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3122.0 - Demography Working Paper 2000/4 - Category Jumping: Trends, Demographic Impact and Measurement Issues, 2000  
Latest ISSUE Released at 11:30 AM (CANBERRA TIME) 27/11/2000   
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A REPORT PREPARED FOR THE DEPARTMENT OF IMMIGRATION AND MULTICULTURAL AFFAIRS AND THE AUSTRALIAN BUREAU OF STATISTICS

SIEW-EAN KHOO AND PETER MCDONALD
DEMOGRAPHY PROGRAM
THE AUSTRALIAN NATIONAL UNIVERSITY

ABSTRACT

The net overseas migration component used to estimate the resident population is based on net permanent and long-term (12 months or more) movements into and out of Australia. From July 1976 onwards, net overseas migration has included an adjustment for category jumping.

Because of current concerns with the volatility of category jumping estimates and its impact on net overseas migration and population estimates, this study was undertaken to:

  1. Examine the reasons for the recent volatility in estimates of category jumping and the discrepancies between preliminary and revised estimates;
  2. Examine which types of overseas arrivals and departures are included in estimates of category jumping and whether there is the possibility of under- or overcounting;
  3. Examine the feasibility and usefulness of calculating category jumping by visa category, purpose of travel and other relevant factors;
  4. Examine the impact of category humping estimates on net overseas migration, the population growth rate and population estimates, and assumptions underlying short-term and long-term population projections; and
  5. Examine the options for reducing category jumping, whether through improvements in the methodology or program planning, and evaluate the feasibility of these options.

The study also investigates the approaches used in other countries similar to Australia to estimate net overseas migration, to see whether they can provide alternative ways of addressing the issue of category jumping.

Category jumping is the term used to describe the net effect of changes in travel intention from short-term to permanent/long-term or vice versa. These changes occur when:
  1. an Australian resident departing on a short-term (less than 12 month) visit overseas does not return within 12 months;
  2. an Australian resident departing long-term (at least 12 months) or permanently returns after less than 12 months;
  3. an overseas visitor arriving with an intention to stay less than 12 months does not depart within 12 months; and
  4. an overseas visitor on arriving with an intention to stay at least 12 months or permanently departs after less than 12 months.

For about ten years after it was first applied, with the exception of the first year, category jumping was a relatively small adjustment made in the calculation of net overseas migration. However, it became a significant component of net overseas migration in the late 1980s and early 1990s. More significantly, it also showed extreme volatility, going from large and positive to large and negative and then becoming positive again. There has also been considerable volatility in the quarterly estimates of category jumping as well as significant differences between preliminary and revised estimates in some quarters.

The study makes the following recommendations:
  1. Since the main problem with category jumping is in estimating preliminary category jumping, especially the visitor component, in the absence of actual movement data for three out of the five quarters, it is recommended that an attempt be made to improve the methodology. This could be done by considering different types of visitors, and estimating preliminary category jumping separately for the following groups of temporary entrants: working holiday makers, students, temporary business entry (long stay), temporary business entry (short stay), all other visaed visitors and New Zealand citizens. The current approach to estimating preliminary category jumping is rather subjective and has resulted in significant overestimates of the visitor component in some quarters.
  2. At the same time, it is also recommended that the ratios used to allocate heaping at 12 months in intended duration of stay to short-term and long-term status should be revised to better reflect current movement patterns. Recent movement data suggest that the ratios be revised to 85:15 for visitors and 80:20 for residents.
  3. These changes will need to be tested for a period of at least 12 months (four quarters) to see to what extent they improve the preliminary estimates of category jumping.
  4. It is also recommended that ABS investigate possible improvements to the methodology by which category jumping is distributed across the States and Territories. One approach may be to allocate Australian residents and overseas visitors separately on the basis of permanent and long-term departures and arrivals respectively. A further refinement may be to allocate each major visitor group separately on the basis of permanent and long-term arrivals in that group.
  5. Considering the interests of States and Territories in the issues of category jumping and population estimates, it is recommended that ABS consult with State and Territory governments on implementing these recommendations. A suggested forum for such consultations is the Australia-New Zealand Population Workshop.
  6. If preliminary estimates of category jumping cannot be improved, it is recommended that no preliminary adjustments should be made for category jumping.The usefulness of having a preliminary estimate can be questioned when the estimate has to be substantially revised sometimes. This recommendation to eliminate preliminary estimates of category jumping is essentially a return to the situation before September 1989. It is still useful to adjust for category jumping when movement data are available for all five quarters.
  7. It is recommended that the term "category jumping" be replaced with a different and less confusing term. A suggested alternative is "change in intended duration".

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