Employment Dynamics in Regional Labour Markets: An Application of Gross Flows Analysis
This paper uses gross flows data for regions to show how the chance of leaving employment varies from place to place within New Zealand and how this risk of leaving employment influences subsequent search behaviour. We define labour market risk as the failure to sustain a continuous income stream through employment. Estimates of employment risk are made by applying a linear logit model to selected transition probabilities estimated from a quarter to quarter gross flows matrix constructed from New Zealand Household Labour Force Survey returns for the 14 year period 1986to 1999. We show how the risk of employment separations increase as the size of regional labour markers declines and their demand for labour weakens and how the diminished opportunities for employment in the peripheral regions encourages active rather than passive searching among those who leave employment. In regions with relatively high labour demand leaving employment is more likely to be followed by withdrawal from the labour force. By contrast, labour leaving employment in the weaker, provincial, labour markets is more likely to be followed by active searching (and hence unemployment). The way in which employment risk modifies search behaviour across the country affects the unemployed rate, raising it in weak markets and lowering overstating it in strong markers both temporally and geographically.
Education and Training in the Labour Force
In their 1997 green paper on tertiary education the Ministry of Education said, "to ensure our prosperity New Zealand needs to be a 'learning society' recognising the importance for all of our people to continue to develop new skills and knowledge throughout a person’s lifetime." Given the importance of an educated and adaptable workforce, there is surprisingly little information available on education and training undertaken in New Zealand. While some information is collected on those enrolled in study towards formal education qualifications, there is little available information on human capital development beyond this. One of the few sources of information is the Education and Training Survey (ETS), conducted in September 1996. This paper uses information collected in the ETS to look at the characteristics of those participating in education and training as well as the barriers to and reasons for participation in education and training. lt then goes on to compare the labour market outcomes of those people who participated in education and training with those who did not.
When to Cross the Spread? Trading in Two-Sided Limit Order Books
In this paper the problem of optimal trading in illiquid markets is addressed when the deviations from a given stochastic target function describing, for instance, external aggregate client flow are penalized. Using techniques of singular stochastic control, we extend the results of [F. Naujokat and N. Westray, Math. Financ. Econ., 4 (2011), pp. 299--335] to a two-sided limit order market with temporary market impact and resilience, where the bid ask spread is now also controlled. In addition to using market orders, the trader can also submit orders to a dark pool. We first show existence and uniqueness of an optimal control. In a second step, a suitable version of the stochastic maximum principle is derived which yields a characterization of the optimal trading strategy in terms of a nonstandard coupled forward-backward stochastic differential equation (FBSDE). We show that the optimal control can be characterized via buy, sell, and no-trade regions. The new feature is that we now get a nondegenerate no-...