IDEAS home Printed from https://ideas.repec.org/a/eee/jcecon/v38y2010i4p432-448.html
   My bibliography  Save this article

The long-run impact of New Zealand's structural reform on local communities

Author

Listed:
  • Stillman, Steven
  • Velamuri, Malathi
  • Aitken, Andrew

Abstract

New Zealand underwent a period of comprehensive market-oriented economic reforms from 1984 to 1993. In this paper, we use data from the 1986, 1991, 1996 and 2001 New Zealand census to examine the long-run impact that these reforms had on local communities. We analyse the adjustment process in 140 local labour market areas by creating three measures of the impact of structural reform on local communities and examining the persistence of these shocks over time. We find that communities which experienced smaller employment shocks have higher employment rates and a more skilled workforce in the medium and long-term. Population shocks also have positive, sizeable and persistent effect on future population size. Overall, the initial impacts of the reforms undertaken in New Zealand on local communities appear to still endure more than a decade later.

Suggested Citation

  • Stillman, Steven & Velamuri, Malathi & Aitken, Andrew, 2010. "The long-run impact of New Zealand's structural reform on local communities," Journal of Comparative Economics, Elsevier, vol. 38(4), pages 432-448, December.
    • Handle: RePEc:eee:jcecon:v:38:y:2010:i:4:p:432-448
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0147-5967(10)00037-5
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Spilimbergo, Antonio & Kwon, Goohoon, 2005. "Russia's Regions: Income Volatility, Labour Mobility and Fiscal Policy," CEPR Discussion Papers 5265, C.E.P.R. Discussion Papers.
    2. Bover, Olympia & Muellbauer, John & Murphy, Anthony, 1989. "Housing, Wages and UK Labour Markets," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 51(2), pages 97-136, March.
    3. Lewis Evans & Arthur Grimes & Bryce Wilkinson, 1996. "Economic Reform in New Zealand 1984-95: The Pursuit of Efficiency," Journal of Economic Literature, American Economic Association, vol. 34(4), pages 1856-1902, December.
    4. Maloney, Tim, 2002. "Welfare Reform and Unemployment in New Zealand," Economica, London School of Economics and Political Science, vol. 69(274), pages 273-293, May.
    5. Gibson, John K & Harris, Richard I D, 1996. "Trade Liberalisation and Plant Exit in New Zealand Manufacturing," The Review of Economics and Statistics, MIT Press, vol. 78(3), pages 521-529, August.
    6. Arthur Grimes & David C. Maré & Melanie Morten, 2007. "Adjustment in Local Labour and Housing Markets," Working Papers 07_10, Motu Economic and Public Policy Research.
    7. Easton, Brian, 1994. "Economic and Other Ideas behind the New Zealand Reforms," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 10(3), pages 78-94, Autumn.
    8. Papps, Kerry L. & Newell, James O., 2002. "Identifying Functional Labour Market Areas in New Zealand: A Reconnaissance Study Using Travel-to-Work Data," IZA Discussion Papers 443, Institute of Labor Economics (IZA).
    9. Paul Dalziel, 2002. "New Zealand's Economic Reforms: An assessment," Review of Political Economy, Taylor & Francis Journals, vol. 14(1), pages 31-46.
    10. Olivier Jean Blanchard & Lawrence F. Katz, 1992. "Regional Evolutions," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 23(1), pages 1-76.
    11. Ralph Lattimore, 2003. "Long Run Trends in New Zealand Industry Assistance," Working Papers 03_11, Motu Economic and Public Policy Research.
    12. John McMillan, 1998. "Managing Economic Change: Lessons from New Zealand," The World Economy, Wiley Blackwell, vol. 21(6), pages 827-843, August.
    13. Maloney, Tim, 2000. "The impact of welfare reform on labour supply behaviour in New Zealand," Labour Economics, Elsevier, vol. 7(4), pages 427-448, July.
    14. Robert E. Hall, 1970. "Why Is the Unemployment Rate So High at Full Employment?," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 1(3), pages 369-410.
    15. Topel, Robert H, 1986. "Local Labor Markets," Journal of Political Economy, University of Chicago Press, vol. 94(3), pages 111-143, June.
    16. Lang, Kevin, 1998. "The Effect of Trade Liberalization on Wages and Employment: The Case of New Zealand," Journal of Labor Economics, University of Chicago Press, vol. 16(4), pages 792-814, October.
    17. Wai Kin Choy & David C Mare & Peter Mawson, 2002. "Modelling Regional Labour Market Adjustment in New Zealand," Treasury Working Paper Series 02/01, New Zealand Treasury.
    18. Robert A. Lawson & Edward Bierhanzl, 2004. "Labor Market Flexibility: An Index Approach to Cross-Country Comparisons," Journal of Labor Research, Transaction Publishers, vol. 25(1), pages 117-126, January.
    19. Johnes, Geraint & Hyclak, Thomas, 1994. "House Prices, Migration, and Regional Labor Markets," Journal of Housing Economics, Elsevier, vol. 3(4), pages 312-329, December.
    20. Grafton, R-Q & Hazleding, T & Buchardt, B, 1997. "The New Zealand Economic Revolution : Lessons for Canada?," Working Papers 9705e, University of Ottawa, Department of Economics.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Isabelle Sin & Steven Stillman, 2016. "Economic liberalisation and the mobility of minority groups: evidence from Māori in New Zealand," IZA Journal of Migration and Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 5(1), pages 1-18, December.
