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On The dynamic of search, matching and productivity in New Zealand and Australia

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  • Razzak, Weshah

Abstract

As far as we know there has been no, or very little, empirical examination of search models and unemployment – vacancy relationship in New Zealand. We empirically examine dynamic matching functions in the New Zealand labor market over the period 1986-2006. Further, it is well documented that although New Zealand and Australia embarked on similar wide economic reforms almost 25 years ago, the level of New Zealand’s labor productivity is still lower than that of Australia (Razzak, 2007) and lower than the US productivity level (Prescott, 2002). It is has been argued that among the main explanatory variable is the low level of capital intensity – capital per hour worked - Razzak (2007) and Hall and Scobie (2005). However, there has been no formal explanation for the low level of capital intensity. This paper explains why capital investments are relatively lower in New Zealand. We do this by examining the dynamics of the labor markets in New Zealand and Australia.

Suggested Citation

  • Razzak, Weshah, 2008. "On The dynamic of search, matching and productivity in New Zealand and Australia," MPRA Paper 8262, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:8262
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    References listed on IDEAS

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    1. Christopher A. Pissarides & Barbara Petrongolo, 2001. "Looking into the Black Box: A Survey of the Matching Function," Journal of Economic Literature, American Economic Association, vol. 39(2), pages 390-431, June.
    2. Razzak, Weshah, 2005. "Explaining the gaps in labour productivity in some developed countries," MPRA Paper 1888, University Library of Munich, Germany, revised May 2006.
    3. Monika Merz & Eran Yashiv, 2007. "Labor and the Market Value of the Firm," American Economic Review, American Economic Association, vol. 97(4), pages 1419-1431, September.
    4. Anthony De Francesco, 1999. "The relationship between unemployment and vacancies in Australia," Applied Economics, Taylor & Francis Journals, vol. 31(5), pages 641-652.
    5. Fontaine, Francois, 2007. "A simple matching model with social networks," Economics Letters, Elsevier, vol. 94(3), pages 396-401, March.
    6. Julia Hall & Grant Scobie, 2005. "Capital Shallowness: A Problem for New Zealand?," Treasury Working Paper Series 05/05, New Zealand Treasury.
    7. Dale Mortensen & Eva Nagypal, 2007. "More on Unemployment and Vacancy Fluctuations," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 10(3), pages 327-347, July.
    8. Aki Kangasharju & Jaakko Pehkonen & Sari Pekkala, 2005. "Returns to scale in a matching model: evidence from disaggregated panel data," Applied Economics, Taylor & Francis Journals, vol. 37(1), pages 115-118.
    9. Pissarides, Christopher A, 1984. "Search Intensity, Job Advertising, and Efficiency," Journal of Labor Economics, University of Chicago Press, vol. 2(1), pages 128-143, January.
    10. Pissarides, Christopher A, 1985. "Short-run Equilibrium Dynamics of Unemployment Vacancies, and Real Wages," American Economic Review, American Economic Association, vol. 75(4), pages 676-690, September.
    11. Diamond, Peter A, 1982. "Aggregate Demand Management in Search Equilibrium," Journal of Political Economy, University of Chicago Press, vol. 90(5), pages 881-894, October.
    12. Ian King, 2003. "A directed tour of search-theoretic explanations for unemployment," New Zealand Economic Papers, Taylor & Francis Journals, vol. 37(2), pages 245-267.
    13. Brian Silverstone, 2001. "Some Aspects of Labour Market Flows in New Zealand 1986-2001," Working Papers in Economics 01/02, University of Waikato.
    14. Peter A. Diamond, 1982. "Wage Determination and Efficiency in Search Equilibrium," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 49(2), pages 217-227.
    15. Brian Silverstone, 2004. "Help Wanted in New Zealand: The ANZ Bank Job Advertisement Series," Working Papers in Economics 04/03, University of Waikato.
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    Cited by:

    1. W. A. Razzak, 2016. "New Zealand Labor Market Dynamics: Pre- and Post-global Financial Crisis," Journal of Business Cycle Research, Springer;Centre for International Research on Economic Tendency Surveys (CIRET), vol. 12(1), pages 49-79, September.
    2. Parantap Basu, 2009. "Understanding Labour Market Frictions: An Asset Pricing Approach," Bulletin of Economic Research, Wiley Blackwell, vol. 61(4), pages 305-324, October.
    3. Richard Dutu & Mark J. Holmes & Brian Silverstone, 2009. "Modelling a Regime-Shifting New Zealand Beveridge Curve," Working Papers in Economics 09/13, University of Waikato.

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    More about this item

    Keywords

    Matching Function; Beveridge curve; Labor Productivity;
    All these keywords.

    JEL classification:

    • C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes

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