The Response of Consumption in Russian Households to Economic Shocks

This paper examines the extent to which consumption in Russian households responds to exogenous income shocks. During the time period studied in this paper (1994 - 1998), Russia experienced two major economic crises. Both featured extreme movements in the real ruble-dollar exchange rate. The price of oil, which is typically thought to have a strong effect on the Russian economy, was also quite volatile during this time period. This paper exploits these large changes in oil prices and exchange rates, as well as community-level variations in wage and pension arrears, to identify exogenous shocks to household income. Using representative panel data on urban households from the Russian Longitudinal Monitoring Survey, I find that a household which experiences an exogenous shock of 10% of its total income changes both its food and total non-durable expenditure by 7-11%. Most evidence indicates that these shocks are transitory in nature and thus the traditional Life Cycle/Permanent Income Hypothesis model is firmly rejected as describing the behavior of Russian households. Additional results indicate that changes in household savings are negatively related to exogenous income shocks, with this relationship strongest for low wealth households. Only models of consumption which include precautionary savings motives can explain why poorer households both reduce their consumption and increase their savings in response to an exogenous decline in income.http://deepblue.lib.umich.edu/bitstream/2027.42/39796/3/wp412.pd

Review of Generalized Estimating Equations by Hardin and Hilbe

The new book by Hardin and Hilbe (2003) is reviewed. Copyright 2003 by Stata Corporation.generalized estimating equations, generalized linear models

The importance of heterogeneity when examining immigrant education-occupation mismatch: evidence from New Zealand

Many immigrants are overqualified in their first job after arrival in the host country. Education-occupation mismatch can affect the economic integration of immigrants and the returns to education and experience. The extent of this problem has been measured in recent years by means of micro level data in Australia, North America and Europe. However, these papers have typically ignored the importance of allowing for heterogeneity, in particular by qualification level and years in the destination country. In this paper, we use data from the 1996, 2001 and 2006 New Zealand censuses to examine differences between each migrant’s actual years of education and the estimated typical years of education in the narrowly defined occupation in which they work. We find that migrants living in New Zealand for less than 5 years are on average overeducated, while earlier migrants are on average undereducated. However, once accounting for heterogeneity, we find that both overeducated and undereducated migrants become, with increasing years of residence in New Zealand, more similar to comparable native born. Convergence from overeducation is stronger than from undereducation

The Long-Run Impact of New Zealand's Structural Reform on Local Communities

New Zealand underwent a period of comprehensive market-oriented economic reforms from 1984-93. In this paper, we use data from the 1986, 1991, 1996 and 2001 Censuses to examine the long-run impact that these reforms had on local communities. We analyse the adjustment process in 140 local labour market areas (LMAs) by creating three measures of the impact of structural reform on local communities - an employment-based measure, a population measure and a housing price measure - and examine the persistence of these shocks over time. We find that communities which experienced smaller employment shocks have higher employment rates, higher average incomes and a more skilled workforce in the medium and long-term. Population shocks also have positive, sizeable and persistent effect on average incomes and population in the future. Overall, the initial impacts of the reforms undertaken in New Zealand on local communities appear to still endure more than a decade later.Structural Reform, New Zealand, Communities, Local Labour Markets

The Geographical Mobility of Maori in New Zealand

This paper describes the geographical location and internal mobility of the Maori ethnic group in New Zealand between 1991 and 2001. It is often suggested that Maori are less mobile than other ethnic groups because of attachment to particular geographical locations. We compare the mobility of Maori in particular locations to the mobility of similar Europeans in those same locations and find that, contrary to this anecdotal evidence, most Maori are, on average, more mobile than Europeans in New Zealand. We do find that the roughly forty percent of Maori who live in areas local to their iwi (tribe) are less mobile than comparable Europeans in those same areas. Defining local areas both based on both traditional iwi locations and current iwi populations, we find suggestive evidence that social ties are more important than land-based attachment in explaining why these Maori are relatively less mobile, but that land-based attachment is also an important impediment to mobility.Mobility, Migration, Social Networks, New Zealand, Maori, Labour Market Areas

The Impact of Immigration on the Geographic Mobility of New Zealanders

This paper uses data from the New Zealand Census to examine how the supply of recent migrants in particular skill groups affects the geographic mobility of the New Zealand-born and earlier migrants. We identify the impact of recent migration on mobility using the "area-analysis" approach, which exploits the fact that immigration is spatially concentrated, and thus a change in the local supply of migrants in a particular skill group should have an impact on the mobility of similarly skilled nonmigrants in that local labour market. Overall, our results provide little support for the hypothesis that migrant inflows displace either the NZ-born or earlier migrants with similar skills in the areas that new migrants are settling. If anything, they suggest that there are positive spillovers between recent migrants and other individuals that encourage individuals to move to or remain in the areas in which similarly skilled migrants are settling. Thus, it appears unlikely that internal mobility moderates any potential impacts of immigration on labour or housing markets in New Zealand.Immigration, Mobility, New Zealand, Labour Market Areas

Regional Economic Performance in New Zealand: How Does Auckland Compare?

