The Long-Run Impact of New Zealand’s Structural Reform on Local Communities

Published: 2010

Authors: Steven Stillman, Malathi Velamuri, Andrew Aitken

New Zealand underwent a period of comprehensive market-oriented economic reforms from 1984 to 1993. In this paper, we use data from the 1986, 1991, 1996 and 2001 New Zealand census to examine the long-run impact that these reforms had on local communities.

We analyse the adjustment process in 140 local labour market areas by creating three measures of the impact of structural reform on local communities and examining the persistence of these shocks over time. We find that communities which experienced smaller employment shocks have higher employment rates and a more skilled workforce in the medium and long-term. Population shocks also have positive, sizeable and persistent effect on future population size.

Overall, the initial impacts of the reforms undertaken in New Zealand on local communities appear to still endure more than a decade later.

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Stillman, Steven, Malathi Velamuri and Andrew Aitken. 2010. "The Long-Run Impact of New Zealand's Structural Reform on Local Communities," Journal of Comparative Economics, 38:4, pp. 432-48.