I think you are putting a bit much weight on certain hypotheses here – the labour market recovery hasn’t significantly lagged the economic recovery in New Zealand.

Changes in matching, firm structure, and the relative rates of destruction vs creation are major points – don’t get me wrong. But the initial premise of a slow labour market adjustment isn’t a stylized fact for NZ – it is for the US, but we are very very different.

Yes we have low levels of ICT uptake, but then we also have to ask “why are participation rates in NZ so high”. Low capital per worker doesn’t tell us anything about employment rates in of itself, it only tells us about output per worker and real wage rates.

We need to be careful tying too much to a single hypothesis such as “NZ management sucks” – our scale, distance from market, and tax structure are also very important factors. And we need a clear idea of “what” is causing a series of stylized facts before we can even say whether something is good or bad – it would not be hard to make a narrative where NZ’s low productivity is actually seen as a policy choice where the low productivity is a “desired” outcome!

Interesting. Thinking about it in terms of gravity theory, could it be that Australian cities simply have more of certain “types” of New Zealander’s, and as a result attract those types from New Zealand.

The large ex-pat communities in Australia are fully blown communities, and may offer more to people who are moving from poorly performing areas than the strongly performing parts of New Zealand. Could it be that Brisbane feels more at like home for people from the rural North Island and South Auckland than Southland or Auckland City do?

I am looking forward to the paper, this is a really interesting issue!

Agree re South Auckland, but also more broadly across regions. My superficial analysis of the census employment data suggests some big issues in many provinces of NZ, re ‘backward’ looking industries and poor performance within those industries (eg more manufacturing than the norm and worse job losses than in manufacturing than the national average).

Labour mobility is an important issue. Jacques Poot touches on it in a paper yet to be released, but I would love to see what it shows. For regions like Southland, which have positively surprised on population and employment growth, have done so with international migration, rather than regional migration.

I am also not sure how to think about labour mobility in the context of an international or at least Australasian labour market. Many people do move, but those who do often choose to to go Australia than another province, given the economic benefits are so much larger.