The Peopling of New Zealand, 1840&1914

The Peopling of New Zealand, 1840-1914

Geo¤ Brooke Preliminary Draft

Abstract This paper examines the migration from the United Kingdom to New Zealand between 1840 and 1914. New Zealand was colonised during the mass migration from Europe that began during the nineteenth century. Migrants from the UK were the main source of New Zealand’s population. These migrants faced alternative destinations that could be reached more quickly, at lower cost, and with a corresponding lower cost of return. Approximately half of the migrants from the U.K. were o¤ered an inducement to migrate. The inducements took the form of discounted and free passages, employment guarantees, and land grants. Beginning with the insights of Hatton and Williamson into the general characteristics of the migration, this paper considers the role of the assisted passages in explaining the decision of migrants to choose New Zealand as a destination. More generally, this paper highlights the role of organisations and bodies external to the family in starting and sustaining migrant ‡ows.

1 Introduction

The colonial settlement of New Zealand took place during the mass migration from Europe that began in the nineteenth century. Approximately 412,000 people migrated from the UK and Ireland to New Zealand between 1840 and 1914, and these migrants were the main source of increase in the European population until the late 1870s. This paper investigates the causes of the decision by these mainly British and Irish migrants to move to New Zealand between 1839, when New Zealand became part of the British Empire, and 1914. The central question is not why the migrants preferred New Zealand to the UK, but why they preferred New Zealand to the well established alternatives, Australia, Canada, South Africa, or, most importantly, the USA?

Of the migrants who arrived in New Zealand from the UK between 1858 and 1914, approximately 47% received some form of inducement to migrate. The data for 1840-1957 are of poorer quality, but the proportion assisted was at least as large. For the majority the assistance took the form of a free or discounted passage, frequently with a loan for part of the balance. For a minority the inducement took the form of a free grant of land, calculated to be equal in value to the total cost of the passage. Assistance within families, an important part of the North-Atlantic

University of Auckland, [email protected]. I would like to thank Tony Endres and Alan Rogers for reading and commenting on earlier drafts of the paper.

1 migration, was channeled through these schemes. Nominated family members were typically given preference in the allocation of assisted passages.

The …rst discounted passages were o¤ered by the New Zealand Company as part of Edward Gibbon Wake…eld’splan for colonization. The discounted passages were o¤ered in the belief that the presence of a large stock of labour would result in a more than o¤setting increase in value of the Company’s land holdings. The passages were tied to the sale of land, and ultimately the New Zealand Company and its a¢ liates failed as a result of poor land sales.

The provinces took control over migration policy in 1852. The three largest provinces by population all engaged in large scale schemes of assistance to attract migrants. The central government became involved in assisting migrants to New Zealand in 1870, taking sole responsibility in 1872, and continued with schemes for assisting migrants to New Zealand. In total, inducements to migrate were available in 62 of the 75 years between 1840 and 1914. Twelve of the thirteen years when assisted passages were not available was the period from 1892 to 1903, a response to the Long Depression.

After 1852 the o¤ers of assistance were the result of a democratic political process. New Zealand had a restricted franchise, but the restrictions were some of the lightest in the world. From the early 1860s, gold-miners were able to purchase the right to vote for £ 1, less than a third of a week’s wages. While rates of political involvement were low, the assistance to New Zealand appears to be of very di¤erent character to the assistance to Brazil. The migrants assisted to New Zealand did not face any labour indenture, and in many years the right to nominate family and friends was universal. In both the importance of the assisted passages and the political environment in which they were o¤ered New Zealand was very similar to the colonies of Australia (Haines and Shlomowitz 1991).

Our understanding of the forces underlying the nineteenth century mass migration have recently improved following Je¤rey Williamson’sand Timothy Hatton’sresearch project. Based on a set of consistent cross-country real wage series (Williamson 1995) and a choice-based model of the migration decision (Hatton 1995), they are able to explain a large part of the migration from Europe. The results of the project are summarized in Hatton and Williamson (1998). They …nd that more than 70% of the decade-average rate of migration from Europe can be explained by relative wages, the stock of previous migrants, the lagged migration and birth rate, and the share of labour in agriculture (Hatton and Williamson 1994). Similarly, more than 80% of the annual rate of migration from the UK can be explained by lags and rates of change of relative wages, unemployment in the sending and receiving country, the stock of previous migrants, and the lagged rate of migration (Hatton 1995).

This paper employs Hatton’s(1995) model to examine the time-series properties of the decade- average aggregate ‡ow, and annual aggregate, assisted, and unassisted ‡ows. At least some dif- ferences between the time-series properties of the assisted and unassisted migration are expected to follow from the fact that the o¤ers of assistance depended mainly on labour market conditions in New Zealand, and were independent of labour market conditions in the UK.

While the Hatton and Williamson research project was successful at explaining the migration from Europe, it had less to say about the choice of destination. In computing the relative-wage ratio they use the weighted average destination choice as measured after the fact. This assumes away the problem of explaining why, given the dominance of North America as a destination,

2 approximately 16% of the migrants went to Australasia. This point has been raised as a criticism of econometric studies of migration by a number of writers (Gould 1979, McKeown 2004, Baines 1994). Baines concludes that a greater understanding of migration can only be gained from family level studies.

Inducements to migrate have, until recently, received little attention in the history of the nineteenth century mass migration from Europe. Numerous bodies and organizations were involved in promoting migration generally, and particular destinations in some cases. These included the Church, landowners facing increasing poor rates, trades unions negotiating for higher wages in the face of blackballing and lockouts, and for-pro…t colonizing companies in the sending country (see for example Gould 1979 p. 617 and Erickson 1949). In the receiving countries these included industries targeting skilled labourers and governments. In response to Baine’s call for more family level studies, this paper draws attention to the role of bodies external to the family that encouraged and assisted the migrants. Migration is a highly path dependent process. Un- derstanding why migrants began to migrate to a particular destination may explain a large part of the subsequent ‡ow. In the case of New Zealand, the original impetus came from a company, and the ‡ow of migrants was sustained by successive governments that promoted and …nanced assisted passages.

The paper is structured as follows. In the next section I brie‡y describe the main features of the migration to New Zealand and the characteristics of the inducements to migrate. In section three I discuss the relevant prior literature. The model, data, and results are presented in section four. In section …ve I consider the role of the assisted passages in in‡uencing the choice of destination, and in the recent history of migration generally. The paper concludes in section …ve.

2 The Migration to New Zealand

If we consider the nineteenth migration in terms of systems, or groups of countries, rather than direct source-destination connections, then New Zealand formed part of the migration system that included the UK and Australia. For both Australia and New Zealand this constituted their dominant migration system. The UK’smigration experience was dominated by the North Atlantic system, connecting the UK with Canada and the USA. Migration within the UK- Australasia migration system, from a New Zealand perspective, was characterized by large net in‡ows from the UK and large gross but small net ‡ows with respect to Australia.

The net migration to New Zealand with respect to Australia, the UK, and all other destinations is shown in Figure {see end}. The data are from the Statistics of New Zealand. In the statistics Australia is grouped with all other destinations within the British Empire from 1853 to 1874 and with Hawaii and the South Sea islands from 1875 to1879. Assuming that all of these migrants travelled to and from Australia overstates the total, but the error is not believed to be large. The major source of net immigration, accounting for more than 75% of the total, was the UK. The ratio of arrivals to departures for the full period is 5.4. That is, 5.4 migrants arrived from the UK for every migrant who departed for the UK.