    2. Eugenio Levi & Isabelle Sin & Steven Stillman, 2021. "Understanding the Origins of Populist Political Parties and the Role of External Shocks," CESifo Working Paper Series 9036, CESifo.
    3. Michael Ryan, 2020. "An Anchor in Stormy Seas: Does Reforming Economic Institutions Reduce Uncertainty? Evidence from New Zealand," Working Papers in Economics 20/11, University of Waikato.
    4. Gani, Azmat & Scrimgeour, Frank, 2016. "New Zealand's trade with Asia and the role of good governance," International Review of Economics & Finance, Elsevier, vol. 42(C), pages 36-53.
    5. Nolan, Matt, 2018. "Did tax-transfer policy change New Zealand disposable income inequality between 1988 and 2013?," Working Paper Series 7661, Victoria University of Wellington, Chair in Public Finance.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Eugenio Levi & Isabelle Sin & Steven Stillman, 2021. "Understanding the Origins of Populist Political Parties and the Role of External Shocks," Working Papers 21_09, Motu Economic and Public Policy Research.
    2. Aida Caldera Sánchez & Alain de Serres & Naomitsu Yashiro, 2017. "Reforming in a Difficult Macroeconomic Context: A Review of Issues and Recent Literature," Journal of International Commerce, Economics and Policy (JICEP), World Scientific Publishing Co. Pte. Ltd., vol. 8(01), pages 1-41, February.
    3. David G. Blanchflower & Andrew J. Oswald, 2005. "The Wage Curve Reloaded," NBER Working Papers 11338, National Bureau of Economic Research, Inc.
    4. Werner, Daniel, 2013. "New insights into the development of regional unemployment disparities," IAB-Discussion Paper 201311, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    5. Chatterjee, Srikanta & Dalziel, Paul & Daunfeldt, Sven-Olov & Podder, Nripesh, 2008. "Income Inequality and Transformation of the Welfare State: A Comparative Study of the Reforms in New Zealand and Sweden," HUI Working Papers 20, HUI Research.
    6. Edward B. Montgomery, 1994. "Patterns in Regional Labor Market Adjustment: The United States versus Japan," NBER Chapters, in: Social Protection versus Economic Flexibility: Is There a Trade-Off?, pages 95-118, National Bureau of Economic Research, Inc.
    7. Raven E. Saks, 2005. "Job creation and housing construction: constraints on metropolitan area employment growth," Finance and Economics Discussion Series 2005-49, Board of Governors of the Federal Reserve System (U.S.).
    8. David G. Blanchflower & Andrew Oswald, 1995. "International Wage Curves," NBER Chapters, in: Differences and Changes in Wage Structures, pages 145-174, National Bureau of Economic Research, Inc.
    9. Galiani, Sebastian & Lamarche, Carlos & Porto, Alberto & Sosa-Escudero, Walter, 2005. "Persistence and regional disparities in unemployment (Argentina 1980-1997)," Regional Science and Urban Economics, Elsevier, vol. 35(4), pages 375-394, July.
    10. McCormick, Barry, 1997. "Regional unemployment and labour mobility in the UK," European Economic Review, Elsevier, vol. 41(3-5), pages 581-589, April.
    11. Kondo, Illenin O., 2018. "Trade-induced displacements and local labor market adjustments in the U.S," Journal of International Economics, Elsevier, vol. 114(C), pages 180-202.
    12. Ritashree Chakrabarti & Junfu Zhang, 2015. "Unaffordable housing and local employment growth: Evidence from California municipalities," Urban Studies, Urban Studies Journal Limited, vol. 52(6), pages 1134-1151, May.
    13. Wouter Vermeulen & J. van Ommeren, 2006. "Compensation of regional unemployment in housing markets," CPB Discussion Paper 57, CPB Netherlands Bureau for Economic Policy Analysis.
    14. Jacques Poot & Bill Cochrane & Sandra Baxendine, 2005. "Description and Spatial Analysis of Employment Change in New Zealand Regions 1986-2001," Population Studies Centre Discussion Papers dp-57, University of Waikato, Te Ngira Institute for Population Research.
    15. Andrew Figura, 2003. "The effect of restructuring on unemployment," Finance and Economics Discussion Series 2003-56, Board of Governors of the Federal Reserve System (U.S.).
    16. Bound, John & Holzer, Harry J, 2000. "Demand Shifts, Population Adjustments, and Labor Market Outcomes during the 1980s," Journal of Labor Economics, University of Chicago Press, vol. 18(1), pages 20-54, January.
    17. Mark Hooker & Michael Knetter, 1994. "Unemployment Effects of Military Spending: Evidence from a Panel of States," NBER Working Papers 4889, National Bureau of Economic Research, Inc.
    18. Inmaculada Garcia-Mainar & Victor Montuenga-Gomez, 2003. "The Spanish Wage Curve: 1994-1996," Regional Studies, Taylor & Francis Journals, vol. 37(9), pages 929-945.
    19. Boustan, Leah Platt & Kahn, Matthew E. & Rhode, Paul W. & Yanguas, Maria Lucia, 2020. "The effect of natural disasters on economic activity in US counties: A century of data," Journal of Urban Economics, Elsevier, vol. 118(C).
    20. Pantuosco, Lou & Parker, Darrell, 1998. "Sources of Prevailing Differences in Unemployment Rates For Selected Regional Pairs," The Review of Regional Studies, Southern Regional Science Association, vol. 28(2), pages 35-46, Fall.

    More about this item

    Keywords

    Structural reform New Zealand Communities Local labour markets;

    JEL classification:

    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jcecon:v:38:y:2010:i:4:p:432-448. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/622864 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.