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.
Speci fi cation Test for Panel Data Models with Interactive Fixed E ff ects ∗
In this paper, we propose a consistent nonparametric test for linearity in a large dimensional panel data model with interactive fixed effects. Both lagged dependent variables and conditional heteroskedasticity of unknown form are allowed in the model. We estimate the model under the null hypothesis of linearity to obtain the restricted residuals which are then used to construct the test statistic. We show that after being appropriately centered and standardized, the test statistic is asymptotically normally distributed under both the null hypothesis and a sequence of Pitman local alternatives by using the concept of conditional strong mixing that was recently introduced by Prakasa Rao (2009). To improve the finite sample performance, we propose a bootstrap procedure to obtain the bootstrap -value. A small set of Monte Carlo simulations illustrates that our test performs well in finite samples. An application to an economic growth panel dataset indicates significant nonlinear relationships between economic growth, initial income level and capital accumulation.