3 The relative numbers from within the UK can be inferred from the census data on place of birth. Most of the British migrants came from England and Scotland. In addition to these was an Irish population that was only slightly smaller than the Scottish. Relative to Australia, Canada, and the USA, the English and Irish were underrepresented in the 1891 census (Galt, 1995). That New Zealand was disproportionately Scottish can be seen in the fact that uniquely the Scottish born outnumbered the Irish born. Hatton and Williamson (1993, Table 1) report a total direct migration from Ireland to New Zealand of 3,695 between 1876 and 1913. According to the census data on place of birth the Irish born population of New Zealand peaked at 51,397 in 1886. The direct migration from Ireland to New Zealand is not large enough to explain the stock of Irish born immigrants, and suggests that most of the Irish migrants to New Zealand came indirectly, either from Australia or from ports in England. There was also prejudice against the Irish in the advertising and allocation of assisted passages. This was true of the New Zealand Company; it preferred Irish from the Protestant North, while Canterbury and Otago were denominational settlements of the Church of England and the Lay Association of the Free Church of Scotland respectively. Discrimination in the allocation of assisted passages in the 1870s by the government agent, Isaac Featherstone, drew protest from would be-Irish migrants (Akenson 1990).

The voyage to New Zealand was slower and more expensive than the voyage to the USA. Fares are di¢ cult to estimate in the early years as the colonizing organizations typically contracted ships with an additional per passenger charge. The Grasmere, the …rst ship brought from London by the Canterbury Provincial Government, arrived in 1855. The cost per assisted passenger was £ 24.5. The passage rate fell rapidly to £ 16 in the late 1850s and to £ 15 by 1860. The lowest fares were obtained in 1862, at £ 11.26. Thereafter the costs rose again to between £ 13 and £ 15. Between 1871 and 1891 the fares obtained by the government ranged between £ 14 and £ 16 in all years bar three. Assisted migration was reinstated at the higher fare of £ 19 after 1904, and this fare did not change before 1914. The transition to steam took place in the 1880s and 1890s. Under sail the voyage to New Zealand took roughly three months, with voyages longer than 100 days not uncommon. After the introduction of steam the duration of the voyage fell to forty days. By comparison, a passage to the USA cost between £ 4 and £ 6 from 1870 to 1913, and the voyage took approximately ten days by steam ship (Hatton and Williamson 1998, p. 14).

The major economic events of the period, the Otago gold rush and the long depression of the 1880s, can be seen in the net migration to Australia shown in …gure {see end}. According to the o¢ cial data the large gross but smaller net ‡ows with respect to Australia slightly favoured New Zealand, with a ration of arrivals to departures of 1.14. However, the departures to Australia are known to be underreported (Gandar 1979, Mitchell 1998), and more accurate data would move the ratio of arrivals to departures closer to unity, and the contribution of Australian immigrants to peopling New Zealand to less than the 22% suggested by the o¢ cial statistics. Migration with respect to all other destinations was small, both in gross and net terms. The net ‡ow slightly favoured New Zealand, with a ratio of arrivals to departures of 1.06. Overall, other destinations contributed less than one percent of the net ‡ow of migrants to New Zealand.

This migration system, of large net ‡ows from the UK to Australia and New Zealand, and large gross but smaller net ‡ows between Australia and New Zealand, retained its basic character until at least 1930 (Pope 1977). While this system dominated the migration experiences of Australia and New Zealand, it was comparatively unimportant for the UK. Between 1858 and 1914 approximately 400,000 people migrated from the UK to New Zealand. Over the same period more than 12,000,000 British citizens departed for all intercontinental destinations. The migration system that dominated the British experience was the one centered on the North

4 Atlantic, characterized by large net ‡ows from the UK to both Canada and the USA. Explaining the net migration to New Zealand depends on explaining the net ‡ows from the UK, and, as emphasized previously, the way in which migrants were attracted away from the North Atlantic system.

2.1 The Assisted Migrants

The details of the schemes of assistance are summarized in table 1. The data for many of the schemes are incomplete and di¤erent sources have o¤ered con‡icting estimates. Where possible, the most primitive source has been used, in most cases ship registers.1 The schemes are divided into three periods. The …rst, from 1840 to 1852, was dominated by the activities of the New Zealand Colonising Company and its a¢ liates. During the second period, from 1852 to 1872, the control over migration policy was the responsibility of the individual provincial governments. Beginning in 1870 the central government became involved in migration policy, and from 1872 took sole responsibility.

The average fare shown in table 1 is the cost of an adult passage in steerage class. The fares are from ship level data for all except the last period, where the government advertising and internal reports were clear on both the cost of the passage and the amount of the discount to be o¤ered to those assisted. Average cash is the average amount per adult paid by the migrants before embarkation. Employment indicates whether the assistance included an o¤er for employment. The o¤er of land grants is seen as approximately equivalent to an o¤er for employment, and is reported in acres. The …nal column shows the method of …nancing, and the transition from land sales to general tax revenue.

The other signi…cant element of the assistance, beyond what is presented in table 1, is that migrants frequently signed promissory notes for part of the cost of the passage. The focus here is on the cash amount paid because of the ambiguous interpretation of the loans. On the one hand they represented a claim on the migrant’s future income, and so would be included in the decision making calculus. However, the loans also had an informational component. The government could only recover the loan if the migrant found a job at su¢ ciently high wage. The loans were an expensive signal of the labour market conditions in New Zealand, of both the wage rate and the probability of …nding employment. Repayment rates were frequently low. The central government abandoned the use of promissory notes in the 1870s deciding that the cost of recovering the loans was too great. Similarly, the Otago provincial government required …rst one and then two guarantors in the colony before making the loan. Despite this the government published extensive debtor lists in 1869 and 1872.

The New Zealand Company was a for-pro…t entity, operating its scheme of assistance in ac- cordance with Wake…eld’scolonization plan. The company assisted labourers in the expectation that they would make a net pro…t from the sale of land that became more valuable to capitalists as a result of the presence of the labourers. Later a¢ liates, including the Otago and Canterbury Associations were not for pro…t, but operated their schemes of assistance on similar principles. While the schemes were collectively responsible for attracting nearly 12,000 assisted migrants

1 Details of the estimates of the number of migrants, the o¤ers to the assisted migrants and sources used are available on request from the author.

5 to New Zealand, they were …nancial failures. The New Zealand Company ceased operations more than £ 100,000 in debt to the Crown. The Canterbury and Otago Associations were unable to meet their contracted land sales. Following this the Crown, the major creditor of the New Zealand Company, refused to renew their contracts (Burns 1989).

The o¤ers to migrants were typically of free passages for the entire family and employment upon arrival. The Canterbury Association alone insisted on an up front cash payment. The assisted passages were targeted at married couples from a rural agricultural and engineering background. In addition to assistance for labourers, those purchasing land could claw back part of the cost of the land against the cost of their passage or that of a nominated agent. Collectively, the New Zealand Company and its a¢ liates were responsible for assisting more than 11,000 people to New Zealand. These migrants settled Wellington, Christchurch, Dunedin, New Plymouth, and Nelson.

The other signi…cant group assisted to New Zealand during the period were the Fencibles. They were military pensioners o¤ered free passages for themselves and their families, their pension, medical treatment, a cottage on one acre of land, and employment for all work beyond the weekly Sunday muster in exchange for settling a line of defensive villages to the South of Auckland. Finally, a small number of migrants were assisted directly by the British Land and Emigration Commissioners.

