Institut für Arbeitsmarkt- und Berufsforschung

The gender gap of returns on education across West European countries

We study the returns on education in Europe in a comparative perspective. We extend the model of de la Fuente [(2003). Human Capital in a Global and Knowledgebased Economy. part II: Assessment at the EU Country Level. Report for the European Commission], by estimating the values of the relevant parameters for men and women and introducing several variables specifically related to maternity leaves and benefits. As a preliminary step, we evaluate the effect of education on the wage profile. We estimate the Mincerian coefficients for 12 West European countries using the EU-SILC data for 2007 and use them as input in the optimisation problem of the individual to calibrate the model. Finally, we analyse the impact and relevance of several public policy variables. In particular, we evaluate the elasticities of the returns on education with respect to unemployment benefits, marginal and average tax rates, maternity leaves and childcare benefits.

IAB-Discussion Paper 20/2011

Trade liberalisation, technical change and skill-specific unemployment

Do small labor market entry cohorts reduce unemployment?

In this paper we study the effect of small labor market entry cohorts on (un)employment in Western Germany. From a theoretical point of view, decreasing cohort sizes may on the one hand reduce unemployment due to “inverse cohort crowding” or on the other hand increase unemployment if companies reduce jobs disproportionately. Consequently, the actual effect of cohort shrinking on (un)employment is an empirical question. We analyze the relationship between (un)employment and cohort sizes using a long panel of Western German labor market regions.

IAB-Discussion Paper 18/2011

The outcome of coaching and training for self-employment

This paper focuses on the question of whether improving the competence of new business founders by means of coaching and training programs enhances the dura-tion of self-employment. In the analysis the autors focus on support activities that are pro-vided in addition to a financial subsidy and which mainly focus on providing external expertise for founders who started a business from a position of unemployment. They find that the inflow into the related schemes is strongly determined by regional pat-terns and time while individual characteristics are less important. This reflects a par-ticular regional specialization in the set-up of the promotion of self-employment. A statistical matching approach is used to control for selectivity and is performed in a way that explicitly takes into account differences across regions and over time. The results show that treatment effects tend to be insignificant in statistical and economic terms. They also find evidence that external expertise reduces the duration of self-employment.

IAB-Discussion Paper 16/2011

Lone mothers' participation in labor market programs for means-tested benefit recipients in Germany

This paper examines participation in labor market programs such as job subsidies, workfare, and training programs by lone mothers receiving means-tested unemployment benefits in Germany. Since the 2005 Hartz IV labor market policy reforms, expectations that non-employed parents responsible for caring for young children should be ready for employment or labor market program participation have grown stronger.

IAB-Discussion Paper 14/2011

Do Changing Institutional Settings Matter?

Cross-sectional studies show that in West Germany women with different levels of educational attainment participate differently in the labor market. In this paper, I examine one potential underlying mechanism: the re-entry of mothers in the labor market after a period of inactivity. I argue that besides societal changes the reforms of parental leave legislation could be responsible for the educational divide in mothers' employment.

IAB-Discussion Paper 13/2011

Low-wage jobs - stepping stones or just bad signals?

This study investigates how the effects of low-wage employment and non-employment on wage prospects vary depending on qualification. The author apply dynamic multinomial logit models with random effects and include interactions of the lagged labor market state with qualification to estimate heterogeneity in state dependence.

IAB-Discussion Paper 11/2011

Labor market integration of foreigners

Contrary to the widespread procedure of seeing migrants as deficient actors and of putting their integration difficulties into the forefront, the perspective in this book has been readjusted and concentrates on the potential that immigration offers. Migration – and the cultural diversity induced by it – means that people with new ideas, experiences and strategies for solving problems are coming to Germany. If one knows how to harness this potential within economic processes then immigration can stimulate economic growth and thus send out positive impulses to the labour market.

The volume 327 from the series IAB-Bibliothek is available in bookstores or direktly in our IAB webshop.

Abstract and further information can be found on our website.

Start-ups by migrants: A path towards economic and social integration

In comparison to other countries, there are not many start-ups in Germany. This is shown by the "Global Entrepreneurship Monitor" (GEM) of 2010 which thus also confirms earlier results. What is remarkable is that migrants tend to set up their own businesses more often than local people. In doing so, they have specific advantages. For example it is tendentially easier for them to export their products and services. In addition there are signs that they have more role models than local start-up entrepreneurs. However there is also indication that start-ups by migrants are often a reaction to their comparatively poor chances on the labour market.

IAB Brief Report 8/2011

Executive summery of the GEM Country Report Germany 2010

A new targeting - a new take-up?

The authors present first estimates of rates of non-take-up for social assistance in Germany after the implementation of major social policy reforms in 2005. The analysis is based on a microsimulation model, which includes a detailed description of the German social assistance programme. Their findings suggest a moderate decrease in non-take-up compared to estimates before the reform. In order to identify the determinants of claiming social assistance, the authors estimate a model of take-up behaviour which considers potential endogeneity of the benefit level. The estimations reveal that the degree of needs, measured as the social assistance benefit level a household is eligible for, and the expected duration of eligibility are the key determinants of the take-up decision, while costs of claiming seem to play a minor role.

