Constructing the job-finding rate and separation rate of Hong Kong labour market
This paper is revised from the first chapter of Bin Wang’s PhD thesis. We thank the editor Professor David Cook and one anonymous referee for their helpful comments. All errors are our own. Partial funding from Research Center for the Industrial Development of Guangdong and its Regional Cooperation with Hong Kong, Macau and Taiwan is acknowleged.
Abstract
This paper constructs two essential time series of the aggregate labour market in Hong Kong: the job-finding rate and the separation rate. The average job-finding rate per month is 27.54% while the average separation rate per month is 1.29%. These numbers are similar to those for Nordic and Anglo-Saxon countries. Variance decomposition shows that the separation rate contributes to more than half the variation of the unemployment rate.
