Modelling Regional Labour Market Adjustment in New Zealand
AbstractThis paper adopts a vector autoregressive (VAR) approach to analyse the labour market adjustment mechanisms for 12 New Zealand regions over the period 1985 to 2001. It examines the effects of a region-specific shock to employment on itself, the unemployment rate, the participation rate, and the wage rate. The role of migration as a channel of regional labour market adjustment is also inferred. We find that adjustment occurs predominantly through inter-regional migration although the unemployment and participation rates also play a role. Wages, on the other hand, account for very little adjustment. The importance of inter-regional migration in New Zealand matches the results found in Sweden, but stands in contrast to the picture in many European countries. Migration appears to be a more dominant adjustment channel compared to the US and Australian cases. However, this has to be placed into context – New Zealand regions are much smaller in terms of population size.
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Bibliographic InfoPaper provided by New Zealand Treasury in its series Treasury Working Paper Series with number 02/01.
Length: 81 pages
Date of creation: Mar 2002
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Regional labour market adjustment; Internal migration;
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, and Vacancies - - - Geographic Labor Mobility; Immigrant Workers
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