In this study we investigate Auckland’s economic performance relative to other large cities in New Zealand, to medium-sized urban centres and to small towns and rural areas. Measures of regional economic performance are not well developed in New Zealand and there is a relative lack of official data at the regional level. Previous measures developed by two non-governmental organisations have suggested that Auckland is “underperforming” relative to other regions in New Zealand. However, neither of these measures satisfactorily capture productivity performance by areas that are classified according to the density of economic activity that takes place within them. We use data from the annual New Zealand Income Survey to examine hourly earnings and other measures of labour productivity and utilisation for a number of regional areas. Our results tell a fairly consistent story. Auckland and Wellington have the highest levels of productivity performance based on almost all measures of earnings. In particular, both have significantly higher average levels of labour income, and wage rates than the three other comparison areas. Auckland has also experienced stronger growth in wages, in particular for wage/salary workers, than other regions. Our findings cast doubt on the hypothesis that Auckland has been a productivity underperformer within New Zealand. In fact, Auckland appears to be a relatively good performer and this is consistent with agglomeration economies being at work in New Zealand’s largest urban concentration. However, because we limited our investigations to within New Zealand we are not able to say how Auckland’s productivity performance compares to innovative, high-skill cities in other countries. Given New Zealand’s overall poorer performance in labour productivity and the rather modest wage rate growth that we find even for Auckland, it is unlikely to have been as good.regional economic performance, Auckland, productivity, New Zealand

Youth Minimum Wage Reform and the Labour Market

This paper analyses the effects of a large reform in the minimum wages affecting youth workers in New Zealand since 2001. Prior to this reform, a youth minimum wage, applying to 16-19 year-olds, was set at 60% of the adult minimum. The reform had two components. First, it lowered the eligible age for the adult minimum wage from 20 to 18 years, and resulted in a 69 percent increase in the minimum wage for 18 and 19 year- olds. Second, the reform raised the youth minimum wage in two annual steps from 60% to 80% of the adult minimum, and resulted in a 41 percent increase in the minimum wage for 16 and 17 year-olds over a two-year period. We use data from the New Zealand Household Labour Force Survey (HLFS) to estimate the impact of these changes on a variety of labour market and related outcomes. We compare the average outcomes of these two groups of teenagers, before and after the policy reform, to those of 20-25 year- olds, who were unaffected by the reform. We find no robust evidence of adverse effects on youth employment or hours worked. In fact, we find stronger evidence of positive employment responses to the changes for both groups of teenagers, and that 16-17 year-olds increased their hours worked by 10-15 percent following the minimum wage changes. Given the absence of any adverse employment effects, we find significant increases in labour earnings and total income of teenagers relative to young adults. However, we do find some evidence of a decline in educational enrolment, and an increase in unemployment and inactivity, although these results depend on the specification adopted.Minimum wage, New Zealand, natural experiment, difference-in-differences

The Geographical Mobility of Mâori in New Zealand

This paper describes the geographical location and internal mobility of the Mâori ethnic group in New Zealand between 1991 and 2001. It is often suggested that Mâori are less mobile than other ethnic groups because of attachment to particular geographical locations. We compare the mobility of Mâori in particular locations to the mobility of similar Europeans in those same locations and find that, contrary to this anecdotal evidence, most Mâori are, on average, more mobile than Europeans in New Zealand. We do find that the roughly forty percent of Mâori who live in areas local to their iwi (tribe) are less mobile than comparable Europeans in those same areas. Defining local areas both based on both traditional iwi locations and current iwi populations, we find suggestive evidence that social ties are more important than land-based attachment in explaining why these Mâori are relatively less mobile, but that land- based attachment is also an important impediment to mobility.Mobility, Migration, Social Networks, New Zealand, Mâori, Labour Market Areas

How important is selection? Experimental vs non-experimental measures of the income gains from migration

Measuring the gain in income from migration is complicated by non-random selection of migrants from the general population, making it hard to obtain an appropriate comparison group of non-migrants. This paper uses a migrant lottery to overcome this problem, providing an experimental measure of the income gains from migration. New Zealand allows a quota of Tongans to immigrate each year with a lottery used to choose amongst the excess number of applicants. A unique survey conducted by the authors in these two countries allows experimental estimates of the income gains from migration to be obtained by comparing the incomes of migrants to those who applied to migrate, but whose names were not drawn in the lottery, after allowing for the effect of non-compliance among some of those whose names were drawn. We also conducted a survey of individuals who did not apply for the lottery. Comparing this non-applicant group to the migrants enables assessment of the degree to which non-experimental methods can provide an unbiased estimate of the income gains from migration. We find evidence of migrants being positively selected in terms of both observed and unobserved skills. As a result, non-experimental methods are found to overstate the gains from migration, by 9 to 82 percent. A good instrumental variable works best, while difference-in-differences and bias-adjusted propensity-score matching also perform comparatively well