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The Relationship Between Employment And Earnings In Singapore: 1991–2012

Author

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  • G. K. RANDOLPH TAN

    (Centre for Applied Research (CFAR), SIM University 461 Clementi Road, Singapore 599491, Singapore)

Abstract

Since its formation in 1972 under the leadership of its founding chairman, Professor Lim Chong Yah, the NWC has been a major force in ensuring the stability of the labor market. A key recommendation which the NWC pushed for as a means of saving jobs in the recessions has been the reduction of the cost of labor to employers. The underlying assumption was that the reaction of demand to reduced labor costs would be large enough to justify such an approach. The main aim of this paper is to derive estimates of the elasticity of demand for labor using a suitable time-series econometric approach. The estimates imply that the elasticity of demand for labor in Singapore is less than but close to being unitary in magnitude.

Suggested Citation

  • G. K. Randolph Tan, 2014. "The Relationship Between Employment And Earnings In Singapore: 1991–2012," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 59(03), pages 1-22.
    • Handle: RePEc:wsi:serxxx:v:59:y:2014:i:03:n:s0217590814500222
    DOI: 10.1142/S0217590814500222
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    References listed on IDEAS

    as
    1. Pesaran, M. H. & Shin, Y. & Smith, R. J., 1996. "Testing for the 'Existence of a Long-run Relationship'," Cambridge Working Papers in Economics 9622, Faculty of Economics, University of Cambridge.
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    3. Disney, Richard & Ho, Soo Kiang, 1990. "Do Real Wages Matter in an Open Economy? The Case of Singapore: 1966-1987," Oxford Economic Papers, Oxford University Press, vol. 42(3), pages 635-657, July.
    4. Paresh Kumar Narayan, 2005. "The saving and investment nexus for China: evidence from cointegration tests," Applied Economics, Taylor & Francis Journals, vol. 37(17), pages 1979-1990.
    5. Ichiro Otani & Cyrus Sassanpour, 1988. "Financial, Exchange Rate, and Wage Policies in Singapore, 1979-86," IMF Staff Papers, Palgrave Macmillan, vol. 35(3), pages 474-495, September.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Employment; demand for labor; time-series modelling; JEL Classification: C22; JEL Classification: C32; JEL Classification: E24; JEL Classification: E6; JEL Classification: J23;
    All these keywords.

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand

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