A Regional Labour Market Profile

As unacceptably high unemployment levels persist throughout the OECD so greater attention is being paid to differences in the way regional Labour markets adjust to growth and recession. Comparatively speaking New Zealand has lacked both the conceptual and empirical analyses necessary to build local and regional specific approaches into its active labour market policies - despite the persistence of regional disparities through the post war period. When regional differences are raised for public discussion in New Zealand it is the geographical variations in the unemployment rate that usually receives attention. What this paper shows is that unemployment is merely the surface phenomenon of a condition which is much more deeply embedded in the regional labour markets affected. This is illustrated by constructing a regional labour market profile which measures each of the 14 regions on four separate labour market indicators. When applied at the height of the New Zealand recession in 1991 the profile demonstrated how regions with high unemployment rates not only experience Low labour force participation rates but that when members of the labour force in such regions do find work they work fewer hours and even when fulltime employment is obtained the levels of remuneration are lower than those in the more buoyant regions. The result of these interconnected characteristics of regional labour markets is a series of indirect multipliers which serve to exaggerate and compound the effect of depressed labour demand on weaker markets