Home » » Firm performance and labour dynamics

Our Research

Firm performance and labour dynamics

Motu's research on firm performance and labour dynamics addresses questions such as whether whether a worker is full time or part time has an effect on their relative earnings, and whether this effect is primarily linked to workers or firms. We have also looked at the relationship between overall employment growth in New Zealand and wage increases between 1999 and 2007, and the effects of changes to youth minimum wage legislation in the same period.

Motu’s labour market research makes use of a Statistics New Zealand data set, the Linked Employer-Employee Database (LEED). LEED contains longitudinal data collected via tax records for workers and firms in all sectors of the economy.

Our research focus

Motu’s current and recent research into firm performance and labour dynamics includes:

Looking into cyclical labour market adjustment to discover how economic downturns and recoveries affect the labour market experiences of workers and firms.
Investigating how knowledge flows between firms.

Publications

Pay in Māori-led firms

Authors: Dave Maré | Richard Fabling

Working Paper

This study examines whether working in a Māori-led firm contributes to the earnings of Māori employees. It uses administrative data for 2005-2020 to identify Māori-led firms, based on the ethnicity and descent of working proprietors,…

COVID-19 Wage Subsidy: Outcome evaluation

Authors: Dave Maré | Dean Hyslop | Shannon Minehan

Working Paper

Wage Subsidy Scheme
kept firms and workers active
and softened the blow

The COVID-19 pandemic has caused substantial disruption in social and economic activity since March 2020.

COVID-19 Wage Subsidy: Outcome Evaluation - Value for Money

Authors: Dave Maré | Caroline Fyfe | Phoebe Taptiklis

Working Paper

We evaluated the value for money of the COVID-19 Wage Subsidy Support programme (WSS) using cost-benefit analysis from a societal perspective, encompassing the New Zealand economy as a whole.

Minimum Wages in New Zealand: Policy and practice in the 21st century

Authors: Dave Maré | Dean Hyslop

Working Paper

This paper reviews the changes and impacts of the Statutory Minimum Wage in Aotearoa New Zealand over the past 20 years. The research finds minimum wage policies are not as effective as claimed by its…

Covid-19 wage subsidy support and effects

Authors: Dave Maré | Dean Hyslop

Working Paper

This note provides a brief preliminary analysis of the short run impact of COVID-19 and the government’s Covid Wage Subsidy (CWS) response on labour market flows. We focus on two issues. First, to examine the…

Entrepreneurial beginnings: Transitions to self-employment and the creation of jobs

Author: Richard Fabling

Working Paper

Entrepreneurship
creates jobs, but few firms grow.
Who survives and thrives?

Owner-operated firms are an important part of the New Zealand economy. They employ approximately 30% of the private-for-profit workforce, as well as providing jobs…

Worker-Firm Heterogeneity and Matching: An Analysis Using Worker and Firm Fixed Effects Estimated From LEED

Authors: Dave Maré | Dean Hyslop

Working Paper

This was commissioned as a LEED Research Report by Statistics New Zealand

This paper uses Statistics New Zealand's Linked Employer-Employee Data (LEED) over the six year period April 1999-March 2005 to derive and analyse estimates of two-way worker and…

Youth Minimum Wage Reform and the Labour Market

Authors: Dean Hyslop | Steven Stillman

Article

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…

The labor market in New Zealand, 2000–2017

Author: Dave Maré

Article

New Zealand is a small open economy, with large international labor flows and skilled immigrants. Since 2000, employment growth has kept pace with strong migration-related population growth. While overall employment rates have remained relatively stable,…

Are patent fees effective at weeding out low-quality patents?