In total, more than 15,000 people were assisted to New Zealand from the UK to New Zealand between 1840 and 1852. The available data on the total migration to New Zealand during this period are of poor quality, and so it is not possible to estimate the proportion that were assisted. However, the estimated total European population of New Zealand grew from 2,000 in 1840 to 32,000 in 1852 (Sinclair 1980), and the numbers assisted were slightly more than half of this total increase. For those assisted, the amount paid was less than they would have paid for a passage to the USA. Not only was the per person cost lower, but assistance was available to entire families.

The provinces were formed in their modern form in 1852, and were given control over their migration policy. Following the passing of the Wastelands Act of 1856 the provinces gained control of the receipts from their land sales. This enabled them to fund schemes of assistance from sources other than current tax revenues and unsecured loans. The result was an increase in the scale of e¤orts to assist migrants to New Zealand. The Canterbury and Otago provincial governments operated schemes that were continuations of the earlier association schemes. As- sisted migrants paid some cash in advance and signed promissory notes for part of the balance, with the government paying the remainder. Nomination, with part payment, by friends already in the colony was available and used, however the amounts involved were smaller from other sources. Between 1855 and 1872 the average fare to Canterbury was £ 14.64 per adult, of which the assisted migrants paid £ 4.91 in cash in advance. For the period 1870 to 1872 the average fare to Otago was £ 14.58, of which the migrants paid £ 3.38 in cash in advance. Together, the Canterbury and Otago governments assisted nearly 30,000 migrants to New Zealand. What is notable about the amount paid in cash is its similarity to fares across the Atlantic.

The Auckland provincial government granted free land as an inducement to migrate. Esti- mating the total cost of an adult fare from the UK at £ 20, the government gave all migrants travelling from beyond Australasia 40 acres of land. The grant took the form of a note that could be used at a government land auction, where the reserve price of land was £ 20 per 40 acre section. Any land not sold could be purchased from the government at the reserve price

6 within twelve months. The numbers induced to migrate, and the timing of their migration, are less certain under this scheme. The migrants were responsible for their own passages, and there was a wide window in which to have a grant validated in Auckland and then used in auction. Further, the quality of the record keeping deteriorated in the mid 1860s. An estimated 14,500 were issued with land grants.

Other provinces, including Southland, o¤ered assisted passages to nominated migrants, but on a much smaller scale. In total more than 46,000 people were assisted to New Zealand during the provincial government period. Most received a discount on the cost of the passage, and many were nominated by friends and family already in New Zealand. The important exception was Auckland, where the inducement took the form of a land grant, and there was no preference shown to those with friends and family already in the colony.

From 1870 the central government began taking over assisted migration. The schemes of assistance were matched by plans for large scale public works. John Brogden and Sons were contracted to supply navvies to undertake railway construction work. In addition the government was engaged in assisting migrants directly. After failing to attract the desired numbers of migrants between 1870 and 1873, the government made the assisted passages completely free. The Revolt in the Field followed shortly after this decision, and the government obtained the support of Joseph Arch and the agricultural union in promoting New Zealand as a destination for striking labourers. The result was the two most important years of migration to New Zealand. Roughly 30,000 migrants were assisted to New Zealand in 1874 alone.

The government scheme underwent a number of changes between 1871 and 1914. Aside from changes in the magnitude of the assistance, there was also a shift from trying to attract all suitable migrants to trying to attract only people nominated by friends and family already in the country. During the 1880s the government o¤ered assisted passages to farmers with small capital, although the reports suggest that the numbers attracted under this scheme were small relative to those nominated. The government stopped assisting migrants in 1892, a decision that coincided with the Long Depression. In 1904 the government started assisting migrants again, this time targeting capitalists. Those with more than £ 50 in capital could obtain a passage for £ 10, with the government paying the remaining £ 9.

Assistance for men eligible for military service was discontinued in 1914 following the outbreak of WW1. While assistance was restored after the war, it coincided with increasing restrictions on migration, and a narrowing of the choice in destinations for many migrants.

A central claim of this paper is that those assisted to New Zealand would not have migrated in the absence of the assistance. In large part the assistance was a substitute for assistance within families. Using average nominal wage rates with no allowance for unemployment, holidays, and illness will overstate the ability of New Zealanders to save for passages for friends and family. For example, in 1874 the average daily wage rate in the four major centres ranged between 6 shillings and sixpence and 8 shillings per day. At that rate, a labourer employed for six days per week and 52 weeks of the year would earn nearly £ 125 per annum. At a savings rate of ten percent, and this upper bound on income, a labourer would be able to pay the passage of a single adult after …fteen months.

The earliest reliable data on time loss to unemployment comes from the Household Survey of 1893 (Appendices to the House of Representatives Journal, 1893, H. 10). Respondents indicated

7 their ordinary weekly wage rate, their loss of income to unemployment, sickness and holidays, and the total household income from all sources. As such, the results of this survey give some indication of the ability of households to fund the passages of other family members. Excluding households with incomes of over £ 200 per annum, average savings were 19.2d. per week, or 3.6% of household expenditure. The median household did not save. In addition to explicitly reported savings, the average household had a surplus on reported expenditure of 19.5d. per week, the median of 24.1d. per week. If we combine the explicit savings with the surplus, then the average family had savings of £ 8, 7s. and 14d. At that rate of savings, a passage could be purchased in slightly less than two years.

The time to save for a passage would have been lower in the UK. Wages in New Zealand exceeded those of the UK by 1860, and there were greater opportunities for home production in New Zealand. It is perhaps not surprising that large scale schemes of assistance were common to both New Zealand and Australia, and little used elsewhere. It was di¢ cult for any individual to assist a family member privately.

This raises the question of why the passages were o¤ered, and who bene…ted from the schemes of assistance. Gould interprets the assisted passages as serving the interests of the elite and landowners and acted simply to suppress wages. He argues that:

(A)side from the perception of the value of immigrants in keeping down wage rates, the dominant class of great landowners and land companies associated heavy immigration with rising land values. Further, the strong and widespread (if possibly erroneous) belief that large-scale immigration yielded bene…ts to the economy as a whole helped this politically-dominant class to induce the state to pay for assisted immigration. Since this was paid out of taxation either directly or indirectly (via the servicing of government borrowing overseas) and since taxation in late-nineteenth- century New Zealand was chie‡y indirect and regressive, the situation was fundamentally that the dominant landed class used assisted immigration to enrich itself at the expense of the poor. (Gould 1980, p. 279)

This argument does not stand up to scrutiny in several respects. First, there were at least three periods when assisted passages were targeted at potential employers rather than labourers. The Auckland provincial government o¤ered grants of free land, the central government o¤ered free passages and land grants to small-scale farmers, and with the resumption of assistance in 1904 the government targeted migrants with at least £ 50 in capital. To the extent that these schemes were successful, they targeted migrants who would compete with the elite, and bene…t labourers. Second, the expected increased land values frequently did not materialize. As discussed previously, much of the cost of the passages for migrants brought out by the New Zealand Company and its a¢ liates fell to the Crown.

