Modelling Regional Labour Market Adjustment in New Zealand

Wai Kin Choy, David Maré and Peter Mawson ()
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Peter Mawson: Reserve Bank of New Zealand (Wai Kin Choy)

No 02/01, Treasury Working Paper Series from New Zealand Treasury

Abstract: This 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.

Keywords: Regional labour market adjustment; Internal migration (search for similar items in EconPapers)
JEL-codes: J61 R23 (search for similar items in EconPapers)
Pages: 81 pages
Date: 2002-03
New Economics Papers: this item is included in nep-lab
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Citations: View citations in EconPapers (13)

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Persistent link: https://EconPapers.repec.org/RePEc:nzt:nztwps:02/01

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