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New Zealand is one of the only OECD countries to have attempted to impose spatialconstraints on residency as a policy tool in its welfaretoworkstrategy. The LimitedEmployment Locations (LEL) policy introduced in 2004 created 259 limited employmentlocation communities throughout the country in an attempt to influence the residentiallocation of Ministry of Social Development (MSD) clients so they are, “in the right placeat the right time to take advantage of growing employment opportunities” (MSD, 2004a,p1). The overarching goal of the LEL policy is to get more New Zealanders intoemployment (MSD, 2004b, p1) – in doing so reducing New Zealand’s overallunemployment rate and ensuring that, at a time of low unemployment and skill shortages,there are adequate numbers of job seekers available (MSD, 2004d, p2). Unemploymentbeneficiaries have a responsibility to seek work and, according to the new policy, if theymove into any of these mostly small, rural communities without access to reliabletransport, they risk losing their benefit following the end of a sanction process. The LELpolicy thus effectively limits the portability of the unemployment benefit (UB), creating anew geography of welfare eligibility.    Through analysis of policy documents and interviews with MSD and Work and Incomestaff, this research outlines and critically evaluates the motivations and behaviouralassumptions behind the LEL policy. The research then uses the results of acommissioned panel survey, and results of field interviews exploring the views and actualbehaviour of UB recipients, to test the motivations and behavioural assumptions behindthe policy. The research uses as its case area the Opotiki District in New Zealand’s Bayof Plenty Region.   The research traces the evolution of the zones themselves and describes a range ofreactions to the policy. One of the primary findings of the study is the importance of‘home’ in the motivation of beneficiaries moving to LELs, particularly Maoribeneficiaries who dominate movement to LEL areas in the district. This movement is shaped by the desire to maximise living standards and to take advantage of the social,family, and cultural networks that these areas offer. Returning to home LELcommunities occurs in spite of the new policy and the risks of benefit sanctions that itpresents, and there is also very little evidence to date that the LEL policy is encouragingbeneficiary movement to areas of better employment prospects.

Spatial Constraints on Residency as an Instrument of Employment Policy: the Experience of Limited Employment Locations in New Zealand