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Workforce Implications of Large-scale Land-use Change in Aotearoa New Zealand

Publication: SSRN
Author(s): Kendon Bell, Elliot Poehler, Zhongcen Song, Adam Barker

Many stakeholders across the research sector, central and local government, and iwi Māori believe that diversifying land uses can help to achieve environmental and economic goals in Aotearoa New Zealand. This paper investigates how the workforce might constrain this process by developing a simulation model to examine the effect of land-use change on the labour market for regions in Aotearoa New Zealand.

The model uses assumptions about workforce demand, population growth, the shortage reduction rate, and the labour supply elasticity to dynamically project changes in workforce size, wage rates, and workforce shortages in the food and fibre sector, at the regional scale. The ‘Business as usual’ scenario forecasts an average real wage growth of 12.7% and an average workforce expansion of 8.4% by the end of the simulation period in 2052. Additionally, it predicts an average peak regional workforce shortage of 8.3%.

As a case study, we analyse the Northland region, simulating a regional push for horticulture developments beyond business-as-usual via investment in regional water storage projects. In our most expansive scenario, we simulate a real wage increase of 29.5%, a workforce increase of 43.2%, and a 14.9% peak shortage. In addition to the main scenario where the workforce increases due to higher wages, we analyse two alternative strategies to increase the workforce in response to this increased demand: growing the workforce via population growth and freeing up workers through converting pastoral land into forestry. Success for both strategies would require large deviations from status quo expectations.

The results highlight that building a larger workforce will be a significant barrier to the ambition of labour-intensive land-use change, requiring a combination of strategies if land-use goals are to be met.

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