Labour Productivity in Auckland Firms

67 Pages Posted: 24 Sep 2008 Last revised: 15 Jan 2010

See all articles by David C. Maré

David C. Maré

Motu Economic and Public Policy Research Trust; University of Waikato - Economics

Date Written: June 2008


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.

Keywords: Labour productivity, Urban premium, Agglomeration

JEL Classification: L25, R12, R3

Suggested Citation

Maré, David C., Labour Productivity in Auckland Firms (June 2008). Available at SSRN: or

David C. Maré (Contact Author)

Motu Economic and Public Policy Research Trust ( email )

PO Box 24390
Wellington, 6021
New Zealand
64-4-9394250 (Phone)


University of Waikato - Economics

New Zealand

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