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Regional Labour Market Spillovers

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Abstract

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.

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  • Cameron Haworth, 2020. "Regional Labour Market Spillovers," Reserve Bank of New Zealand Analytical Notes series AN2020/05, Reserve Bank of New Zealand.
    • Handle: RePEc:nzb:nzbans:2020/05
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    File URL: https://www.rbnz.govt.nz/-/media/ReserveBank/Files/Publications/Analytical%20notes/2020/AN-2020-05-technical-appendix.pdf?revision=4c6af08a-d964-4547-8499-aa5f1896e8d2
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    References listed on IDEAS

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    1. Francis X. Diebold & Kamil Yilmaz, 2009. "Measuring Financial Asset Return and Volatility Spillovers, with Application to Global Equity Markets," Economic Journal, Royal Economic Society, vol. 119(534), pages 158-171, January.
    2. Pesaran, H. Hashem & Shin, Yongcheol, 1998. "Generalized impulse response analysis in linear multivariate models," Economics Letters, Elsevier, vol. 58(1), pages 17-29, January.
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