Hong Kong falls into recession; Australia faces teacher shortage

Hong Kong falls into recession; Australia faces teacher shortage

Today’s global news summary brings news affecting Hong Kong, Australia, and the globe and discusses issues as diverse as recession, teacher shortage, and happiness.  

Hong Kong slipped into recession
Labor markets and institutions
Hong Kong’s economy has shrunk by a second consecutive quarter dropping it into recession, reports Aljazeera. Further pressures are expected by analysts unless borders with mainland China and the rest of the world can be fully re-opened. Rising interest rates and weakened global trade are also adding to Hong Kong’s financial woes. The Census and Statistics Department reported a 3.9% decrease in GDP in the first quarter of 2022 followed by a further 1.4% in the second quarter. Quarantine-free travel between Hong Kong and mainland China is yet to have a clear timetable under Beijing’s strict zero Covid-19 policy. Hong Kong still has some of the world’s strictest restrictions, including a week-long quarantine for arrivals and a ban on group gatherings of more than four people.

“Designing the optimal response to a negative shock requires a deep understanding of the mechanisms through which the economy and, in particular, its labor market operates,” writes Edward P. Lazear for IZA World of Labor

Related content
IZA World of Labor articles

Structural or cyclic? Labor markets in recessions 
Do youths graduating in a recession incur permanent losses?
The relationship between recessions and health
The effects of recessions on family formation

Key topics
How should governments manage recessions?

Fighting a coronavirus recession
Job search during a pandemic recession
Health effects of the coronavirus recession

Effects of entering adulthood during a recession

IZA discussion papers
From Mancession to Shecession: Women's Employment in Regular and Pandemic Recessions
Sweden's COVID-19 Recession: How Foreign and Domestic Infections Struck against Firms and Workers

Australia’s federal government considers large pay rises for teachers
Education and human capital
ABC News reports that the Australian federal government is considering massive pay rises for some teachers, while paying people to retrain in order to counteract teacher shortages. So-called “master teachers” and senior teaching positions could be awarded a 40% wage boost. While growing numbers of children are attending school, fewer people are training to become teachers. Paid teaching internships are also to be considered for those from other industries who are completing a two-year master’s degree in education. Australian Education Union deputy president Meredith Peace believes a wage rise for all teachers, not just those in senior positions, would be fairer. “This is a much more complex issue than that. We need proper career structures that reward high performing teachers who want to stay in the classroom,” she says. “We need to provide decent salaries across the board.” 

Scott A. Imberman asks how effective financial incentives are for teachers, in his IZA World of Labor article. He says “Linking teacher pay to student performance has become popular, but evidence on its effectiveness is mixed."

Related content
IZA World of Labor articles
How effective are financial incentives for teachers?
Understanding teacher effectiveness to raise pupil attainment
Class size: Does it matter for student achievement?

Key topics
Education and labor policy

Tutoring: An effective solution to help disadvantaged children
Pandemics and the prospects for higher education in developing countries

Brian Cadena - Mitigating the negative implications of impatience
Is the return to education the same for everyone

IZA Discussion Papers
Preferences, Selection, and the Structure of Teacher Pay
Age of Starting School, Academic Performance, and the Impact of Non-Compliance: An Experiment within an Experiment, Evidence from Australia

The money required to lead a happy life is less than you might think
Behavioral and personnel economics
Quartz reports on a recent study published by the journal Nature Sustainability which surveyed people from around the world about the amount of wealth required to live an ideal life. Participants were asked to choose the prize they’d hope to win in a lottery from $10,000 to $100 billion—unlimited wealth. The results of the study suggest people don’t think they need unlimited wealth to be happy. The majority selected $1 million or $10 million. Paul Bain, co-author of the paper says “Discovering that most people’s ideal lives are actually quite moderate could make it socially easier for people to behave in ways that are more aligned with what makes them genuinely happy and to support stronger policies to help safeguard the planet.” 

“People who are unable to maintain the same standard of living as others around them experience a sense of relative deprivation that has been shown to reduce feelings of well-being,” says Xi Chen in his IZA World of Labor article. 

Related content
IZA World of Labor articles 

Relative deprivation and individual well-being
The happiness gap between transition and non-transition countries
Can “happiness data” help evaluate economic policies?
Happiness as a guide to labor market policy

Key topics
Health, well-being, and happiness in the labor market

Are happy workers more productive?
The unhappiness of the US working class

IZA Discussion Papers
A Happy Choice: Wellbeing as the Goal of Government
Why Does Happiness Respond Differently to an Increase vs. Decrease in Income?