Effects of economic performance and immigration on youth unemployment: The Hong Kong experience

Abstract

The main purpose of this study is to examine the relationship between new arrivals from the mainland of China holding one-way permit holders (OWPH), inflation, gross domestic product (GDP) and youth unemployment. This study covered the quarterly data from the first quarter of 1982 to the second quarter of 2009. The youth unemployment in the Hong Kong is the level of unemployment among young people typically measured as those aged 15-19. From the second quarter of 2009, the unemployment rate of young people rose to 24.3%. Hong Kong is expected to undergo a continuous economic slowdown and a shrinking labour market under the financial crisis. Young people, especially those with low educational attainment, low levels of skill and those continuously unemployed, will find it even harder to secure a job. To find a way and offer them support so that they will not be marginalized in the labour market is one of our major concerns. This paper found that the Johansen test result reveals that the variables are cointegrated and the ordinary least squares estimator suggest that inflation and GDP are closely related to youth unemployment in Hong Kong. Also, the ordinary least squares test reveals that we may not conclude that the OWPH are related to the youth unemployment in Hong Kong.