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HK's labour market 21 September 2005 香港特別行政區政府 Hong Kong SAR Government.

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Presentation on theme: "HK's labour market 21 September 2005 香港特別行政區政府 Hong Kong SAR Government."— Presentation transcript:

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2 HK's labour market 21 September 2005 香港特別行政區政府 Hong Kong SAR Government

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4 3 Several angles Manpower resource balance – skill mismatch? – job mismatch? Long-term unemployment rate on the rise? Pace of employment growth in current upturn, c.f. average cycle in the 1980s and 1990s Major shifts in Phillips curve over time ?

5 4 I. Manpower resource balance

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9 8 II. Long-term unemployment rate on the rise ?

10 9 Q1Q3Q1Q3Q1Q3Q1Q3Q1Q3Q1Q3Q1Q3Q1Q3Q % % Long-term unemployment rising disproportionately during downturn; yet also falling back distinctly during upturn Long-term unemployment rate (left scale) Overall unemployment rate (right scale)

11 10 Improvement in long-term unemployment in latest upturn is across-the-board Q2Q4Q2Q4Q2Q4Q2Q4Q2Q4Q2Q4Q2Q4Q2Q4Q2Q4Q Percent Manufacturing Construction Wholesale, retail, import/export, restaurants and hotels Transport, storage and communications Financing, insurance, real estate and business services

12 11 III. Slow-down in pace of employment upturn after 98?

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14 13 Job losses in manufacturing vs job gains in service sectors Change in employment Between 1990 and 1996 Between 1997 and 2003 trough Between 2003 trough and 05 H1 (‘000) Manufacturing Construction Services Wholesale/retail trade Import/export trade Restaurants/hotels Transport, storage and communications6327 Financing-158 Insurance8884 Real estate1711 Business services57528 Community, social and personal services Total Job losses Job gains

15 14 Average change in employment (% per annum) Between 1990 and 1996 Between 1997 and 2003 trough Between 2003 trough and 2005 H1 Manufacturing Construction Wholesale/retail, restaurants and hotels Services ex wholesale/retail, restaurants and hotels of which: Trade-related Total employment c.f. Domestic exports PCE Construction Exports of goods and services GDP

16 15 % change in employment per % change in output Between 1990 and 1996 Between 2003 trough and 2005 H1 Manufacturing Wholesale/retail, restaurants and hotels Services ex PCE–related sectors of which: Trade-related Overall

17 16 IV. HK’s Phillips curve

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19 18 Discussion: How much more can unemployment improve further? Cyclical vs structural part of unemployment? Shifts in long-run Phillips curve and nairu? S tructural factors/rigidities: Increasing job/skill mismatch ? Wage inflexibility? Labour legislation? Ageing? Welfare policy? High public transport fare & public housing policy? Increasing barriers to businesses and/or less entrepreneurship?

20 19 Thank you

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27 26 Correlation with output gap

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34 33 Value added per person (‘000) Manufacturing Services W/R, I/E and R/H Transport, storage and communication Financing, insurance, real estate and business services Community, social and personal services Economy average306373

35 34 % change in employment per % change in GDP Trough2 years after trough Peak-to-Peak 1987 – Average: 0.36


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