Search Results

Policies have been implemented in New Zealand since the early 1990s that encourage long-term immigration of skilled workers and greater temporary immigration of unskilled workers. This paper investigates the contribution of immigration to change in income inequality of New Zealand's urban population and compares that with the contribution of the changing skill composition of the population. We apply sub-group and Shapley-value-regression decompositions of inequality to calculate contributions of eight population groups, defined by skill level and migration status, to inequality. We use microdata from six consecutive population censuses between 1986 and 2013.

We find with both methodologies that: (1) more than 90 per cent of income inequality in each census can be attributed to within-group inequality; (2) the growth in the share of the population that is highly skilled and the growth in the share of foreign born in the population both had inequality-increasing effects; (3) the skill effect exceeded the migration effect. The findings suggest that changes to the level and skill composition of future immigration - triggered by the anticipated 'reset' of New Zealand immigration policies when the border re-opens after the subsiding of the [Coronavirus Disease 2019] COVID-19 pandemic - will impact on future income inequality. Hence our decomposition approaches ought to be revisited after the 2023 census data become available to measure early effects of any new policies.

Published abstract. Show less

We measure the rate of occupational change in New Zealand between 1976 and 2018. We use measures of occupational drift reported by Atkinson and Wu (2017) for the United States and by the Australian Office of the Chief Economist (2018) for Australia. This supports the comparison of occupational change between countries as well as over time. We find that occupational change in New Zealand is broadly similar to that in the US or Australia, and that all three countries experienced a slowing in the rate of occupational change over recent decades. In New Zealand, occupational change was particularly strong between 1986 and 1991 and was historically low between 2006 and 2013, coinciding with the GFC. Current levels of occupational change are similar to those experienced between 1991 and 2006. Employment growth in professional occupations has been particularly strong, growing from 11 per cent of employment in 1976 to 23 per cent in 2018. There has also been pronounced growth and change in the mix of occupations within the 'community and personal services' occupation group and within 'clerical and administrative' occupations.

Published abstract. Show less

In New Zealand, the impact of the Global Financial Crisis (GFC) was milder than in most other developed countries, with employment declining by 2.5 per cent between 2008q4 [fourth quarter] and 2009q4 [fourth quarter]. Job and worker turnover rates both declined, signalling a reduction in labour market liquidity and difficulties for new entrants and high-turnover groups of workers (Fabling and Mare, 2012). The current paper documents the extent and composition of employment change between 2000 and 2011, focusing on the 2008-2010 period, when the labour market impacts of the GFC were strongest. As in previous downturns, the incidence of cyclical job loss and unemployment fell disproportionately on young and unskilled workers. The paper identifies, by age, gender and earnings level, the sensitivity of employment growth and labour market flows to aggregate employment fluctuations and also to relative fluctuations across industries and regions. The accession rate is particularly sensitive to the economic cycle, most strongly for young workers. Differences in the size of cyclical employment fluctuations reflect differing responsiveness to common shocks and not exposure to different industry and local shocks. Finally, the paper traces outcomes for workers whose jobs end, summarising their duration out of work and the wage increases or reductions they experience when they secure employment. Workers who left or lost jobs spent longer out of work after the GFC and settled for lower earnings growth when they did find a job. Both of these effects had partly but not fully abated within three years of the onset of the GFC.

Published abstract reprinted by permission of the copyright owner. Show less

Temporary migrants represent a growing source of employment in some sectors of the New Zealand labour market, particularly in agriculture and hospitality related industries. This research finds that temporary migration had a positive impact on the labour market outcomes of New Zealanders overall and was estimated to have no impact on the number of beneficiaries finding work. Temporary migration was also associated with changes in the industry structure of the New Zealand labour market, as more New Zealanders moved into jobs in the same industries temporary migrants were working in. The research was not able to draw strong conclusions about effects after the global financial crisis, but there was no indication of negative impacts over this period.

Abstract from publisher’s website. Show less

This paper examines the relationship between firm multifactor productivity growth (mfp) and changing skill levels of labour in New Zealand, over the period 2001-12, using longitudinal data from Statistics New Zealand's Longitudinal Business Database (LBD) and Integrated Data Infrastructure (IDI). [The authors] estimate that the average skill of workers declined by 1.8 per cent over the period, reflecting strong employment growth for workers with lower than average skill levels. The net decline was the combined effect of a 3.6 per cent decline in unobserved skill outweighing a 1.8 per cent increase in observed skill, resulting in 1.8 per cent slower estimated skill-adjusted labour growth (13.3 per cent) than the 15.0 per cent growth in full-time equivalent (FTE) employment.