Part of the answer to Gould is at the core of Harley’s (1997) criticism of the uncritical use of the Stopler-Samuelson trade theorem. In the periods when assistance was most important, the available land was not all under cultivation. The increased population could be absorbed at constant land rent and wage rate if it coincided with a proportional increase in the area of land under cultivation. There are no data on land used for meat production in the nineteenth century, however there are data on the number of acres devoted to wheat, barley, oats, and potatoes. In

8 addition to a rapid increase in the late 1870s, the data show increasing land under cultivation up to approximately 1900 (Mitchell 1998).

A more plausible explanation for the popularity of the schemes of assistance is that it was believed that there were increasing returns to a larger population, that assisted passages served to accelerate the process of population growth, and that the assisted passages o¤ered people a means to cheaper and quicker family reuni…cation. Pope (1981) argues that Australia’s scheme that operated between 1900 and 1930 was motivated in large part for an acceleration of the peopling of Australia. The importance of the assisted passages to family reuni…cation is hard to quantify, but nomination was an important component of the largest schemes.

This paper does not directly deal with the question of information, and the role of the agents promoting the assisted passages in disseminating information about New Zealand generally. Hud- son (2001) describes the activities of the agents of the New Zealand Company. They advertised in newspapers, distributed handbills, and gave public talks about New Zealand as a migration destination generally and the assisted passages in particular. All subsequent schemes employed agents to promote them. A sense of the magnitude of the e¤ort expended on making migrants aware of the assisted passages can be seen in the activities of the Agent General in the early 1870s. Advertisements were place in 151 newspapers in the British Isles, including the Times (weekly) and the Standard and the Telegraph (twice weekly) (AJHR, D.-2, p. 20, 24). There were standard advertisements promoting the scheme generally, as well as special advertisements advertising free passages for single women. In addition to the newspaper advertisements, the passages were promoted by 177 agents, most part-time, but a number full-time (AJHR, D.-2, p. 20, 24).

3 Prior Literature

Since Ravenstein (1885) set out his laws of migration, the economic approach to explaining migration has relied on the claim that people migrate to higher wages. Despite the observation that the majority of the …fty million migrants who left Europe between 1850 and 1914 did improve their material standard of living, demonstrating this connection proved di¢ cult. In surveying econometric studies of migration, Gould (1979) noted that the evidence for the importance of unemployment is more compelling than the evidence for the importance of income di¤erences, and that the most consistently important variables were those relating to the lagged rate of migration and the stock of previous migrants.

More generally, all of the econometric studies surveyed by Gould su¤ered from both technical and conceptual problems in their speci…cation (Williamson 1974, Gould 1979, Hatton 2010). The most important conceptual problem was the use of the push-pull dichotomy instead of a fully speci…ed choice-based model of the migration decision. The emphasis on push versus pull

9 Table 1: Free and Assisted Passages, 1839-1914 Source Passage Period Number AverageFare AverageCash Employment/land Financing

NZCompany Free,discounted 1840-1850 9,500 Yes Landsales,loans CanterburyAssoc. Discount,somewithloans 1850-1852 2088 Yes Landsales,loans Fencibles Free 1847-1852 2,581 Pension,1acre Crown BritishL&EComms 1843-1844 957

10 Auckland No 1858-1868 14,560 40acres/fare Landsales Canterbury Discountandloan 1855-1872 19,096 14.64 4.91 No Loans,landsales Otago Loan,laterfreeforwomen 1855-1872 10,584 14.58 3.38 No loans,landsales Southland 1863-1864 1,347 BritishL&EComms 1854-1863 596

Brogdens Loan,upto£16 1872-1873 2,066 18.17 0 Yes,2yrs. Loans,taxation CentralGovt £5cash,twochildrenfree 1871-1873 11,658 14.3 2.3 No Loans CentralGovt Free 1874-1892 99,483 14.1 0.2 No CentralGovt Discount,govt.payingexcess 1904-1914 37208 19 10 No Loans,taxation *Fare and cash data are for 1869-1871 only. factors attempted to relate ‡uctuations in migration to the business cycle, and determine whether migrants where pulled to the new world or pushed out from the old. The use of the push-pull dichotomy led to disagreement over the speci…cation of regressions, of the way in which the income and unemployment variables related to each other in the migration decision.

In addition to the a lack of clarity over the decision calculus, a number of period-speci…c features had been noted but not fully incorporated into modelling the migration. Easterlin (1961) tied the start of the migration to the lagged demographic boom, arguing that the rapid increase in the number of twenty-year olds entering the market not only increased pressure on the labour market to absorb them, but also increased the proportion of the population in the age group most likely to migrate. Increasing rates of migration were also linked to the spread of industrialization. Industrialization increased the stock of the population able to migrate while also reducing the economic incentive for migration (Hatton and Williamson 1998, p. 36). Initially the increased ability to migrate dominated, but as the wages converged the incentive to migrate disappeared. Finally, the earlier studies had di¢ culty in incorporating one of the central observations of historical studies of the migration, that later migrants follow earlier migrants in very narrow channels, often …nancing part of their passage.

Following Gould’s wide ranging critique of the literature, the …eld went into something of an hiatus that ended with the Hatton and Williamson project. At the core of their project was a set of cross-country real wage series (Williamson 1995) and a choice based model of the migration decision (Hatton 1995). Hatton and Williamson (1994) are able to demonstrate the importance of relative wages, unemployment, the demographic forces suggested by Easterlin, the friends and family e¤ects emphasized in the history literature, and the fundamental similarity of the migration experience as it followed industrialization across the face of Europe.

While the Hatton and Williamson project was successful in demonstrating the importance of the underlying economic forces, a number of criticisms raise by Gould (1979), Baines (1994), and McKeown (2004) remain unanswered. First, if the USA was best destination then why did any migrants go elsewhere? Second, why, and how, did the destination choice of migrants from some countries change over time (while remaining constant for others)? In particular, why did migrants from the UK shift their preference from the US to Australasia, while those from Spain consistently preferred South America to the US?

Part of the answer lies in the role of previous migrants. One of the central observations of the literature is that migrants follow previous migrants in narrow migration channels. In addition to assistance with the cost of the passage and information about the destination, there is also a desire for family reuni…cation, and the improved chances of …nding employment. [add refs for Scandinavian rates of assistance]

4 Modelling the Migration

A general statement of the decision process is that a person will migrate if, given the available information, a decision criterion is met and the decision to migrate is feasible. Economic studies of migration typically emphasize di¤erences expected income as the sole or main element of the

11 decision criterion. Other possible motivations for migrating include a desire for reuni…cation with friends and family, increased social position, and independence. These alternatives are not mutually exclusive, many of the nineteenth century migrants from Europe gained on all of these criteria.

The desire for social position or independence is di¢ cult to quantify, although was an important motivator for religious minorities facing persecution (Gould 1980, p. 268-271). The desire for family reuni…cation raises the question of who should migrate. In the nineteenth century the answer was most frequently that family members in low-wage old world countries migrated to join family members who had migrated to high-wage new world countries. Thus, the direction of family reuni…cation was largely driven by the di¤erences in real incomes emphasized by econo- mists. In this sense the desire for family reuni…cation is still subject to economic motivation in the direction of migration.

A conceptual di¢ culty in including the in‡uence of friends and family in the migration decision is that they impacted all three elements of the decision calculus. First, as discussed, there was a desire for family reuni…cation, and so the their in‡uence is part of the objective function. In addition, family members could assist with job search for new migrants, and so increased the expected income gains from migration. Second, friends and family were an important, credi- ble, source of information about the destination. Third, previous migrants frequently provided …nancial assistance with the cost of the passage.

