An econometric model for forecasting migration to Norway

Helge Brunborg, Statistics Norway
Ådne Cappelen, Statistics Norway

Immigration to Norway has increased rapidly in recent years, particularly from Poland and other EU countries. The high immigration level is to a large extent caused by rapid economic development in Norway in recent years, with low unemployment, high demand for labour and a high income level. In order to improve the population forecasts for Norway we have estimated an econometric model where net immigration to Norway from the EEA is a function of unemployment level in Norway and the income level in Norway relative to the average of OECD countries, adjusted for purchasing power differences. The estimation yielded stable parameters and these were consequently used to forecast immigration to Norway, based on economic forecasts of unemployment and level and relative income. The model implies that net immigration will continue to grow in the short run, followed by a rapid fall as a consequence of declining relative income of Norway.