Forecasting migration in official population projections using an econometric model - Methodology and experience from Norway

Although substantial research has been made in identifying and quantifying determinants of international migration, most official population projections do not include these determinants in an explicit migration model. In Norway, gross immigration is currently 1.5 percent of total population, and immigration is the main driver of population change. Statistics Norway is projecting immigration to Norway using an econometric model based on standard migration theories. The main variables included are income level, unemployment and population size in Norway and the sending countries, previous immigration from the sending countries to Norway, and dummies for policy changes or special events. Data from 1970-2011 are used to estimate the effect of the different variables for three country groups: Western countries, Eastern EU-countries and the rest of the world. Projections of exogenous variables are partly drawn from international sources and partly from national Norwegian forecasts. For the income variables, three different paths are specified leading to three different forecasts for immigration until 2100. These forecasts suggest high immigration at least for another decade. However, the alternatives indicate high uncertainty. Even if we condition on a specific path of explanatory variables, prediction intervals are wide.