In addition to the direct in‡uence of friends and family is the desire to migrate to a familiar social and cultural environment. Even for migrants who …nanced their own passage, it is likely that they preferred destinations where they could read and speak their home language, and observe their chosen religious beliefs. While conceptually separate from the direct in‡uence described above, the two e¤ects have been di¢ cult to separate in practise.

The importance of previous migrants to both the choice of destination and the …nancing of the passage leads to chain, or path dependent, migration that is emphasized by historians (Baines 1994). However, the existence and importance of these chains raises di¢ cult questions about explaining changes in the choice of destination. While econometric studies have di¢ culty in explaining why migrants chose particular destinations, approaches that emphasize the path dependent nature of migration struggle to explain how migrants shift their destination choice.

The econometric analysis in this study is based on the model derived by Hatton (1995). Hatton begins with the change in utility that will result from migrating:

dit = Eu (yf ) Eu (yh) + zi:

The expected di¤erence in income is given by Eu (yf ) Eu (yh), the di¤erence between the wage in the sending and receiving country respectively. A time trend and the in‡uence of all previous migrants are captured in zi, while Hatton notes that the previous migrants may also assist with the cost of the passage. Hatton then solves the model with log utility and, following Todaro (1969), uncertainty about the probability of …nding employment. The main result of the model is that wages should enter as a ratio, implying equal coe¢ cients but with opposite sign, while employment rates enter separately. The model predicts that employment conditions in the destination will have a greater impact on the decision to migrate than employment conditions

12 in the sending country. A weakness of the Hatton model is that the in‡uence of friends and family is included in the objective function, but with a note that they may also assist with the cost of the passage. This muddying of the objective function and the budget constraint appears necessary, but is less than completely satisfactory as it does not allow us to separate between the various ways in which previous migrants in‡uence the migration decision.

The problem of modelling a migrant ‡ow comprising both assisted and unassisted migrants was central to Kelley (1965) and Pope (1981). Where Pope models the supply of and demand for labour separately, the approach taken here is to use a single equation to describe the migration. The advantage of Pope’s approach is that the supply of assisted passages is independent of the willingness of migrants to accept assistance, and the actual ‡ow is an equilibrium quantity. In taking this approach Pope had the advantage of a single, central government scheme, with national level data on public works expenditure. Given the multiplicity of schemes, with varying o¤ers, the emphasis here is on identifying the economic forces in New Zealand and the UK that drove the migration. To do this I model the ‡ow as a whole, and then the assisted and unassisted migrants separately. In comparing the forces underlying the ‡ows of assisted and unassisted migrants, attention is paid to di¤erences that may have in‡uenced the supply of assisted passages. The push-pull dichotomy may be dead with respect to the individual decision to migrate, but the decision to o¤er assistance was the result of conditions in New Zealand and independent of conditions in the UK.

Two further explanatory variables beyond those that follow from the Hatton model are included. Kelley (1965) and Pope (1981) consider the extent to which ‡uctuations in the migration from the UK to all other destinations explain changes in the migration to Australia. Kelley notes that with the exception of two periods when both countries were in severe recession, the periods when Australia received a relatively small share of migrants corresponded with periods of prosperity in the USA. If migrants to all destinations perform the same cost bene…t decision, and in the long run the decision is based on relative wages and a desire for family reuni…cation, then the extent to which alternative destinations were substitutes depends on why the wage ratio changed. If the ratio of US to UK wages changed as a result of a fall in US wages, then migrants indi¤erent between the US and other destinations on family grounds face two choices. They can either delay their move to the US, or they can migrate to an alternative destination. If they have a family preference for migrating to the US, then this will increase the likelihood that they wait for US wages to increase. If, on the other hand the change is caused by a fall in wages in the UK, then migration to all destinations will be increased.

Second, a dummy variable, Vogel, is included for the years 1874 and 1875. In these years the New Zealand government acted opportunistically in response to the Revolt in the Field. The government obtained the support of Joseph Arch and his union in supporting migration to New Zealand. The result was that more than 50,000 people migrated to New Zealand in 1874 and 1875. While these migrants are an important part of the history of the migration to New Zealand, their inclusion without a dummy variable would skew the results.

The analysis in three parts. First, I consider the time-series properties of the decade-average rate of migration. Following this I consider the time-series properties of the aggregate gross and net ‡ow of migrants. Finally, I consider the time-series properties of the annual ‡ow of assisted and unassisted migrants separately. This separation of the ‡ows of assisted and unassisted migrants allows some insight into the direct and indirect in‡uences of the stock of previous migrants. For those who received assisted passages the role of previous migrants was clear. For

13 those who were not assisted, it is likely that they did not receive any …nancial assistance from within the colony. While some of the schemes excluded people who could a¤ord to pay their own passage, in many instances migrants nominated by friends and family were given preference in the allocation of passages. Further, much of the family reuni…cation would have taken place through the schemes of assistance. Given that the unassisted migrants were mainly self …nancing and not migrating for the purposes of family reuni…cation, the in‡uence of previous migrants was through information and a general desire to migrate to a familiar social and cultural environment.

I model the time-series of the migration in two stages using the choice-based model of migration derived by Hatton (1995). In the …rst stage I consider the time-series of the average rate of migration over decade-long periods. In the second stage I consider the time-series of the annual ‡ows. In the second stage I consider both the aggregate ‡ow and the assisted and unassisted ‡ows separately.

For the long run analysis, the regression for decade averages takes the form:

WNZt Mt = 1 + 2 ln + 3SMt + 4Mt 1 + 5MUKtoRoW + 6Astt + : W UKt

Mt is the decadely average of the rate of migration per thousand of the UK population to New Zealand. The migration data are from the Statistics of New Zealand, and UK population data are from Mitchell (1980). The log of the wage ratio is ln WNZt . Wage data are from Williamson WUKt (1995) for the UK and Brooke (ref ) for New Zealand. The stock of previous migrants, SMt, is taken from the New Zealand census, beginning in 1858. Intercensus gaps are …lled by linear interpolation. The rate of migration to the rest of the world, MUKtoRoW , are from Ferenczi and Willcox (1969). Ast is a dummy variable, equal to one if assisted passages were available for the majority of the period and zero otherwise.

The period of the analysis is limited to 1858 to 1914. Reliable estimates of the birthplace of the population are not available before the …rst full census that was conducted in 1858. The data are divided into decadely periods to 1907, with a …nal seven-year period from 1908-1914. The last three variables, the lagged dependent variable, the rate of migration from the UK to the rest of the world, and the assistance dummy are included in turn. The results are presented in table 2 for both the gross and net rate of migration. Despite the small sample size, the results are generally good, and support the hypothesis that the migration was motivated by economic causes.

