productivity ”. see g. bascand ( 2012 ), “ planning for the future : structural change in new zealand ’ s population, labour force, and productivity ”, government statistician, statistics new zealand, paper presented at affording our future conference, wellington, nz, december 2012. bis central bankers ’ speeches shortages – albeit over a fifty year horizon. in contrast, labour supply has been growing very rapidly, with cyclical forces dominating the longer - term lower trend. participation the share of the population participating in the labour force, either by working or actively seeking work, has trended higher over the past 15 years, reaching around 69 percent in 2015. the main influences on this trend have been the ageing population, increased participation of older workers, and increased participation of women ( figure 3 ). figure 3 : contributions to change in labour force participation since 20019 as in many advanced economies, our population is ageing. because older cohorts, and particularly those past retirement age, have a lower participation rate than the rest of the working - age population, an increase in the proportion of older cohorts, all else equal, decreases the aggregate participation rate. we ’ ve also experienced a significant increase in the participation of older workers, due to improved health and changes to retirement policies that encourage people to remain in the workforce for longer. the participation rate of the over - 60s has increased from 14 percent in 2001, to 35 percent currently. this greater participation of older workers has exceeded the negative impact of the ageing population. over the past 15 years, the participation rate of females has trended upwards, as social and cultural factors are seeing more women enter the workforce across all age groups. by contrast, the participation rate of men has been broadly stable. participation can be cyclical because strong employment and wage growth encourage people to seek work, who otherwise would not choose to participate. similarly, during downturns when unemployment rises and people spend longer time out of work, some are the chart shows the percentage point change in the participation rate since the march 2001 quarter attributable to each of the factors. the contribution from demographic change is calculated by holding the average participation rate of each age cohort fixed, and varying the relative size of each cohort. the contribution from youth participation is calculated by multiplying the change in the participation rate of male 15 – 19 year olds by the share of both sexes in that age cohort in the working age population in 2001.

require goods and services, and their household spending puts upward pressure on inflation. with housing supply fixed in the near - term, higher demand for housing increases rents and house prices and eventually encourages residential investment. the boost to demand from migrant spending and increasing activity generates additional demand for labour. however, recent work at the reserve bank12 suggests that the current migrant inflow may be having a smaller impact on demand and inflation than in previous cycles, partly due to the higher share of young migrants ( figure 5 ). the study finds that younger migrants ( 17 to 29 ) have a smaller impact on inflation and real house prices than older migrants. this is probably because younger migrants arrive with fewer financial assets, spend less, and are less likely to purchase a house. migration also boosts labour supply. in this cycle, fewer families and more work visas are likely to have boosted migrant participation. while students usually have lower participation, the recent relaxation of rules allowing migrants on student visas to work up to 20 hours per week may have boosted participation. since migrants boost both supply and demand in the economy, the net effect on inflationary pressure can be ambiguous. our historical experience has been that migration increases inflationary pressures in product and housing markets. in the current cycle, however, the migration drivers have been very different and recent research13 suggests that these differences matter for labour market outcomes. in particular, when migration is caused by weakness in the australian economy ( or the rest of the world ), it increases labour supply at a time when our businesses are facing lower demand, and hence need less labour. this results in higher unemployment and lower inflationary pressure. vehbi, t, “ the macroeconomic impact of the age composition of migration ”, reserve bank of new zealand analytical note 2016 / 03. armstrong, j and mcdonald, c, “ why the drivers of migration matter for the labour market ”, reserve bank of new zealand analytical note 2016 / 02. bis central bankers ’ speeches much of the current surge in net immigration is explained by weakness in the australian labour market that has made new zealand a relatively more attractive place to live. fewer new zealanders are departing for australia, more are returning home, and foreign migrants who may have considered migrating to australia are coming to new zealand. the flow of net emigration to australia has reversed over the past 12 months, and is the largest net inflow for 25 years. 14 the differences in the composition and drivers of migration in the current cycle help explain why inflationary pressures have