labour at each skill level, less the number of indigenous and expatriate employees retained from the preceding period.
It is assumed that a minimum proportion of expatriates employed at each skill level in the previous year are
retained. These minimum proportions are set out in Table 7.1. As explained in Section 7.3 below, the actual proportion
retained may be higher if there are not sufficient suitable indigenous wage job seekers to fill job opportunities,
especially at the higher skill levels.
Table 7.1; Minimum proportions of
expatriates retained over any annual interval
Skill level Proportion
Unskilled 0.20
Skilled 0.50
Sub-professional 0.67
Professional 0.75
The number of indigenous employees retained at each skill level is derived from the retirement rates which differ for employees in each age and sex employed
at various skill levels. Allowance is also made for two alternative methods for the promotion of indigenous
The first type of promotion, concerning experienced employees irrespective of formal qualifications, was
commonly followed in the early years of the projection leading up to independence in 1975. There continues to be strong
political and economic pressure for rapid localisation of the upper level jobs in the modern sectors despite the shortage of indigenous personnel with higher formal educational qualifications. It is assumed that such promotions occur at the rates presented in Table 7.2. The rates of promotion are allowed to decline over time
Table 7.2: Proportions of indigenous employees promoted annually
Promotions Percentage
1966 1986-2006
unskilled to skilled 1.80 0.10
skilled to sub-professional 4.00 0.10
sub-professional to professional 2.50 0.15 Note: a linear rate of decline is assumed in each case from 1966 to 1986 .
as the number of Papua New Guineans with higher qualifications increases relative to the growth of job opportunities at
higher skill levels. The settings for 1966 to 1971 have been chosen so that (when combined with the pattern of retirements and employers' preferences for recruitment) projections by the model correspond to the changes in the composition of wage employment by race and education observed over that period.'*'
1 Information regarding these changes is available in (unpublished) data on employment gathered annually by the Papua New Guinea Department of Labour and Industry. The patterns of change generated in the basic projection by the model are shown in Chart 11.11.
The second type of promotion concerns those persons whose educational qualification makes them eligible for jobs
at some higher (e.g., professional) skill level, but who were forced into lower level positions in some previous
year when there was an excess supply. It is assumed that any
such persons are promoted to higher skill levels in any subsequent year when the number of vacancies at this level exceeds the number of indigenous job seekers with suitable qualifications.
When provision is made for promotion across skill levels, the number of job opportunities to be filled on any level depends on the pattern of recruitment at higher levels, described in the following section.
Section 7.3: Recruitment by skill levels
This section describes how wage job seekers with
various characteristics are recruited to fill job opportunities according to employers' preferences for hiring persons with
different age, sex and educational qualifications. Vacancies
are filled by taking each skill level in turn, starting with professional positions.
A simple way to allow for employers' preferences in a simulation model would be to assign different places in the queue for employment to persons with different
characteristics, so that members of some groups were always
selected ahead of members of other groups: for example all
male job seekers ahead of any women, or all university
graduates to be hired before graduates from other institutions
were considered. Such selection criteria were felt to
be unrealistic. The submodel to allocate job opportunities,
designed for this study, makes provision for employers preferences to be expressed in a less absolute manner.
Employers are assumed to follow a preferred composition of their new intakes in each year as closely as possible, given the composition of job seekers by age, sex and educational qualifications. The desired composition is expressed in terms of a set of parameters z(a,s,e),
such that:
o<z(a,s,e)^l for all groups; and
E z (a, s ,e)
a , s , e 1
(7.1)
The use of these parameters is illustrated by
the following numerical example. Suppose that there are six groups of applicants for professional positions: the
assumed numbers of job seekers are shown in column 1 of
Table 7.3. The second column shows the preferred composition of recruits in any year, expressed in terms of z-parameters.
The zero preference parameters assigned to primary school leavers indicates that such persons are not considered eligible for professional positions.
Columns 3 to 5 show three examples of the pattern of recruitment depending on the number of vacancies to be filled. In the first example, the number of vacancies to be filled exceeds the total number of wage job seekers considered eligible. All eligible candidates are then hired irrespective of employers' preferences, and the remaining vacancies are filled by expatriates. In the other examples, the number of eligible job seekers exceeds the number of vacancies: in these situations jobs are
filled so as to reflect employers' preferences as closely as possible, provided none of the groups are exhausted.
If there were sufficient candidates in each of