Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/205476
Authors: 
Choy, Wai Kin
Mare, David C
Mawson, Peter
Year of Publication: 
2002
Series/Report no.: 
New Zealand Treasury Working Paper 02/01
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.
Subjects: 
Regional labour market adjustment
Internal migration
JEL: 
R23
J61
Creative Commons License: 
https://creativecommons.org/licenses/by/4.0/
Document Type: 
Working Paper

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