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Matching workers with jobs - how well is the New Zealand labour market doing?

Rebecca Williams, David Gillmore, Nicolas Groshenny

Since the trough of the 2008/09 recession, the unemployment rate has remained high. However, some other indicators suggest that there might be less downward pressure on wage and price inflation than the unemployment rate alone implies. We explore this apparent discrepancy by looking at the relationship between vacancies and the number of people unemployed (the Beveridge curve) and by estimating a measure of the effectiveness of the labour market at matching unemployed workers with vacancies. We suggest that both the Canterbury earthquakes and international migration flows may have contributed to an apparent decline in the matching efficiency in the labour market.