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The Long-Run Impact of New Zealand's Structural Reform on Local Communities

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  • Steven Stillman

    () (Motu Economic and Public Policy Research)

  • Malathi Velamuri

    () (Victoria University of Wellington)

Abstract

New Zealand underwent a period of comprehensive market-oriented economic reforms from 1984-93. In this paper, we use data from the 1986, 1991, 1996 and 2001 Censuses to examine the long-run impact that these reforms had on local communities. We analyse the adjustment process in 140 local labour market areas (LMAs) by creating three measures of the impact of structural reform on local communities - an employment-based measure, a population measure and a housing price measure - and examine the persistence of these shocks over time. We find that communities which experienced smaller employment shocks have higher employment rates, higher average incomes and a more skilled workforce in the medium and long-term. Population shocks also have positive, sizeable and persistent effect on average incomes and population in the future. Overall, the initial impacts of the reforms undertaken in New Zealand on local communities appear to still endure more than a decade later.

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Bibliographic Info

Paper provided by Motu Economic and Public Policy Research in its series Working Papers with number 08_11.

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Length: 40 pages
Date of creation: Jun 2008
Date of revision:
Handle: RePEc:mtu:wpaper:08_11

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Keywords: Structural Reform; New Zealand; Communities; Local Labour Markets;

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  1. Easton, Brian, 1994. "Economic and Other Ideas behind the New Zealand Reforms," Oxford Review of Economic Policy, Oxford University Press, vol. 10(3), pages 78-94, Autumn.
  2. 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.
  3. 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.
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  11. 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.
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  13. 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.
  14. John McMillan, 1998. "Managing Economic Change: Lessons from New Zealand," The World Economy, Wiley Blackwell, vol. 21(6), pages 827-843, 08.
  15. Gibson,J.K. & Harris,R.I.D., 1996. "Trade Liberalisation and Plant Exit in New Zealand Manufacturing," Papers 66, Portsmouth University - Department of Economics.
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  17. Topel, Robert H, 1986. "Local Labor Markets," Journal of Political Economy, University of Chicago Press, vol. 94(3), pages S111-43, June.
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