Moving to Jobs? Regional Employment Growth and Internal Migration, 1986-2000

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." 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