Authors: Adam Jaffe | Gatan de Rassenfosse

Article

The paper investigates whether patent fees are an effective mechanism to deter the filing of low-quality patent applications. The study analyzes the effect on patent quality of the Patent Law Amendment Act of 1982, which…

Firm productivity growth and skill

Authors: Dave Maré | Richard Fabling

Article

This paper examines firm multifactor productivity (mfp) growth and changing skill levels of labour in New Zealand, using NZ microdata for 2001–2012. Strong employment growth for lower skilled workers lowered average skill by 1.8% over…

Firm-Level Hiring Difficulties: Persistence, Business Cycle and Local Labour Market Influences

Authors: Dave Maré | Richard Fabling

Article

We examine the correlates of reported hiring difficulties at the firm level using linked employer-employee and panel survey data over 2005-2011, focussing on the relative influence of firm-level characteristics, persistence, the business cycle and local…

Modelling Regional Labour Market Adjustment in New Zealand

Authors: Dave Maré | Peter Mawson | Wai Kin Choy

Other

This paper adopts a vector autoregressive (VAR) approach to analyse the labour market adjustment mechanisms for 12 New Zealand regions over the period 1985 to 2001. It examines the effects of a region-specific shock to employment on…

Firm productivity growth and skill presentation

Author: Dave Maré

Presentation

Motu Economic and Public Policy Research and Productivity Hub agencies (Ministry of Business, Innovation and Employment, Productivity Commission, Statistics New Zealand and Treasury) are working together to use the LBD to better understand New Zealand’s…

Firm Productivity Growth and Skill

Authors: Dave Maré | Dean Hyslop | Richard Fabling

Working Paper

Quals are increasing.
Job growth draws in new workers,
But they are less skilled.

This paper examines the relationship between firm multifactor productivity growth (mfp) and changing skill levels of labour in…

Long Run Trends in New Zealand Industry Assistance

Author: Ralph Lattimore

Working Paper

New Zealand has had a complex process of adjusting commercial policy since the economic reforms began in 1984. This paper reports on the results of a research project to estimate the trends in industry assistance over this…

Over the Hedge: Do Exporters Practice Selective Hedging?

Authors: Arthur Grimes | Richard Fabling

Working Paper

What determines exporters" exchange rate hedging decisions and do exporters attempt to "time the market"? We use a unique unit record longitudinal administrative dataset on firm exports to find the determinants of exporters" currency hedging…

The Effects of Occupational Safety and Health Interventions

Authors: Dave Maré | Kerry Papps

Other

This study examines the effectiveness of government legislation in reducing the incidence of workplace accidents and other health and safety risks in New Zealand. A simple model of the relationship between firms and the Occupational…

Wages, Employment, Labour Turnover and the Accessibility of Local Labour Markets

Authors: Kerry Papps | Jacques Poot | Philip Morrison

Article

In this paper, we extend a dynamic efficiency wage model to the case of multiple local labour markets that interact through migration.

Firms are concerned about turnover costs. The quitting behaviour of workers is a function…

Local Job Flows in New Zealand

Authors: Dave Maré | Jason Timmins

Article

Small changes in the level of employment are generally the result of a large number of jobs being created and a roughly balancing number of jobs being destroyed In this paper we examine patterns of…

The Annual Employment Mix of Workers and Firms, and the Part-Time Earnings Gap in New Zealand

Authors: Dave Maré | Dean Hyslop

Article

In this paper we document patterns of annual employment across jobs, workers and firms, and examine the relationship between these patterns and job-level earnings rates using data from Statistics New Zealand's Linked Employer-Employee Database (LEED).

First,…

Heterogeneous Firm Responses to Rising Teenage Wages

Authors: Dave Maré | Dean Hyslop | Jason Timmins | Steven Stillman

Article

Substantial youth minimum wage changes in New Zealand between 2000 and 2007 raised teenage average wages by 5-10 per cent relative to those for adults.

We use Statistics New Zealand's Linked Employer-Employee Database (LEED) to examine…

Spatial Effects of ‘Mill’ Closures: Does Distance Matter?

Authors: Arthur Grimes | Chris Young

Article

When small towns experience a major infrastructure shock, such as a "mill' closure, the effects can be devastating.

