Job creation and destruction in Taiwan

Research Doctorate - Doctor of Philosophy (PhD)This thesis explores the behaviour of job flows in Taiwan. The investigation of the behaviour of job creation and destruction has improved our understanding of the dynamics of the Taiwanese labour market and also has important implications in terms of economic research and policymaking. Chapter 2 discusses the basic features of the overall post-war Taiwanese economy. We find that large flows of workers enter and exit the employment pool. The large worker flows offer an interesting insight about the job flow dynamics. Based on the measures proposed in Chapter 3, Chapter 4 carefully examines the so-called small business job creation hypothesis. We find that small business can be viewed as the engine of job creation. However, small business is not the source of sustained increases in employment. Chapter 5 documents the basic features of job creation and destruction. We find that job creation is more volatile than job destruction in the manufacturing and service sectors, but reveals the opposite pattern in the construction sector. Based on the methodologies outlined in Chapter 6, Chapter 7 investigates the regime switching and asymmetric behaviour of job creation and destruction. We find that the interest rate can help to explain the asymmetric behaviour of job creation and destruction rates in all sectors. Furthermore, we find an interesting feature that a lower interest rate stimulated beneficial regime shifts in job flows. Chapter 8 explores the similarities and differences of regional business cycles by reference to the employment growth rate as well as job creation and destruction rates. We find that the regime switching behaviour of employment growth was similar across the North, Central and South regions. However, behaviour in the East Region was dramatically different. Furthermore, the regime switching behaviour of the common regional business cycle (specified in terms of employment growth) is consistent with the business cycle indicator proposed by Council for Economic Planning and Development (CEPD)