The coe¢ cients on the lagged dependent variable and the rate of migration from the UK to the rest of the world are not signi…cant for either gross or net migration. The coe¢ cient on the assistance dummy is signi…cant for both net and gross migration, and so the emphasis is on speci…cations (3) and (6). The coe¢ cients on the log of the wage ratio are positive signi…cant at the ten percent level. A ten percent increase in the wage ratio would result in a 0.906 increase in the rate of migration. Previous migrants impacted the migration rate both directly and through the use of schemes of assisted passages. The coe¢ cient on the stock of previous migrants is SM negative, signi…cant, and large. The average P was 0.00443, and so the average direct impact of previous migrants was to reduce the gross migration rate by 0.304. The coe¢ cient on

14 Table 2: Aggregate Long-Run Migration to New Zealand GrossMigrationRate NetMigrationRate (1) (2) (3) (4) (5) (6) Constant 0.299 -0.418 0.162 -0.238 -0.340 0.128 (0.86) (1.45) (3.03)* (0.65) (1.02) (2.11) ln (WNZ =WUK ) 3.96 3.093 0.906 3.752 3.070 1.20 (2.78) (4.86)* (3.18)** (2.52) (4.17)** (3.73)**

(Stock of MigrantsNZ =P )t -111.968 -123.543 -68.713 -130.410 -139.580 -89.519

15 (3.27)** (4.90)* (4.03)* (3.65)** (4.78)* (4.64)* Mt 1 -1.078 -0.859 (1.49) (1.14) MUK to R:o:W: 0.041 0.033 (2.24) (1.56) Assistance Dummy 0.141 0.127 (5.14)* (4.11)**

R2 0.915 0.949 0.987 0.920 0.941 0.986 Adjusted R2 0.788 0.872 0.969 0.801 0.852 0.965 t-ratios shown in parentheses. * Indicates signi…cance at the 5% level, ** at the 10% level. the assistance dummy is positive and signi…cant. The magnitude of the coe¢ cient suggests that the gross ‡ow of migrants was 0.142 greater during periods when assisted passages were o¤ered. Given the magnitude of the stock of previous migrants and the magnitude of the coe¢ cient, the net e¤ect of the previous migrants appears to be negative. The results for the gross and net migration are similar; the coe¢ cients have similar magnitudes, sign, and signi…cance. This result partly re‡ects the low rates of return migration from New Zealand. The negative impact of previous migrants notwithstanding, the …t is surprisingly good given the small sample size.

The essential features are that in making the short-run decision of where to go, and whether to delay going, are more sensitive to the probability of …nding employment than di¤erences in real wages. The log of relative wages enters appears in both the rate of change and the lagged value. There is no unemployment series for New Zealand in the nineteenth century. The deviation of the log of GDP from trend is used. Greasely and Oxley (2000) estimates of GDP are used; this limits the period of testing to 1865 to 1913. The unemployment data for the UK are from Feinstein (1972).

The short-run properties of the migration to New Zealand are investigated using the model derived in Hatton (1995). The main di¤erence between the long-run and short-run model is the inclusion of unemployment as an explanatory variable. In addition to this, the other variables enter as rates of change and lagged values rather than contemporaneous levels.

The model takes the form:

Mt WNZ WNZ SM M = 1 + 2 ln + 3 ln + 4 + 5 Pt 4 WUK t WUK t 1 P t P t 1 + 7 (GDP Deviation)NZt 1 + 8 ln ERUKt 1 + 9 ln ERUKt 1 4 4 +V ogel + :

The wage variables are as previously de…ned.

The variables are as previously de…ned for the relative wages, the stock of previous migrants, and the lagged dependent variable. There is no historical unemployment series for New Zealand, and so I follow Hatton and Williamson (1993) in using the deviations from the trend of the log of per capita GDP. The GDP series is from Greasely and Oxley (2000). The use of this series restricts the period of analysis to 1865-1913. The UK employment rate, ERUK , is derived from Feinstein (1972), and based on British Board of Trade data. This series has the advantage of being available from 1865. The regressions are repeated using Boyer and Hatton’s (2002) unemployment series for the period 1870-1914. V ogel is a dummy variable equal to one in 1874 and 1875 and zero otherwise.

The results are shown in table 3. Results are shown for both gross and net migration, with and without the variable for migration to the rest of the world. The results are generally supportive of the economic model of migration. The coe¢ cient on the lagged relative wage is positive and signi…cant, ranging between 0.412 and 0.614. This suggests that a ten percent increase in the wage ratio would lead to an increase in the migrant ‡ow of more than 0.04. The coe¢ cient on the deviation of GDP from trend is positive and signi…cant. The coe¢ cients range from 3.71 to

16 4.53. GDP per capita ten percent above trend would result in an increase in migration of 0.37 or greater. Finally, the coe¢ cient on the change in the British employment rate is negative and signi…cant. If the British employment rate rose ten percent, migration to New Zealand declined by more than 0.17. The only other signi…cant coe¢ cient was the migration to the rest of the world, positive and signi…cant at the ten percent level for gross migration. The only change that results from separating the lagged assisted and unassisted migrants is that the coe¢ cient on the lagged British employment rate becomes signi…cant at the ten percent level.

The Breusch Godfrey test is for autocorrelated errors, and is robust to the inclusion of the lagged dependent variable. The null hypothesis is that the errors are not autocellated. In all instances the null hypothesis cannot be rejected. The speci…cation test is the link test based on Tukey (1949). The dependent variable is regressed on the …tted values and the square of the …tted values. The results are for the signi…cance of the coe¢ cient on the square of the …tted values. In all cases the coe¢ cient on the square of the …tted values is not signi…cant.

The regressions are repeated for the assisted and unassisted migrant ‡ows separately. The results are shown in Table 3. The inclusion of the migration from the UK to the rest of the world dramatically improves the …t of the model for the unassisted migrants. Following this the emphasis is on speci…cations (2) and (4), the assisted and unassisted ‡ows including the migration from the UK to the rest of the world. Neither of the wage variables is signi…cant for the unassisted migrants. The coe¢ cients on the stock of previous migrants and lagged rate of unassisted migration are signi…cant. The coe¢ cient on the stock of previous migrants is 25.3, suggesting that a 10 percent increase in the stock of previous migrants would increase the rate of migration by 2.53. The coe¢ cient on the lagged rate of unassisted migration is 0.25; the e¤ect of any increase in unassisted migration would die out within a few years. The coe¢ cient on the change in the UK employment rate is signi…cant, with a negative sign. The coe¢ cient on the migration to the rest of the world is signi…cant and positive. This suggests that the unassisted migration to New Zealand was not a substitute for migration to other destinations. Rather, New Zealand received a small part of any increase in the migration from the UK. Overall the model is able to explain 63% of the variation in the time series of the unassisted migration to New Zealand.

The assisted migrants …t the model better than the unassisted. The coe¢ cient on the lagged relative wage is positive and signi…cant at the …ve percent level. The stock of previous migrants is not signi…cant, and the lagged rate of assisted migration is signi…cant at the ten percent level. The coe¢ cient on the deviation of per capita GDP from trend is signi…cantly positive, and the coe¢ cient is three times the coe¢ cient for the unassisted migrants. This suggests an important in‡uence of the labour market in New Zealand on the supply of assisted passages. The coe¢ cient is for the Vogel dummy is positive and signi…cant as expected. The model …ts the assisted migrants better than the unassisted, explaining more than 80% in the variation in the migrant ‡ows.

