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Skills, Economic Crises and the Labour Market

Author

Listed:
  • Kabir Dasgupta

    (NZ Work Research Institute, Faculty of Business, Economics and Law at AUT University)

  • Alexander Plum

    (NZ Work Research Institute, Faculty of Business, Economics and Law at AUT University)

Abstract

Do higher skills help mitigate the negative impact of economic crises? We study the effect of two major economic setbacks–the Global Financial Crisis (GFC) in 2007-09 and the COVID-19 lockdown in 2020–on wage progression for New Zealanders with different skill levels. For our analysis, we link the PIAAC survey data on literacy and numeracy skills with the Inland Revenue’s tax records that document the entire workforce’s monthly labor market information. During the GFC, the adverse impact of the economic shock on wage progression appears to be significantly lower for the higher-skilled population. Moreover, the low skilled group experienced the largest wage drop when changing their employer during the GFC crisis. However, during the recent pandemic-induced lockdown period, we cannot detect differences in wage progression across skill levels.

Suggested Citation

  • Kabir Dasgupta & Alexander Plum, 2022. "Skills, Economic Crises and the Labour Market," Working Papers 2022-01, Auckland University of Technology, Department of Economics.
    • Handle: RePEc:aut:wpaper:202201
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    Cited by:

    1. Lisa Meehan & Gail Pacheco & Thomas Schober, 2023. "Basic Reading and Mathematics Skills and the Labour Market Outcomes of Young People: Evidence from PISA and Linked Administrative Data," The Economic Record, The Economic Society of Australia, vol. 99(327), pages 473-491, December.

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    More about this item

    Keywords

    skills; economic crises; wage progression; PIAAC; administrative data;
    All these keywords.

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development

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