IAB-Discussion Paper 10/2011

New issue of the Journal for Labour Market Research

The current issue of the journal (Vol. 43, No. 4) contains among others the following articles:

• Heterogeneity in the cyclical sensitivity of job-to-job flows (by Sandra Schaffner)
• Testing the neoclassical migration model: overall and age-group specific results for German regions (by Timo Mitze and Janina Reinkowski)

Abstracts and full-text downloads (potentially chargeable) are available under SpringerLink

Lifelong learning inequality?

Despite ample evidence on intergenerational persistence of formal education as well as on the determinants of non-formal training, these issues have not yet been analysed jointly. Count data analyses show that a low-qualified family background is negatively related to both likelihood and frequency of on-the-job training. This result holds when controlling for education, ability and personality as well as job and firm characteristics.

IAB-Discussion Paper 9/2011

Investments in education and welfare in a two-sector, random matching economy

The authors consider a random matching model where heterogeneous agents choose optimally to invest time and real resources in education. They also provide restrictions on the fundamentals sufficient to guarantee that equilibria are characterized by overeducation (or undereducation), present some results on their comparative statics properties, and discuss the nature of welfare improving policies.

IAB-Discussion Paper 8/2011

Income taxes, subsidies to education, and investments in human capital

The authors study a two-sector economy with investments in human and physical capital and imperfect labor markets. They also analyze the welfare properties of equilibria and study the effects of several tax policies on the total expected surplus. In particular, consider the equilibrium associated with a flat labor income tax. Under suitable restrictions on the parameters, a revenue neutral progressive change in the marginal tax rates is welfare improving. 

IAB-Discussion Paper 7/2011

Does higher education help immigrants find a job?

The authors analyse the role that education signals play in the transition rates from unemployment to finding a job. They compare the results for Ethnic Germans with those for foreigners from the same origin countries and Native Germans. In the first case, the two have the same labourmarket access but different migration backgrounds. In the second case, the migration background is similar, but labourmarket access is not.

IAB-Discussion Paper 6/2011

4th Summer Conference in Regional Science

The Gesellschaft für Regionalforschung (GfR), the German speaking section of the European Regional Science Association, the Institute for Employment Research (IAB) and the Institute of Transport & Economics at the Technische Universität Dresden are very pleased to announce their joint International Summer-Conference, which will take place in Dresden. This year’s special topic is “Regional Economic and Labor Market Policies: Concepts, Results, and Challenges”.

Further information and Call for Paper

The intergenerational transmission of educational attainment in East and West Germany

Socialist societies often emphasized the abolition of traditional social classes. To achieve this objective, educational opportunities were at times 'actively managed' and allocated to children of less educated parents. What happened to these patterns after the demise of socialist rule in Eastern Europe? The authors study the development of educational mobility after the fall of the iron curtain in East Germany and compare the relevance of parental educational background for secondary schooling outcomes in East and West Germany. Based on data from the German Mikrozensus they find that educational mobility is lower in East than in West Germany and that it has been falling in East Germany after unification. While the educational advantage of girls declined over time, having many siblings presents a more substantial disadvantage in East than in West Germany.

IAB-Discussion Paper 4/2011

Persistence of regional unemployment

In this paper, the authors present a new econometric approach to the study of regional unemployment persistence, in order to account for spatial heterogeneity and/or spatial autocorrelation in both the levels and the dynamics of unemployment. They propose an econometric procedure suggesting the use of spatial filtering techniques as a substitute for fixed effects in a panel estimation framework. The authors present several experiments in order to investigate the spatial pattern of the heterogeneous autoregressive parameters estimated for unemployment data for German NUTS-3 regions. They find widely heterogeneous but generally high persistence in regional unemployment rates.

IAB-Discussion Paper 3/2011

Flexible working times foster economic growth

That the German economy was able to achieve high growth rates in 2010, so soon after the crisis, was largely due to flexible working times. Employees' average annual working time rose by 2.3 per cent, for instance through the ending of short-time work, the return to normal company working hours, the reduction of credit hours on working time accounts, and more overtime.

Press release

See table: Average hours worked and its components in Germany

Wage rigidity

In times of crisis, employers tend to resort to dismissals instead of the medium of reduction in nominal wages. This may be due to the influence of the trade unions, the inflexibility of company wage systems, or possibly also norms of fairness. What effect do downwardly rigid wages have on the labour market? Do they lead – in conjunction with a lower inflation rate – to higher unemployment? This IAB info platform presents scientific literature on the topic of wage rigidity.