We expect that the behavior of the unassisted migrants will be similar to the behavior of migrants to other destinations. In order to test this we repeat the short-run regressions with the rate of ‡ow of unassisted migrants as the dependent variable. Three speci…cations are considered. In the …rst the variables are all as used previously. In particular the lagged rate of migration is the sum of the rates for assisted and unassisted migrants. For the second, the lagged rate of migration is split into two separate variables, the assisted and the unassisted. Finally, the second

17 Table 3: Short-run aggregate migration to New Zealand GrossMigration NetMigration (1) (2) (3) (4) (5) Constant 0.946 0.995 1.299 0.743 0.774 (1.09) (1.18) (1.44) (0.89) (0.94) ln (WNZ =WUK ) 0.040 0.028 0.050 0.059 0.050 4 (0.52) (0.38) (0.69) (0.80) (0.69) ln (WNZ =WUK )t 1 0.497 0.412 0.515 0.614 0.550 (1.99)** (1.69)** (2.16)* (2.57)* (2.3)*

(Stock of MigrantsNZ =P )t 41.878 44.323 48.828 43.678 45.016 (1.33) (1.45) (1.65) 1.44 (1.51)

(M=P )t 1 0.080 0.081 0.071 0.078 (0.80) (0.84) (0.75) (0.83)

(Unassisted M=P )t 1 -0.401 (1.10)

(Assisted M=P )t 1 0.173 (1.5)

(GDP Deviation)NZt 1 3.709 3.941 4.528 4.164 4.135 (2.95)* (3.23)* (3.82)* (3.42)* (3.59)* ERUK -1.835 -2.009 -1.861 -1.749 -1.874 4 (2.11)* (2.38)* (2.28)* (2.10)* (2.27)*

(ERUK )t 1 1.197 -1.343 -1.746 -1.074 -1.176 (1.35) (1.57) (1.87)** (1.27) (1.41) V ogel 0.770 0.773 0.707 0.767 0.765 (6.71)* (6.98)* (6.15)* (6.98)* (7.08)* MUK to R:o:W: 0.0163 0.021 0.012 (1.96)** (2.00)** (1.49) R2 0.773 0.793 0.803 0.796 0.807 Adjusted R2 0.726 0.744 0.750 0.754 0.761 BreushGodfreyp 0.328 0.818 0.847 0.523 0.881 Speci…cation test ( t-ratio) (0.29) p=0.776 (0.42) p=.716 (0.52) p=.606 (0.56) p=0.578 (0.59) p=0.560 t-ratios shown in parentheses. * Indicates signi…cance at the 5% level, ** at the 10% level.

18 Table 4: Short-run migration to New Zealand, 1866-1913 Unassisted Assisted (1) (2) (3) (4) Constant 0.478 0.894 0.403 0.648 (1.31) (2.86)* (0.55) (0.84) ln (WNZ =WUK ) -0.026 -0.034 0.065 0.060 4 (0.86) (1.37) (1.07) (0.99)

ln (WNZ =WUK )t 1 -0.020 -0.103 0.517 0.468 (0.21) (1.25) (2.62)* (2.31)* SM 21.172 25.293 20.401 22.827 P t (1.70)** (2.47)* (0.81) (0.91) (Unassisted M=P )t 1 0.590 0.248 -0.450 -0.651 (4.85)* (1.97)** (1.83) (2.1)*

(Assisted M=P )t 1 -0.065 0.002 0.133 0.172 (1.43) (0.06) (1.46) (1.76)**

(GDP Deviation)NZt 1 0.742 1.009 2.960 3.117 (1.5) (2.46)* (2.96)* (3.09)* ERUK -1.087 -1.183 -0.761 -0.817 4 (3.16)* (4.19)* (1.1) (1.18)

(ERUK )t 1 -0.545 -1.047 -0.588 -0.883 (1.48) (3.25)* (0.79) (1.12) V ogel 0.070 0.032 0.707 0.684 (1.49) (0.8) (7.42)* (7.02)* MUK to R:o:W: 0.016 0.009 (4.44)* (1.06) R2 0.562 0.714 0.843 0.874 Adjusted R2 0.458 0.637 0.805 0.806 BreushGodfreyp 0.364 0.266 0.762 0.894 Speci…cation test ( t-ratio) (1.35) p=.184 (0.93) p=.357 (0.84) p=.407 (0.94) p=.351 t-ratios shown in parentheses. * Indicates signi…cance at the 5% level, ** at the 10% level. speci…cation is repeated with the addition of the rate of migration from the United Kingdom to the rest of the world.

The results are shown in table 4. The speci…cation that separates the assisted from the unassisted performs better than the speci…cation that groups them.

The …rst approach taken, of modelling the migration as a whole, is based on the assumption that the assisted and unassisted migrants responded in the same way to the forces underlying the migration. Modelling the assisted and unassisted migrants ‡ows separately allows for the possibility that the two streams responded to the underlying forces in completely di¤erent ways. Some di¤erences are expected. As an equilibrium quantity, the number of assisted migrants depended on the demand for and supply of assistance. Even if the demand for assistance is motivated by the same underlying forces as the ‡ow of unassisted migrants, the supply was dependent almost entirely on conditions within New Zealand.

The results of the regressions with the ‡ows of assisted and unassisted migrants separate

19 are shown in table 4. Two speci…cations are tested, one with the migration from New Zealand to the world and without it. The emphasis is on the speci…cations that include migration to the rest of the world, shown in (2) and (4). The …rst observation is that the model is a better …t for the assisted than the unassisted migrants. For the assisted migrants, the lagged wage ration, GDP deviation from trend, and Vogel dummy are all signi…cant with the expected sign. The lagged rate of assisted migration is signi…cant, but the lagged unassisted migration and stock of previous migrants are not. In addition, neither of the employment variables for the UK is signi…cant. Overall, the model explains more than 80% of the variation in the ‡ow of assisted migrants. For the unassisted migrants, the relative wage variables are not signi…cant. The lagged unassisted migration and stock of previous migrants are signi…cant, with expected sign. The GDP deviation from trend in New Zealand is signi…cant, but the coe¢ cient is a third of the same coe¢ cient for the assisted migrants. Unlike the assisted migrants, the coe¢ cients on the change in the UK employment rate and the lagged UK employment rate are negative and signi…cant. Finally, the coe¢ cient on the migration from the UK to the rest of the world is signi…cant and positive. Overall the model does a less good job of explaining the unassisted migration, accounting for only slightly more than 60% in the variation in the ‡ow.

These results support the hypothesis that there were important di¤erences between the ‡ows of assisted and unassisted migrants. The assisted migration was more sensitive to employment conditions in New Zealand, while the unassisted migrants were more sensitive to employment conditions in the UK.

I repeat the regressions for the preferred speci…cation for gross, net, assisted, and unassisted migration using the Hatton and Boyer (2002) unemployment index for the UK The results are shown in Table 5. The use of the Hatton and Boyer index shortens the period of analysis to 42 years. For the gross and net migrant ‡ows the results are similar to those obtained previously. The lagged relative wage is signi…cant, although the coe¢ cient is much larger in both cases. The GDP deviation from trend is signi…cant with similar magnitude. Where the change in the UK employment rate was signi…cant previously, the lagged UK employment rate is now signi…cant. For the assisted migrants, in addition to the lagged wage ratio, the change in the wage ratio is also signi…cant. As with the gross and net ‡ows, the coe¢ cient on the lagged wage ratio is twice as large as previously. The lagged rate of assisted and unassisted migration are signi…cant with similar magnitudes and the same sign. The lagged employment rate in the UK is now signi…cant, with the expected sign. For the gross, net, and assisted ‡ows the explanatory power of the model improves.

