How does macroeconomic expectations of managers and employees affect labor market outcomes?

Firms are randomized into four groups of approximately equal size. The three groups receive the following information, respectively. Note that Group 0 (control) does not receive any information.

Group 0 (Control): No information

Group 1 (Mean treatment): Before we proceed, we would like to give you information from a group of leading experts about the economy. The average prediction among professional forecasters is that the inflation rate in New Zealand for 2025 will be 2.2%.

Group 2 (Uncertainty treatment): Before we proceed, we would like to give you information from a group of leading experts about the economy. These professional forecasters largely agree about the inflation outlook for the New Zealand economy. The difference between their lowest and highest inflation rate for 2025 is only 0.8 percentage points.

Group 3 (Industry wage treatment): Before we proceed, we would like to give you information about changes in average wages in your industry. According to official statistics, the change in average wages in your sector XXX was X.X percentage over the last 12 months. {For XXX and X.X, use information from salary and wage rates by industry below}

Salary and wage rates by industry
Percentage change from same quarter of previous year
Subsector Q4 2024 (%)
CC1 Food, beverage, and tobacco product manufacturing 4.0
CC2 Textile, leather, clothing, and footwear manufacturing 2.6
CC3 Wood and paper products manufacturing 3.2
CC4 Printing 1.7
CC5 Petroleum, chemical, polymer, and rubber prod manufacturing 3.0
CC6 Non-metallic mineral product manufacturing 2.3
CC7 Metal product manufacturing 1.9
CC8 Transport equipment, machinery, and equipment manufacturing 3.5
CC9 Furniture and other manufacturing 2.5
EE Construction 2.6
FF Wholesale trade 2.1
GH1 Retail trade 2.2
GH2 Accommodation and food services 2.9
GH Retail trade and accommodation 2.4
II Transport, postal, and warehousing 3.0
JJ Information media and telecommunications 3.7
KK Financial and insurance services 2.7
LL Rental, hiring, and real estate services 2.3
MN1 Professional, scientific, and technical services 2.4
MN2 Administrative and support services 3.2
MN Prof, science, tech, admin, and support services 2.6

Workers are also randomized into four groups of approximately equal size. The three groups receive the treatment information – groups 1-3, respectively. The control of workers (Group 0) does not receive any information.

2025-06-02

2026-05-29

1. Expectations. Macroeconomic and wage expectations of firm managers and employees from survey waves 1 and 2.
2. Decisions. Firm's key decisions on prices, employment, investment and wages from waves 1 and 2. Also includes employees key decisions (hours of work, hours job search, and wage changes).
3. Hypotheticals about new hires (wage of new hire, time for hiring, and cost of hiring) and reservation wages from waves 1 and 2.
4. Match-specific responses between firm managers and employees on retention wage, lowest wage acceptance before quitting, employee’s value added, wage change (size an duration), and probability of individual employee continuing the job.
4. Expectations and labor market outcomes of employees who continue their job, quitted their job or was laid off. Much of the outcomes are achieved in wave 2.

We ran two waves of a survey of firm managers and their employees in New Zealand. The first wave of the survey was between June and December 2025. The second wave was between December 2025 to May 2026. We conducted the survey through New Zealand Market Research and Surveys Limited, which is a private limited company specializing in conducting surveys. Following the Australia and New Zealand Standard Industrial Classification 2006 (ANZSIC06), firms are classified into two broad industries: manufacturing and services. The latter included firms from sectors such as professional and financial services, trade, construction, communication and transportation. Firms are recruited according to their size (at least three employees) and annual turnover of at least $30,000.

The survey is conducted primarily through phone. The randomly controlled trial takes place in the main wave. Firm managers and employees are randomly assigned into four groups of approximately equal size. The first group of firms are referred as the control group. The second, third and fourth groups of firms are referred as the treatment groups. The treatment groups get new information about the future inflation outlook or industry wages. We will assess how the treatment information affects the expectations (inflation, real GDP growth, firm sales, and industry wages) and decisions of firm managers and employees.

Randomization done in office by a computer

Firms and workers

No

2726 Firms

2726 firms 4375 employees

Control group (group 0) for firms 684
Mean treatment (group 1) for firms 677
Uncertainty treatment (group 2) for firms 679
Wage treatment (group 3) for firms 686

Control group (group 0) for employees 1099
Mean treatment (group 1) for employees 1099
Uncertainty treatment (group 2) for firms 1092
Wage treatment (group 3) for firms 1085