We analyse the effects of two major freezing works closures in New Zealand, in Patea (1982) and Whakatu…

Why Do Big Firms Pay Higher Wages? Evidence from an International Database

Author: Steven Stillman

Article

Bigger firms pay higher wages. This note reports tests of the hypothesis that this big-firm premium (BFP) occurs because workers in big firms are more skilled.

We use the International Adult Literacy Survey, which gives richer…

The Relatives are Fine: Use of Qualitative Firm Data in Economic Analysis

Authors: Arthur Grimes | Richard Fabling | Philip Stevens

Article

We use qualitative and quantitative data for the same firms to examine the robustness of firms' qualitative responses regarding their performance.

In contrast to some prior studies, firms accurately respond to qualitative questions regarding productivity and…

Whatever Next? Export Market Choices of New Zealand Firms

Authors: Arthur Grimes | Lynda Sanderson | Richard Fabling

Article

We examine product and market entry choices of New Zealand exporters, using enterprise-level data on firm performance and merchandise trade.

For firms already exporting, we ask: What determines their choices about what and where to export?…

Foreign Acquisition and the Performance of New Zealand Firms

Authors: Lynda Sanderson | Richard Fabling

Article

This paper examines the firm-level determinants of foreign acquisitions of New Zealand companies, and the consequences for both purchased firms and the workers within those firms.

We follow a combined propensity score matching and difference-in-difference approach…

Returning to Work from Injury: Longitudinal Evidence on Employment and Earnings

Authors: Dean Hyslop | Steven Stillman | Sarah Crichton

Article

New Zealand has a unique accident insurance system that pays the direct costs of all injuries and compensates workers up to 80% of their earnings for any time that they are unable to work.

To estimate…

The Retirement Expectations of Middle-Aged Individuals

Authors: Deborah Cobb-Clark | Steven Stillman

Article

We use HILDA data to examine the retirement plans of middle-aged Australians.

We find that approximately two-thirds of men and more than half of women report a numeric expected retirement age which we refer to as…

An Analysis of New Zealand’s Business Demography Database

Authors: Dave Maré | Dean Hyslop | Jason Timmins | Julian Wood | Nick Carroll

Article

Given that a future linked employer-employee database may use Business Demography data as a backbone:

What are the basic qualities of this dataset?
What are the observed patterns in job creation and destruction in New Zealand?
What are…

Examining Benefit-to-Work Transactions Using Statistics New Zealand’s Linked Employer-Employee Data

Authors: Dean Hyslop | Steven Stillman

Working Paper

This was produced as a LEED Research Report for Statistics New Zealand

Statistics New Zealand's Linked Employer-Employee Data (LEED) contains monthly information on taxable benefit receipt and earnings for all New Zealanders over a five-plus-year period. There is…

The Impact of Immigration and Local Workforce Characteristics on Innovation

Authors: Dave Maré | Richard Fabling | Steven Stillman

Working Paper

Produced as the Economic Impacts of Immigration Working Paper for the New Zealand Department of Labour.

We combine firm-level microdata on innovation with area-level workforce characteristics to examine the relationship between local workforce characteristics, especially the…

Cyclical Earnings Variation and the Composition of Employment

Authors: Dave Maré | Dean Hyslop

Working Paper

This paper was commissioned as part of the LEED Research Report by Statistics New Zealand

This paper uses Statistics New Zealand"s Linked Employer-Employee Database (LEED) to assess the extent and impact of such changes in the…

Job Employment Intensity, Matching, and Earnings 1999-2005

Authors: Dave Maré | Dean Hyslop

Working Paper

This was commissioned as a LEED Research Report by Statistics New Zealand

In this paper, we exploit the worker-firm "link" information in the Linked Employer-Employee Database (LEED) to describe the patterns of employment intensity in jobs, matching between…

An Analysis of Teenage Employment by Firms: 1999/00-2006/07

Authors: Dave Maré | Dean Hyslop | Jason Timmins | Steven Stillman

Working Paper

Produced for Statistics New Zealand as the LEED Research Report.