The most important di¤erences are for the unassisted migrants. The coe¢ cients on the stock of previous migrants and GDP relative to trend are no longer signi…cant. The coe¢ cient on the lagged UK employment rate remains negative and signi…cant, with similar magnitude. The coe¢ cient on the migration to the rest of the world remains positive and signi…cant, with similar magnitude. Unlike the gross, net, and assisted ‡ows, the …t of the model becomes worse with the use of the Hatton and Boyer index. The sensitivity of the results to the loss of six years and a slightly di¤erent unemployment series raises doubts about the appropriateness of the model for these migrants.

These results suggest possible cohort di¤erences between the ‡ows of assisted and unassisted migrants. MORE......

20 Table 5: Short-run migration to New Zealand 1870-1913 Gross Net Unassisted Assisted Constant 2.232 2.019 1.095 1.473 (2.07)* (1.93)** (2.69)* (1.74)** ln (WNZ =WUK ) 0.120 0.135 -0.217 0.136 4 (1.23) (1.43) (0.60) (1.81)** ln (WNZ =WUK )t 1 1.135 1.250 0.040 0.981 (3.14)* (3.57)* (0.30) (3.45)*

(Stock of MigrantsNZ =P )t -7.400 -4.038 18.474 -10.211 (0.19) (0.1) (1.21) (0.32)

(M=P )t 1 0.108 0.100 (1.06) (1.01)

(Unassisted M=P )t 1 0.275 -0.817 (1.67) (2.38)*

(Assisted M=P )t 1 0.020 0.199 (0.43) (2.06)*

(GDP Deviation)NZt 1 3.405 3.862 0.743 2.589 (2.58)* (2.99)* (1.52) (2.54)* ERUK -0.250 -0.194 -0.166 0.526 4 (0.23) (0.18) (0.38) (0.58)

(ERUK )t 1 -2.634 -2.478 -1.294 -1.749 (2.36)* (2.28)* (3.04)* (1.97)** V ogel 0.719 0.715 0.025 0.641 (5.96)* (6.11)* (0.54) (6.61)* MUK to R:o:W: 0.008 0.004 0.014 0.005 (0.88) (0.48) (3.22)* (0.53) R2 0.811 0.828 0.649 0.879 Adjusted R2 0.758 0.779 0.535 0.840 BreushGodfreyp 0.936 0.976 0.400 0.880 Speci…cation test ( t-ratio) (0.86) p=.478 (1.04) p=.306 (0.85) p=.399 (1.48) p=.146 t-ratios shown in parentheses. * Indicates signi…cance at the 5% level, ** at the 10% level.

21 5 Discussion

The results of the econometric analysis suggest that the migration to New Zealand was much like the migration to other destinations. The migrants were motivated by higher wages and employment opportunities, and attracted by previous migrants from a similar national background. Although the institutional detail di¤ered, a large proportion of the migrants had part or all of the cost of their passage paid by earlier migrants. What the analysis does not adequately address is why the migrants chose New Zealand in preference to the USA.

The question of assistance from outside the family has received relatively light treatment in the literature. In his comprehensive review of the migration literature, Gould (1980b) addresses assistance in the third of the three papers, and devotes relatively few pages to the question of assistance.

Gould lists …ve countries as o¤ering assistance to migrants, Australia, Brazil, and New Zealand on a large scale, and Argentina and Canada on a smaller scale. The Brazilian assistance was for labour for the plantations, and the abuse of migrants led the German government to make it illegal for any German citizen to migrate with any debt or indenture to be paid on arrival (this hampered the New Zealand government’sattempts to attract German immigrants as the promissory notes made it illegal for Germans to accept the assistance). The assistance o¤ered by the Australian and New Zealand governments was of a fundamentally di¤erent character. The purpose of attracting migrants was not only to increase the labour supply, but also to contribute to the peopling of the country. What is striking is that the two destinations within the Empire furthest from the UK spontaneously adopted institutional arrangements that acted as substitute for the assistance that for most other destinations took place within families, groups of friends, and communities.

The assistance had two e¤ects. The …rst was to in‡uence the choice of destination for the …rst cohort of settlers. These migrants were o¤ered free passages for entire families, and were supported and encouraged throughout the process. For the later migrants the assistance expanded the set of available destinations, in many cases making New Zealand a cheaper destination to reach than North America.

The nineteenth century migration was a transitional migration. The need for assistance external to the family, so important to the earlier migrations, became increasingly less important. The earlier intercontinental migrations from Europe, and between other continents during the nineteenth century, were dominated by the way in which the passages were …nanced. Galenson (1984) estimates that between half and two thirds of all European migrants to the USA between the 1630s and the third quarter of the eighteenth century travelled under indenture. In addition to those signing voluntary indenture contracts were approximately 50,000 convicts with …xed term indenture contracts transported to the USA between 1718 and 1775. The transported convicts accounted for a quarter of all migrants from Britain to the USA during the period (Grubb 2000). Finally, the largest migration before the three that began in the nineteenth century, the slave trade, was based on the ultimate inducement to migrate, threats of violence and death.

Inducements to migrate are an important part of the history of the other two mass migrations that began in the nineteenth century. Indentured Indian labour was transported to all parts of the

22 British Empire, while labourers from Northern China were actively recruited to Southeast China and Siam. In fact McKeown (2004, p. 170,171) argues that while indenture and assistance were important, the pendulum has swung too far, and that the characterization of the Asian migrations as being dominated by indenture and largely for the bene…t of Europeans overstates the case (McKeown 2004). This emphasis on indenture and external forces, McKeown argues, creates the false impression that the Asian migrations were fundamentally di¤erent to the European migration, when in fact the migrants were similarly motivated, were supported and encouraged by similar institutions, and had their passages facilitated by similar mechanisms.

Rising wages in both Europe and the new world meant that potential migrants were increasing able to fund the cost of their passages from personal savings. The nineteenth century migration ended prematurely because of institutional resistance to continued immigration in high-wage new- world countries (Timmer and Williamson 1998). Laws restricting migration were unnecessary a century earlier as few could a¤ord the cost of intercontinental travel.

6 Conclusions

This paper has addressed the causes of the migration to New Zealand in two ways. The institutional detail of the assisted passages o¤ers insight into the way in which migrants were attracted away from the dominant North Atlantic system. The econometric analysis of the gains that the migrants could expect to make suggest that the migrants to New Zealand were motivated by the same concerns as migrants to other destinations. Relative wages were important, as were labour market conditions. While the model employed in this study is a good …t for the aggregate ‡ow and the assisted migrants, it is a poorer …t for the unassisted migrants. These results point to the possibility of cohort di¤erences between the assisted and unassisted migrants.

The modelling of the role of previous migrants remains a weak point in the study of the nineteenth century migration. Studies of their role in …nancing passages notwithstanding, previous migrants in‡uenced all aspects of the decision, both directly and indirectly. The use of the lagged dependent variable and the stock of previous migrants in regressions is defensible, but hardly provides insight into the relative importance of their in‡uence on the various components of the decision process.

Finally, this paper highlights the importance of the institutional framework within which the migration took place. While the institutional environment was most obviously important for New Zealand and Australia, there is considerable evidence of bodies external to the migrating family providing encouragement and support for migration. Migration is a strongly path dependent process, understanding why a migration started provides considerable information about the likely course that it will take.

23 Rate of Migration Rate of Migration 0 .5 1 1.5 1840 0 .5 1 1.5 1840 1860 1860 Unassisted 24 1880 Year 1880 Year Assisted 1900 1900 1920 1920 References

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