David C. Maré

Jason Timmins

English

Research Papers in Economics

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
MOVING TO JOBS? 
 
Dave Maré and Jason Timmins 
Motu Economic and Public Policy Research Trust 
Motu Working Paper
1 # 2003-07
2
 
June 2003 
 
 
Dave Maré (dave.mare@motu.org.nz) is Motu’s Senior Research Fellow; Jason Timmins 
(jason.timmins@motu.org.nz) is one of Motu’s research analysts.
                                                 
1 © 2003 Motu Economic and Public Policy Research Trust.  All rights reserved.  No portion of this paper may 
be reproduced without permission of the authors.  Motu working papers are research materials circulated by 
their authors for purposes of information and discussion.  They have not necessarily undergone formal peer 
review or editorial treatment.  ISSN 1176-2667. 
2 A revised version of this paper, titled “Moving to Jobs” has been submitted to the Editor of Public Sector 
Journal for publication. 
1 1 INTRODUCTION 
Migration is one of the ways that individuals can improve their chances of getting a 
job; it allows them to move to regions with better employment prospects.  However, 
migration flows may also work against policies that aim to improve the employment 
prospects for people in low-growth regions.  If the benefits of regional development policy 
accrue primarily to people who move into an area to take advantage of the assistance offered, 
the policy may fail to raise the living standards of the initial residents.  In recent years, there 
has been a resurgence in interest in regional issues in New Zealand with the re-establishment 
of a Ministerial post with responsibility for Industry and Regional Development.  The broad 
aim of the regional development programme is “to facilitate and promote sustainable regional 
development to help regions respond to local opportunities”.
3
This paper examines whether New Zealand residents move from low-growth to high-
growth regions, using New Zealand census data from the past three inter-censal periods 
(covering 1986-2001).  If higher employment growth were the only factor affecting the 
relative attractiveness of regions, we would expect such a pattern.  In practice, relative 
attractiveness depends also on other differences across regions, and on the characteristics of 
individuals living in different regions.  Furthermore, the impact of labour demand may be 
offset by other responses in labour or housing markets (higher growth in housing costs). 
We focus on the relationship between employment growth and migration flows to 
gauge the strength of the relationship and the stability of the relationship over the business 
cycle.  We find that people move to areas of high employment growth, but that the probability 
of leaving a region is less strongly related to that region's fortunes.  We also find that 
migration flows to the metropolitan regions of Auckland, Canterbury and Wellington include 
a higher proportion of international immigrants compared with the rest of New Zealand. 
                                                 
3 Cabinet paper “Implementing the Regional Development Programme”, available as 
http://www.med.govt.nz/irdev/asst_prog/impregdev03.html. 
2 2  PATTERNS OF REGIONAL MIGRATION AND REGIONAL 
EMPLOYMENT GROWTH 
We first describe the patterns of New Zealand's migration flows and regional 
employment growth patterns over the three inter-censal periods 1986-1991, 1991-1996 and 
1996-2001.  Employment information from the New Zealand Census of Population and 
Dwellings was used to calculate five- year (inter-censal) changes in employment numbers for 
each region.  Employment here is defined as the number of part-time and full-time workers 
aged 15 to 64.  Table 1 shows that between 1986 and 1991 New Zealand experienced a 6.8% 
reduction in the number of people employed.  This was followed by a strong recovery 
between 1991 and 1996 with employment numbers growing nationally by 15.8%.   
Employment growth continued, albeit at a much lower rate of 5.4% between 1996 and the 
2001 census.  However, the fortunes of regions were mixed with some regions experiencing a 
decline in employment numbers.
4
Table 1  New Zealand employment growth and migration rates 
Year  Employment growth  Inter-regional migration rate  International inflow rate* 
1986-1991 -6.8%  9.7%  4.9% 
1991-1996 15.8%  8.3%  6.6% 
1996-2001 5.4%  8.3%  6.9% 
Source: 1991, 1996 and 2001 Census of Population and Dwellings, Statistics New Zealand 
* The New Zealand Census records international inflows, but not international outflows. 
The mobility data has been drawn from the 1991, 1996 and 2001 New Zealand 
Censuses of Population and Dwellings.  Each census asked for current and previous census 
(five years ago) addresses.  From these two questions we identify a change of address, and 
therefore a move.  These data provide a comprehensive picture of movements of people 
within New Zealand, and of people who have arrived between two censuses, but do not allow 
us to distinguish between deaths and external emigration. 
                                                 
4 For a detailed description of labour market indicators over the period of 1986-2000, including regional 
breakdowns, see Choy et. al. (2002). 
 
