Research shows success of 90 day trial periods

NZIER have released research into the 90 day trial periods. What they did is:

Data are now available to analyse these impacts in the policy’s first several months in operation.¹ NZIER has conducted an initial analysis of the publicly available data from Statistics New Zealand’s Linked Employer-Employee Database (LEED), including April 2009 to September 2009. Our analysis assessed year-over-year changes in total jobs, accessions (hirings), and separations (firings) from 2005 to 2009 for six size categories of employers in 17 industries. The analysis controlled for seasonal variation in employment by identifying second and third quarter figures separately. Simple regression models² were estimated for the three employment variables. The models also included a variable indicating whether the trial period was in effect for the time period and firm size. The regressions used are a simple analytical technique; more complex models may be able to estimate the policy’s impact more precisely.

So this is an analysis of actual employer data from Stats NZ. So what did they find:

• The trial period appears to have increased hiring. On average, hiring by SMEs was almost six percentage points higher than expected, given the relative performance of other firms and the annual hiring trends.
• Total job numbers for these firms were also higher, by about two percentage points.
• These positive employment outcomes happened while hiring overall was falling. The model found that hirings fell on average in 2008 and 2009.
• There was little difference in hiring behaviours across industries.

A 6% improvement in hiring and a 2% improvement in job numbers are good outcomes. The extension of the 90 day trial period to all employers is a good thing.