Back to Work: New Zealand

Improving the Re-employment Prospects of Displaced Workers

image of Back to Work: New Zealand

Job displacement (involuntary job loss due to firm closure or downsizing) affects many workers over their lifetime. Displaced workers may face long periods of unemployment and, even when they find new jobs, tend to be paid less and have fewer benefits than in their prior jobs. Helping them get back into good jobs quickly should be a key goal of labour market policy. This report is part of a series of reports looking at how this challenge is being tackled in a number of OECD countries. It shows that in New Zealand most displaced workers find a new job again, largely due to a strong economy and a highly flexible labour market. But many of them face large losses in terms of job quality and especially wages. And displaced workers facing difficulties in New Zealand are largely left on their own to find a new job, as the means-tested public benefit system only provides for people in need and employment services concentrate on helping people off benefit with limited focus on those not receiving a benefit.

Nine countries are participating in the review: Australia, Canada, Denmark, Finland, Japan,

Korea, New Zealand, Sweden and the United States.


Chapter 1. Job displacement in New Zealand and its consequences

Chapter 2 Easing the impact of economic restructuring on displaced workers in New Zealand

Chapter 3 Re-employment support for displaced workers in New Zealand who struggle to find a new job



Executive summary

Workers who involuntarily lose their jobs as firms close or downsize in response to fluctuations in demand and production, can face substantial personal costs through periods of non-employment and lower wages in their new jobs. In early 2016, 1.1% of the New Zealand working-age population – or 29 000 workers – reported being laid off, dismissed or made redundant from their previous job. While the job displacement risk in New Zealand used to be amongst the lowest in the OECD in the mid-2000s, the impact of the economic downturn was stronger than in any other country, lifting New Zealand to the middle of the OECD ranking in 2009. Seven years later, the stock of displaced workers has not yet returned to its pre-crisis levels.


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