Backpackers v. Seasonal Workers: Learning from the Contrasting Temporary Migration Outcomes in Australian and New Zealand Horticulture

“Crowding out” is a widely accepted claim in migration analysis, evolving from the literature assessing post-Second World War guest-worker labour which helped fuel the economic boom in Europe and other Western countries. Given the costs of regulation, the preference of profit-maximising employers for irregular and minimally-regulated migrants over regulated alternatives will, it is argued, undermine if not condemn to failure well-regulated temporary migration schemes. To test the crowding-out hypothesis, the horticultural labour markets in Australia and New Zealand are examined. The experience of regulated seasonal migrant programs in Australia and New Zealand has been divergent. Even though the two programs are very similar in design, the New Zealand variant has been much more popular than its Australian counterpart. The evidence suggests that the relative attractiveness of regulated and unregulated migrant labour sources depends on a range of factors, including the export orientation of the sector, the costs of collective action and regulation, differences in policy design and implementation, and external factors. Depending on industry and economy-wide characteristics, quality and reputational benefits for employers can offset the cost of regulation.