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Regional Labour Market Spillovers

Cameron Haworth


This analytical note examines how unemployment in one region could spill over and influence unemployment in other regions.

The paper finds rising unemployment in Auckland and Waikato has the biggest impact on unemployment around New Zealand. In contrast, rising unemployment in the Upper South Island, Southland, and Taranaki generate few spillovers into other regions.

The modelling indicates that regions with the largest spillovers can be used to improve the accuracy of national unemployment forecasts.

This can help inform the Reserve Bank when it sets monetary policy to achieve its mandate in supporting employment in New Zealand.

Watch Cameron Haworth from the Reserve Bank's Economics team explain how unemployment in one region can effect joblessness in another region.