Change in economic structure means more people take longer to find work
Profound changes in Hong Kong's economic structure mean the 'natural rate' of unemployment - the number of people between jobs when the economy is operating at full capacity - has doubled in the past 15 years, monetary chiefs say.
Research by the Hong Kong Monetary Authority, released yesterday, said the natural rate of unemployment had risen from between 2 and 3 per cent in the late 1980s to between 3.5 and 4.5 per cent now.
An economist warned that the increase could add to welfare expenditure.
The natural rate of unemployment is based on the time within which a job seeker can reasonably expect to find work. Since people are always moving between jobs, the rate of unemployment can never be zero.
The rise in the natural rate of unemployment means Hong Kong can be said to have attained full employment if the actual unemployment rate drops to 4.5 per cent. Hong Kong's actual unemployment rate stood at 7.1 per cent in April.
The report attributed the increase to the 'profound structural change' in the economy, with the services sector taking over from manufacturing as the main source of jobs.
