Auckland University of Technology (AUT), Faculty of Business, Economics and Law, Auckland
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 higherskilled 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.
Skills Economic Crises Wage progression PIAAC administrative data