Changes to youth minimum wage legislation in New Zealand together with steady increases in minimum wages since 2001 have contributed to substantial increases in the minimum wages…

The ‘Suite’ Smell of Success: Complementary Personnel Practices and Firm Performance

Authors: Arthur Grimes | Richard Fabling

Working Paper

Produced for the Reserve Bank of New Zealand as Reserve Bank of New Zealand Discussion Paper DP2009/13

How do personnel practices affect firm performance?

To examine this issue we use a panel of over 1,500 New Zealand firms, drawn from…

The Costs of Involuntary Job Loss: Impacts on Workers’ Employment and Earnings

Authors: Dave Maré | Sylvia Dixon

Working Paper

This paper was produced as a MBIE Research Paper for the Ministry of Business, Innovation and Employment

This paper examines the incidence of involuntary job loss and its impact on the employment and earnings of affected workers, using…

The Impact of Firm Closure on Workers’ Future Employment and Earnings

Authors: Sylvia Dixon | Steven Stillman

Working Paper

This paper was produced on behalf of Statistics New Zealand for the LEED Research Report.

This paper examines the impact of job loss due to firm closure on workers' employment and earnings.

It uses data from Statistics…

Earnings and Employment in Foreign-owned Firms

Authors: Dave Maré | Lynda Sanderson | Richard Fabling

Working Paper

This paper examines remuneration and labour mobility patterns among workers in foreign-owned firms operating in New Zealand.

By tracking workers as they move across jobs in different types of firms, we document the extent of the…

The Incidence and Persistence of Cyclical Job Loss in New Zealand

Authors: Dave Maré | Richard Fabling

Working Paper

In New Zealand, the impact of the 2007-2008 Global Financial Crisis (GFC) was milder than in most other developed countries, though still substantial, with employment declining by 2.5 percent between the fourth quarter of 2008…

The Impact of Wage Subsidies on Jobseekers’ Outcomes and Firm Employment

Authors: Dave Maré | Sarah Crichton

Working Paper

The study examines the impact of wage subsidies on assisted job-seekers and on the firms that employ them, using propensity matching methods.

Overall we find that starting a subsidised job leads to significant employment and earning…

Firm-Level Hiring Difficulties: Persistence, Business Cycle and Local Labour Market Influences

Authors: Dave Maré | Richard Fabling

Working Paper

The Relationship between Individual Labour Market Outcomes, Household Income and Expenditure, and Inequality and Poverty in New Zealand from 1983 to 2003

Authors: Dave Maré | Dean Hyslop | Trinh Le | Steven Stillman

Working Paper

This paper investigates the relationship between individual labour market outcomes, household income and expenditure, and inequality and poverty in New Zealand using detailed data from the 1983/84 - 2003/04 Household Economic Survey (HES).

We begin by…

Labour Market Outcomes for Young Graduates: Part A: Main Report and Part B: Field of Study Profiles

Authors: Dave Maré | Yun Liang

Working Paper

This paper examines income and employment outcomes for 18 to 30 year old New Zealanders with post-school qualifications, using data from the 1996 and 2001 Censi.

Outcomes are analysed by field of study, to highlight the variation in outcomes…

What Do Endogenous Growth Models Contribute?

Author: Dave Maré

Working Paper

Endogenous growth theory is one of the mainstream economics approaches to modelling economic growth. This paper provides a non-technical overview of some key strands of the endogenous growth theory (EGT) literature, providing references to key…

Understanding New Zealand’s Changing Income Distribution 1983-98: A Semiparametric Analysis

Authors: Dave Maré | Dean Hyslop

Working Paper

This paper analyses changes in the distribution of equivalised gross household income and income inequality in New Zealand between 1983 and 1998.

We analyse the distributional effects of changes in household structure, National Superannuation (old age…

Are Patent Fees Effective at Weeding Out Low-Quality Patents?

Authors: Adam Jaffe | Gatan de Rassenfosse

Working Paper

The paper investigates whether patent fees are an effective mechanism to deter the filing of low-quality patent applications.

The study analyzes the effect of the Patent Law Amendment Act of 1982, which resulted in a substantial…