The Contrasting Importance of Quality of Life and Quality of Business for Domestic and International Migrants

30 Pages Posted: 8 Nov 2019

See all articles by Arthur Grimes

Arthur Grimes

Motu Economic and Public Policy Research Trust

Kate Preston

Motu Economic and Public Policy Research

David C. Maré

Motu Economic and Public Policy Research Trust; University of Waikato - Economics

Shaan Badenhorst

Motu Economic and Public Policy Research Trust

Stuart Donovan

VU University Amsterdam

Date Written: June 6, 2019

Abstract

We examine whether bilateral regional migration flows are driven by the city’s quality of life (QL) or quality of business (QB). The QL and QB measures are constructed using (quality-adjusted) rents and wages in each city. QL and QB reflect the willingness to pay of households and firms, respectively, for local amenities. The measures are constructed for 31 urban areas in New Zealand using five-yearly census data covering 1986 to 2013. We adopt a gravity model of regional migration – augmented by destination and origin QL and QB – to model bilateral flows of working-age migrants (post tertiary education and pre-retirement age). We also model flows between urban and rural areas and flows for the urban areas to and from overseas locations. We find different attractors for international versus domestic migrants according to the type of city amenity. International migrants are more attracted to cities with productive amenities whereas domestic migrants are more attracted to places with consumption amenities. Thus, in deciding on the type of city amenity to enhance, city officials implicitly choose the type of migrant that they attract as well as the type of city that may result.

Keywords: migration, amenities, quality of life, quality of business, gravity model

JEL Classification: J61, R23, R58

Suggested Citation

Grimes, Arthur and Preston, Kate and Maré, David C. and Badenhorst, Shaan and Donovan, Stuart, The Contrasting Importance of Quality of Life and Quality of Business for Domestic and International Migrants (June 6, 2019). Available at SSRN: https://ssrn.com/abstract=3477058 or http://dx.doi.org/10.2139/ssrn.3477058

Arthur Grimes (Contact Author)

Motu Economic and Public Policy Research Trust ( email )

19 Milne Terrace
Island Bay
Wellington 6002
New Zealand

Kate Preston

Motu Economic and Public Policy Research ( email )

Level 1, 93 Cuba Street
P.O. Box 24390
Wellington, 6142
New Zealand

David C. Maré

Motu Economic and Public Policy Research Trust ( email )

PO Box 24390
Wellington, 6021
New Zealand
64-4-9394250 (Phone)

HOME PAGE: http://www.motu.org.nz

University of Waikato - Economics

New Zealand

Shaan Badenhorst

Motu Economic and Public Policy Research Trust ( email )

Level 1, 93 Cuba Street
P.O. Box 24390
Wellington, 6142
New Zealand

Stuart Donovan

VU University Amsterdam ( email )

De Boelelaan 1105
Amsterdam, ND North Holland 1081 HV
Netherlands

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