Wage and employment rates in New Zealand from 1991 to 2001

Abstract

This paper examines the simultaneous determinants of employment and wage rates for people of working age in New Zealand. The determinants are as anticipated and similar to results in other countries. In addition to the effects of the usual variables (such as, education, age, family composition), it is found that unemployment affects the probability of employment negatively, but has no effect on wage rates, living with one's parents decreases the employment probability of singles but increases it for sole parents, and the change in the age of eligibility for the New Zealand Superannuation affects the employment decision, indicating that individuals reacted to incentives to participate at an older age.

Notes

Guyonne Kalb and Rosanna Scutella, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne, Parkville, VIC 3010, Australia, Phone: [phone], Fax: [phone], E‐mail: [email protected]

Thanks to New Zealand Treasury for funding the research on which this paper is based. Access to the data used in this study was provided by Statistics New Zealand, under conditions designed to give effect to the confidentiality provisions of the Statistics Act 1975. We should also like to thank Ron Crawford, John Creedy, John Freebairn, Melissa McKenzie, Tim Maloney, Ivan Tuckwell and participants of a seminar at the Treasury for their helpful comments. Finally, we benefited from the comments by the editor Tim Hazledine and an anonymous referee. The views expressed in this paper are those of the authors and do not represent the views of the Treasury or Statistics New Zealand.