3Table 1 shows mean migration rates for the three census periods.  Migration rates are 
calculated by dividing the number of migrants by the population in the initial period.  For 
example, 9.7% of people living in New Zealand in 1986 had moved to a different region by 
the 1991 census.  Inter-regional migration rates were at their highest during 1986-1991.  The 
two subsequent periods saw a reduction in the proportion of New Zealanders moving between 
regions, but there was little change between the two periods 1991-1996 and 1996-2001.  The 
proportion of international immigrants increased over the three census periods. 
3  LINKS BETWEEN MIGRATION AND REGIONAL EMPLOYMENT 
GROWTH 
For a region’s employment to grow it requires a supply of available workers.  Workers 
can be supplied from within the region through increased labour force participation (from the 
unemployed and those not in the labour force), or from surrounding regions (as well as from 
overseas) through migration. 
When the demand for labour in a region rises we would expect some of this to be met 
by supply of workers from other regions within New Zealand.  When demand for labour 
decreases within a region we would expect workers to move out of the region with the aim of 
improving their job prospects elsewhere. 
Figure 1 shows the relationship between total (internal and international) inflow rates, 
on the vertical axis, and regional employment growth on the horizontal axis.  The straight line 
represents a population weighted fitted relationship between the two variables.  Between 1986 
and 1991, despite high inter-regional mobility rates New Zealanders were not necessarily 
moving to regions with better employment prospects.  No significant relationship was found 
between inflows and regional employment growth (Figure 1a). 
 
4Figure 1  Immigration rate (internal and international) and regional 
employment growth 
(a) 1986-1991  (b) 1991-1996 
I
n
f
l
o
w
 
R
a
t
e
 
(
%
)
Employment Growth Rate (%)
 Fitted Relationship
-20 -15 -10 -5 0
5
10
15
20
Northland
Auckland
Waikato
Bay of Plenty
Gisborne
Hawke's Bay
Taranaki
Manawatu-Wanganui
Wellington
Nelson-Marlborough
West Coast
Canterbury
Otago
Southland
I
n
f
l
o
w
 
R
a
t
e
 
(
%
)
Employment Growth Rate (%)
 Fitted Relationship
5 10 15 20 25
5
10
15
20
Northland
Auckland
Waikato
Bay of Plenty
Gisborne Hawke's Bay
Taranaki
Manawatu-Wanganui
Wellington
Nelson-Marlborough
West Coast
Canterbury
Otago
Southland
 
  (c) 1996-2001 
 
I
n
f
l
o
w
 
R
a
t
e
 
(
%
)
Employment Growth Rate (%)
 Fitted Relationship
-5 0 5 10 15
5
10
15
20
Northland
Auckland
Waikato
Bay of Plenty
Gisborne
Hawke's Bay
Taranaki
Manawatu-Wanganui
Wellington
Nelson-Marlborough
West Coast Canterbury
Otago
Southland
 
Source: 1991,1996 and 2001 Census of Population and Dwellings, Statistics New Zealand 
Between 1986 and 1991, New Zealand’s economy was in recession.  Falling 
employment levels across most regions meant that the net growth in jobs was small.  Mobility 
tends to be pro-cyclical, with people more likely to move during periods of growth.  The high 
rate of mobility between 1986 and 1991 is therefore somewhat surprising.  It should be 
remembered, however, that migration decisions reflect peoples' views about the long-term 
relative attractiveness of different locations.  The significant changes in the New Zealand 
economy during the period would have changed the relative attractiveness of different 
locations.  The weakness of the relationship between labour market conditions and migration 
flows may indicate that the link between observed (current) and future labour market 
conditions was weaker during this period.  The widespread nature of poor employment 
opportunities across New Zealand’s regions might also have encouraged workers to travel 
overseas in search of work. 
 
5From 1991 onward New Zealand’s regions experienced positive employment growth.  
Total inflow rates between 1991 and 1996 had a positive and significant relationship with 
regional employment growth (Figure 1b).  This relationship remained positive and significant 
during 1996 and 2001 (Figure 1c) despite a slowing in employment growth from 15.8% to 
5.4%. 
These results suggest that higher employment growth rates within New Zealand 
regions are linked to larger migrant inflows.  For the metropolitan regions of Auckland, 
Canterbury and Wellington a high proportion of immigrants arrive from outside of New 
Zealand.  For example, between 1996 and 2001 70% of Auckland’s immigrants arrived from 
outside of New Zealand.  For the non-metropolitan regions in-migration is predominantly 
from within New Zealand. 
The above finding suggests that migrants are attracted to regions with better 
employment opportunities, but only when at least some regions have growing employment 
opportunities.  In contrast when we examine regional outflows we find that a migrant’s 
decision to leave a region is not closely related to poor or declining employment prospects.  
No significant negative relationship was found between employment growth rates and 
outflows over the three study periods. 
Unlike inflows we cannot test the impact of international emigration on this 
relationship.  Excluding international flows is a potential weakness in the analysis if flows 
across New Zealand’s border are a significant means for New Zealanders to improve their 
employment prospects.  The open border between Australia and New Zealand makes Trans-
Tasman migration a feasible option for people seeking better labour market prospects in the 
neighbouring country.
5
4  SUMMARY AND FUTURE WORK 
In this paper we have used data from the 1991, 1996 and 2001 censuses to examine 
the relationship between regional employment growth and the supply of workers through 
inter-regional inflows within New Zealand. 
 
