Assessing The Labour Market Response Due to COVID-19 Border Restrictions: A Case Study of Canterbury, New Zealand

Abstract

<p> Labour markets respond to supply and demand changes caused by external shocks, including pandemics. In 2020 and 2021, the Coronavirus disease-2019 (COVID-19) pandemic caused a sudden reduction in labour demand in certain industries globally. As economies emerge into the post COVID-19 reality, a return of patterns caused by ongoing structural pressures return. In Canterbury, a region centred on Christchurch in New Zealand, these include migration demand pressures. This paper uses data from the Canterbury region, which is no stranger to disasters, as a case study. Two models are developed to estimate the future workforce requirements during the recovery period. A population growth model is utilised to test the regional labour market's limits, while an economic model estimates the required jobs for the regional economy. The paper finds that the lower economic activity resulting from COVID-19 has reduced the near-term employment demand. At the same time, labour force transition coupled with strict border controls reveals the need for labour force participation to adjust during the extended recovery period. Although short-term demand for skilled migration remains lower, those leaving the workforce will require replacing. </p>