pp. 9-10). He also quotes from a Ministry of Pacific Islands Affairs report (2002, p. 17):

  Economically, Pacific people have always faced considerable difficulties in NZ. Their skills are not always suited to the demands of the New Zealand labour market and they have been over-represented in the unemployment, lower skilled workers and low income earners.

  On the basis of this evidence (discussed in Clydesdale's paper), he concludes "the Pacific Islands population is less productive and less likely to contribute to economic growth." Less productive and less likely to contribute to economic growth than who? Other ethnic groups (i.e. on average) presumably. And on the basis of the economic and social indicators discussed (assuming they are accurate).

  Given that New Zealand's ethnic groups (on average)  exhibit a range of performances/experiences on the indicators considered, then, by definition, some groups (on average) will be apparently more productive and more likely to contribute to economic growth, while others will be less productive and less likely to contribute to economic growth (and some will be in the middle!). At any point in time (e.g. now), these things are true by definition.

  But I fail to see why these relative positions must necessarily be the same in the future. Why would they not change over time? Specifically, why would the apparent performances/experiences of the Pacific Islands ethnic group not 'improve' over time, as has happened (and continues to happen) for other ethnic groups? Clydesdale acknowledges that (p. 10, my italics):

  Where Pacific Islanders have similar skills, they do appear to catch up over time. However, the skills and education of this group is not improving at a rate that would allow catch-up with the population, and as a whole they run the risk of becoming an underclass.

  In my opinion, the evidence presented by Clydesdale in support of the assertion in the second sentence of the quote is inadequate. The only evidence presented (see p. 10)  is a quote from a 2004 OECD report: 

 "... even the educational and skill levels achieved by their [Pacific Islands people's] off-spring do not seem sufficient for this group to give the result observed in many OECD countries that second generation immigrants from un-skilled backgrounds do much better than their parents."

  In my opinion, more evidence than this is needed.


[1]
At the time of writing (25 May) there had been a large amount of media and popular attention directed at the paper. For example, a Google search of "Greg Clydesdale" and "growing pains" produced over 200 hits.
[2] Strictly speaking this ought to be for domestic producers of non-traded goods and services, in contrast to traded goods and services.
[3] Clydesdale and the authors he surveys fail to mention that immigration, by increasing a country's population, also serves to increase the tax base from which public goods are funded.
[4] That is, for example, a regression of per capita growth rates on the set of possible determinants, including things such as investment rates, technological change, export performance, etc.
[5] The exception seems to be for the highest annual income bracket of $100,000+. A greater proportion of immigrants who had been in New Zealand for less than 2 years were in this bracket than immigrants who had been in the country for longer or locally-born New Zealanders. This likely reflects the substantial "settlement" or "investment funds" some immigrants bring with them and that are a condition of their entry.
[6] Clydesdale refers to: New Zealand Immigration Service (2003, p. 15; see Clydesdale's references).
[7] See Clydesdale's paper for the reference.
[8] Of course, averages for any group, by definition, mask individual variations.
[9] Note too, that in the Conclusion of Clydesdale's paper, he (belatedly) cites an article by Schnepf (2007).
[10] See Clydesdale's paper for the reference.

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