Adjustment in Local Labour and Housing Markets
AbstractThis paper analyses local labour and hosuing market adjustment in New Zealand from 1989 to 2006. We use a VAR approach to examine the adjustment of employment, employment rate, participation rate, wages, and house prices in response to employment shocks. Migration is a major adjustment response at both a national and regional level. Nationally, a 1% positive employment shock leads to a long-run level of employment 1.3% higher, with half of the extra jobs filled by migrants. A 1% region-specific employment shock raises the long-run regional share of employment by 0.5 percentage points, due entirely to in-migration. House price responses differ at different spatial scales. Nationally, house prices are very responsive to employment shocks: a 1% employment shock raising long run house prices by 6% , as may be expected with an upward sloping housing supply curve. Paradoxically, this relationship does not hold at the regional level.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Motu Economic and Public Policy Research in its series Working Papers with number 07_10.
Length: 48 pages
Date of creation: Aug 2007
Date of revision:
Regional Labour Market Adjustment; Internal Migration; House Prices; Vector Autoregression;
Find related papers by JEL classification:
- R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
- J61 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Geographic Labor Mobility; Immigrant Workers
- C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-08-18 (All new papers)
- NEP-GEO-2007-08-18 (Economic Geography)
- NEP-MIG-2007-08-18 (Economics of Human Migration)
- NEP-URE-2007-08-18 (Urban & Real Estate Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- 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.
- Benkwitz, Alexander & Lütkepohl, Helmut & Wolters, Jürgen, 1999.
"Comparison of Bootstrap Confidence Intervals for Impulse Responses of German Monetary Systems,"
CEPR Discussion Papers
2208, C.E.P.R. Discussion Papers.
- Benkwitz, Alexander & L tkepohl, Helmut & Wolters, J rgen, 2001. "Comparison Of Bootstrap Confidence Intervals For Impulse Responses Of German Monetary Systems," Macroeconomic Dynamics, Cambridge University Press, vol. 5(01), pages 81-100, February.
- Benkwitz, Alexander & Lütkepohl, Helmut & Wolters, Jürgen, 1999. "Comparison of bootstrap confidence intervals for impulse responses of German monetary systems," SFB 373 Discussion Papers 1999,29, Humboldt University of Berlin, Interdisciplinary Research Project 373: Quantification and Simulation of Economic Processes.
- Fredriksson, P., 1995.
"The Dynamics of Regional Labour Markets and Active Labour Market Policy: Swedish Evidence,"
1995-20, Uppsala - Working Paper Series.
- Fredriksson, Peter, 1999. "The Dynamics of Regional Labor Markets and Active Labor Market Policy: Swedish Evidence," Oxford Economic Papers, Oxford University Press, vol. 51(4), pages 623-48, October.
- Mark J. Holmes & Arthur Grimes, 2005. "Is there long-run convergence of regional house prices in the UK?," Working Papers 05_11, Motu Economic and Public Policy Research.
- Love, Inessa & Zicchino, Lea, 2002. "Financial development and dynamic investment behavior : evidence from panel vector autoregression," Policy Research Working Paper Series 2913, The World Bank.
- Paolo Mauro & Antonio Spilimbergo, 1998.
"How Do the Skilled and the Unskilled Respond to Regional Shocks? the Case of Spain,"
IMF Working Papers
98/77, International Monetary Fund.
- Paolo Mauro & Antonio Spilimbergo, 1999. "How Do the Skilled and the Unskilled Respond to Regional Shocks?: The Case of Spain," IMF Staff Papers, Palgrave Macmillan, vol. 46(1), pages 1.
- repec:cup:macdyn:v:5:y:2001:i:1:p:81-100 is not listed on IDEAS
- Decressin, Jorg & Fatas, Antonio, 1995.
"Regional labor market dynamics in Europe,"
European Economic Review,
Elsevier, vol. 39(9), pages 1627-1655, December.
- David C. Maré & Jason Timmins, 2003.
"Moving to Jobs?,"
03_07, Motu Economic and Public Policy Research.
- Arthur Grimes & Andrew Aitken, 2004.
"What's the Beef with House Prices? Economic Shocks and Local Housing Markets,"
04_08, Motu Economic and Public Policy Research.
- Arthur Grimes & Andrew Aitken, 2005. "What’s the Beef with House Prices? Economic Shocks and Local Housing Markets," Urban/Regional 0509011, EconWPA.
- Arthur Grimes & David C. Maré & Melanie Morten, 2006. "Defining Areas: Linking Geographic Data in New Zealand," Working Papers 06_07, Motu Economic and Public Policy Research.
- Rob Hodgson & Jacques Poot, 2011. "New Zealand Research on the Economic Impacts of Immigration 2005-2010: Synthesis and Research Agenda," CReAM Discussion Paper Series 1104, Centre for Research and Analysis of Migration (CReAM), Department of Economics, University College London.
- Steven Stillman & Malathi Velamuri, 2008.
"The Long-Run Impact of New Zealand's Structural Reform on Local Communities,"
08_11, Motu Economic and Public Policy Research.
- 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.
- Steven Stillman & David C. Maré, 2008. "Housing Markets and Migration: Evidence from New Zealand," Working Papers 08_06, Motu Economic and Public Policy Research.
- Julie Fry, 2014. "Migration and Macroeconomic Performance in New Zealand: Theory and Evidence," Treasury Working Paper Series 14/10, New Zealand Treasury.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Tui Head).
If references are entirely missing, you can add them using this form.