Q + A with Alexander Plum
Dr Alexander Plum joined NZWRI in 2017 as a Research Fellow and in 2019 was promoted to Senior Research Fellow. When asking Alex to fill in the blanks: "Economics is ___, ___, and ___", here's what he said:
Economics is a multi-disciplinary science, all about understanding human behaviour, and an effective academic tool that helps us identify social means to promote people's wellbeing.
(1) When and why did you decide that you wanted a career in economics?
During my childhood, I was fortunate to have a few people in my life (especially my mother) who had a strong intellectual impact on me. Among several valuable lessons I learned, one that had quite a profound impact was the belief that, for an intuitive understanding of human behaviour, one must account for the economic circumstances people live in. By my teenage years, I was eager to learn about economic relationships and the evolution of the modern welfare state. As nerdy as it sounds, it was clear to me that a comprehensive economic understanding can only be accomplished by self-conducted research at the university-level. Looking back, I am pretty surprised and grateful that it actually worked out.
(2) Describe one of your recent research projects.
A substantial area of my research deals with labour market trajectories, especially that of the low paid employed population. In one of my recent co-authored studies, we identified how time spent in low pay employment affects individuals’ likelihood to move up in the pay distribution. Though it sounds simple, disentangling the economic determinants of individuals’ labour market dynamics is far from straightforward. To analyse how individuals perform in the labour market, Statistics New Zealand’s Integrated Data Infrastructure (IDI) offers an ideal research opportunity as it provides high-frequency detailed information on people’s labour market outcomes. On a global scale, this type of data infrastructure is scarce and can only be found in very few countries.
(3) Describe the key results/main findings.
For the NZ labour market, we find that the effect of low pay employment on future earnings prospects is heterogeneous. However, for those individuals who spend a major portion of their time per year working in the low pay sector, persistence in low paid employment appears to be high, with little pecuniary changes. In the majority of cases, our current conclusion is that low pay does not work as a stepping stone to higher-paid jobs.
(4) What makes this research impactful?
These findings have important economic implications when it comes to the design of a welfare state. Working on a low wage often constrains an individual’s access to an adequate quality of life (defined by consumption, access to health care, and mobility). In this context, if low paid employment is a persistent labour market phenomenon, as we observe in our study, there lies substantial scope for social intervention (such as upskilling strategies) to facilitate wage mobility among groups of workers who have a strong attachment to the labour market but have little chances of leaving the rank of low paid employment.
(5) What do you enjoy doing in your spare time?
My spare time is almost completely occupied by my family. I have a two-year-old son, and we enjoy going on long walks and often go out on trips and adventures. Besides that, we recently moved into a new house, so my partner and I spend the rest of our spare time renovating the property.