08/09: Labour Productivity in Auckland Firms

August 2008

• ISBN: 978-0-478-31696-4 (HTML)
• ISBN: 978-0-478-31697-1 (PDF)

Author: David C. Maré (Motu Economic & Public Policy Research)

Abstract

This paper examines labour productivity in Auckland, New Zealand's largest city, using microdata from Statistics New Zealand's Prototype Longitudinal Business Database. It documents a sizeable productivity premium in Auckland, around half of which is due to industry composition. There is a cross sectional correlation between productivity and employment density, reflecting differences in both physical productivity and prices. This correlation is evident both within Auckland, and comparing Auckland with other areas. The relationship between changes in density and changes in productivity is less strong. The relationship between productivity and overall or own-industry employment density varies across industries, suggesting that the nature and extent of agglomeration benefits varies. Overall, localisation effects appear stronger than urbanisation, with productivity being more strongly related to own-industry density than to overall density.

JEL Classification: L25; R12; R3

Keywords: Labour productivity; urban premium; agglomeration

Contact: Occasionalpapers@med.govt.nz

Disclaimer

Access to the data used in this study was provided by Statistics NZ in accordance with security and confidentiality provisions of the Statistics Act 1975. Only people authorised by the Statistics Act 1975 are allowed to see data about a particular, business or organisation. The results in this paper have been confidentialised to protect individual businesses from identification. The results are based in part on tax data supplied by Inland Revenue to Statistics NZ under the Tax Administration Act 1994. This tax data must be used only for statistical purposes, and no individual information is published or disclosed in any other form, or provided back to Inland Revenue for administrative or regulatory purposes. Any person who had access to the unit-record data has certified that they have been shown, have read and have understood section 81 of the Tax Administration Act 1994, which relates to privacy and confidentiality. Any discussion of data limitations or weaknesses is not related to the data's ability to support Inland Revenue's core operational requirements. Any table or other material in this report may be reproduced and published without further licence, provided that it does not purport to be published under government authority and that acknowledgement is made of this source.

The views, opinions, findings, and conclusions or recommendations expressed in this Occasional Paper are strictly those of the author(s). They do not necessarily reflect the views of the Ministry of Economic Development, Statistics New Zealand, or any other agencies to which the authors are affiliated. The Ministry takes no responsibility for any errors or omissions in, or for the correctness of, the information contained in these occasional papers. The paper is presented not as policy, but with a view to inform and stimulate wider debate

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