6We found evidence to suggest that people choose destinations where employment 
growth is stronger and that mobility is more labour-market related during periods of growth.  
The decision to move out of an area is not strongly linked to relative employment growth.  A 
substitution effect seems to occur between internal in-migration and international in-
migration (including returning New Zealand citizens).  This was most evident within the 
metropolitan (Auckland, Canterbury and Wellington) regions and in particular Auckland, 
where international in-migration out-weighs internal in-migration. 
The work reported here clearly shows that internal migration flows are related to 
relative local labour market conditions.  This is consistent with the Choy et al (2002) finding 
that most of the adjustment to a local labour demand shock occurs through migration, and 
relatively quickly.  It is worth noting, however, that this link between migration and local 
conditions does not mean that regional differences in labour market outcomes are eliminated.  
There is a good deal of persistence in relative labour market outcomes (Maré & Timmins 
(2000); Choy et al (2002)).  It would appear that migration provides a means of smoothing 
short-term fluctuations in local demand, but not in removing longer-term differences in 
relative labour market outcomes. 
One question that inevitably arises in any examination of changes in New Zealand 
over the 1980s and 1990s is about the role of policy change.  We interpret the changes in 
internal migration patterns over time as related to the overall level of activity, and the 
dispersion of the relative attractiveness of different locations.  While policy changes over the 
period have undoubtedly had an influence on the general level and dispersion of activity, our 
study is unable to link the migration changes to any particular policy or set of policies.  Some 
policy changes have had an identifiably uneven spatial impact.  For instance, Gibson (1993) 
examines the regional impact of industry assistance policies.  Future work could examine the 
strength of such uneven spatial impacts of policies in explaining migration patterns. 
The current paper has abstracted from housing market developments, which also affect 
the relative attractiveness of different areas and the ease of moving.  Incorporating these 
 
5 The national border does, however, still appear to be an impediment to movement - see Poot (1995). 
 
7effects, and examining in more detail the role of international emigration, remain as priorities 
for future work. 
5 REFERENCES 
Choy, W. K., Maré, D. and Mawson P. (2002), “Modelling Regional Labour Market Adjustment in 
New Zealand”, Working Paper 02/01, New Zealand Treasury. 
Gibson, J. (1993): "Regional Consequences of New Zealand Industry Assistance Policies", New 
Zealand Journal of Geography, vol. 95, no. 1, pp. 2-6. 
Glass H. and Choy, W. K. (2001), “Brain Drain or Brain Exchange?” Working Paper 01/22, New 
Zealand Treasury. 
Kerr, S., Maré D., Power, W. and Timmins, J. (2001), "Internal Mobility in New Zealand", Working 
Paper 01/04, New Zealand Treasury. 
Maré, D. and Timmins J. (2000), "Internal Migration and Regional Adjustment: Some Preliminary 
Issues", Proc. 9
th Labour Employment and Work in New Zealand Conference, pp. 73-86. 
Poot, J. (1995), “Do Borders Matter? A Model of Interregional Migration in Australasia”, 
Australasian Journal of Regional Studies, vol. 1, no. 2, pp. 159-82. 
Poot, J. (1986), “A System Approach to Modelling the Inter-Urban Exchange of Workers in New 
Zealand”, Scottish Journal of Political Economy, vol. 33, no. 3, pp. 249–274. 
 
8

A System Approach to Modelling the Inter-Urban Exchange of Workers in New Zealand”,

Brain Drain or Brain Exchange?” Working Paper 01/22, New Zealand Treasury.

Do Borders Matter? A Model of Interregional Migration in Australasia”,

Internal Migration and Regional Adjustment: Some Preliminary Issues&quot;,

Internal Mobility in New Zealand&quot;, Working Paper 01/04, New Zealand Treasury.

Modelling Regional Labour Market Adjustment in New Zealand”, Working Paper 02/01, New Zealand Treasury.

Regional Consequences of New Zealand Industry Assistance Policies&quot;,

Moving to Jobs?

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Moving to Jobs?

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