Mirroring the skill-dilution, skill-adjusted mfp growth averaged 0.24 per cent per annum over the period compared to 0.14 per cent per annum for unadjusted growth. The patterns were stronger over the pre-[global financial crisis] GFC period to 2008, during which adjusted and unadjusted mfp grew 0.57 per cent per annum and 0.42 per cent per annum respectively. [The authors'] analysis of the effect of changing skill on mfp growth finds that the impact of skill adjustment was almost entirely due to changing skill composition within continuing firms.

Published abstract reprinted by permission of the copyright owner. Show less

This paper summarises the changing nature of qualifications across the working age population in New Zealand over the period from 1986 to 2001, and investigates the relationships between the changing qualification distribution and employment and income. First, the results confirm that there was a general upskilling of the population, as measured by formal educational qualifications. Second, we examine patterns of qualification change and employment growth measured in job groups, and find that the upskilling of the population occurred across a wide range of job-groups. Also, although the results show the employment growth was strongest in job-groups with high initial levels of skilled workers, employment growth is only weakly related to upskilling. Third, we decompose the change in the value of human capital into contributions due to changes in the qualification mix, changes in the (economic) returns to qualifications, and the interaction between these two factors. The value of human capital increased by 20% over the period: about 75% of this increase can be attributed to increasing incomes holding constant the mix of qualifications, 15-20% to an increasing skill mix, and the residual to interaction effects.

Published abstract reprinted by permission of the copyright owner. Show less

In this paper we document patterns of annual employment across jobs, workers and firms, and examine the relationship between these patterns and job-level earnings rates using data from Statistics New Zealand’s Linked Employer-Employee Database (LEED). First, we characterise workers’ annual employment along the intensive (or full-time, within month) and extensive (or full-year, across months) dimensions, and firm’s mix of full-time and full-year jobs, we use this characterisation to describe the nature of employment matching between workers and firms, and find that part-time workers are overrepresented in firms with a lot of part-time work. Second, we examine the relationship between the intensive and the extensive margin characteristics of jobs and their earnings, Although there is a strong raw earnings penalty associated with part-time jobs, we estimate only a modest direct part-time impact on earnings after controlling for other worker and firm factors, and we estimate a part-year earnings premium.

Published abstract reprinted by permission of the copyright owner. Show less

This paper uses data from the 1996, 2001 and 2006 New Zealand Census to examine how the supply of immigrants in particular skill-groups affects the employment and wages of the New Zealand-born and of earlier migrants. We first estimate simple Constant Elasticity of Substitution (CES) production functions that allow for substitutability between workers from different skill-groups, but assume that, within skillgroups, migrants are perfect substitutes for non-migrants. We next estimate hierarchical CES production functions that allow for substitutability between immigrant and non-immigrant workers within skill-groups, but constrain the patterns of wage impacts on different factors in response to changing factor shares, and that natives and migrants are not substitutable across skill-groups. Then, we extend the previous literature by estimating a Generalised Leontief production function that allows for a less restrictive relationship between changes in factors shares and changes in wages within a particular level of the production function and for substitution and complementarity between immigrant and non-immigrant workers both between and across skill-groups. Regardless of the model being estimated, we find little evidence that immigrants negatively affect either the wages or employment opportunities of the average New Zealand-born worker. However, we find some evidence that increases in the number of high-skilled recent migrants have small negative impacts on the wages of high-skilled New Zealand-born workers, which are offset by small positive impacts on the wages of medium-skilled New Zealanders.

Published summary. Show less

[The authors use] linked employer-employee data from 2004-2012, combined with individual qualifications data from 1994-2012, to study how graduates with different skills fare in the labour market in the six years after studying. [The authors] find that graduates experience improvements in earnings, and that they systematically move between jobs, industries and locations in a pattern that is consistent with their securing better job matches, particularly for high level [science, technology, engineering and mathematics] STEM graduates.

[The authors] then estimate joint production function and wage equations to see how the skill composition of a firm's employees correlates with productivity, and compare this with how the skill composition correlates with its wage bill. [The] results suggest that degree graduates make a growing positive contribution to production in the six years after graduation, with associated wage growth. There is variation in relative productivity and wages across groups of graduates that differ by field of study and level of qualification.

Published abstract. Show less

[The authors] use data from the New Zealand census to examine how the arrival of new migrants affects the geographic mobility of the New Zealand (NZ)-born and earlier migrants. [The authors] identify the impact of recent migration by exploiting the fact that immigration is spatially concentrated, and therefore a change in the local supply of migrants in a particular skill-group should have an impact on the mobility of similarly skilled non-migrants in that local labour market. Overall, [the] results provide little support for the hypothesis that migrant inflows displace either the NZ-born or earlier migrants with similar skills in the areas that new migrants are settling.

Published abstract. Show less