IAB info platform: Wage rigidity

Selective immigration policies, migrants' education and welfare at origin

Destination countries are progressively shifting towards selective immigration policies. These can effectively increase migrants' average education even if one allows for endogenous schooling decisions and education policies at origin. Still, more selective immigration policies reduce social welfare at origin.

Further information

Using support vector machines for generating synthetic datasets

Generating synthetic datasets is an innovative approach for data dissemination. Values at risk of disclosure or even the entire dataset are replaced with multiple draws from statistical models. The quality of the released data strongly depends on the ability of these models to capture important relationships found in the original data. Defining useful models for complex survey data can be difficult and cumbersome. One possible approach to reduce the modeling burden for data disseminating agencies is to rely on machine learning tools to reveal important relationships in the data. This paper contains an initial investigation to evaluate whether support vector machines could be utilized to develop synthetic datasets.

Further information

The German job vacancy survey

The German job vacancy survey has been conducted since 1989 by the IAB. It was started as a yearly written survey in Western Germany and was extended to Eastern Germany in 1992. From the outset the object was to obtain information on the number and the structure of job vacancies (registered and not registered) and on staff searching processes. In each fourth quarter a multiple page questionnaire is sent out to a representative number of private firms and public administrations in all economic sectors (except Private households and Extra-territorial organizations and bodies). The statistical units are local units with at minimum one employee covered by the social insurance system. Since 2006 the written surveys in the fourth quarter have been supplemented by short telephone interviews in the first, second and third quarter to get short-term information on the development of the labour demand during a year.

Further information

Low-wage jobs: A means for employment integration of the unemployed?

Does the low wage sector serve as a stepping stone towards integration into betterpaid jobs or at least towards integration of jobless people into employment? There is evidence for a “low-wage trap” and for a high risk of low-wage earners to get unemployed, but this may also be due to sorting effects and not to low-wage work itself. We want to contribute to this debate and analyse employment spells of male lowwage earners, who had been unemployed before, with methods of continuous-time event history analysis. Our data have been retrieved from two large administrative micro-data sources: The IAB employment sample (IABS) for Germany, and a combination of social security data from the Austrian Social Insurance Institutions with information on registered unemployment from the public employment service for Austria. We focus on two possible exits of low-wage spells: Exits to higher-paid employment (upward mobility vs. persistence), and exits to unemployment (“no-paylow-pay cycle”). The results show shorter spell durations in Austria, pointing to a considerably higher fluctuation and labour turnover in the Austrian labour market. We investigate the influence of individual and firm-related characteristics and of the individual unemployment history on exit probabilities and the role of duration dependence in both countries. With regard to upward mobility, we find no convincing evidence for “true” duration dependence, at least for Germany. As to the risk of falling back into unemployment, our results suggest that even low-wage workers can accumulate job-related human capital favouring employment integration over time.

IAB-Discussion Paper 1/2011

Local human capital, segregation by skill, and skill-specific employment growth

Labour markets in most highly developed countries are marked by rising levels of skill segregation in the production process and increasing inequalities in skill-specific employment prospects. Local human capital has a likely effect on skill specific productivity levels and employment growth. Furthermore, theoretical studies suggest that skill segregation might matter for the polarisation of wages and employment. There are several studies investigating the influence of the local human capital endowment on qualification-specific wages levels. However, analyses on regional employment growth by different skill levels are still scarce and empirical evidence on the effects of skill segregation on qualification-specific employment is completely lacking. This paper investigates the effects of the local skill composition and skill segregation in the production process on qualification-specific employment growth in West German regions. This study provides first evidence for negative effects of skill segregation on low-skilled employment growth. Furthermore, the results show that a large share of local high-skilled employment does not foster further regional concentration of human capital but positively affects the employment prospects of less skilled workers.

IAB-Discussion Paper 22/2010

Best Paper Award 2009 goes to René Böheim and Ulrike Famira-Mühlberger

This year as well, the editors of the Journal for Labour Market Research (Zeitschrift für ArbeitsmarktForschung, ZAF) have conferred a Best Paper Award for the best article of the previous year. The prize, which includes prize money of 1,000 euros, goes to René Böheim and Ulrike Famira-Mühlberger of the Austrian Institute of Economic Research. Their article was published in Issue 2-2009 and is entitled "Dependent self-employment: workers between employment and self-employment in the UK".

Best Paper Award 2009

Direct job creation revisited

Bringing welfare recipients into jobs is a major goal of German labour market policy since a reform of the year 2005. Direct job creation providing participants with temporary subsidized jobs mainly in the non-profit sector plays an important role for achieving this goal. There are three schemes that differ only with respect to a few features: traditional job creation schemes, One-Euro-Jobs and work opportunities subsidising contributory jobs. The authors studies and compares the effectiveness of these three job creation schemes for welfare recipients starting their participation in these programmes in mid 2005.

IAB-Discussion Paper 21/2010

Is Europe on the way to becoming a “high-speed labour market”?

According to current widespread belief,stable employment careers in developed economies are gradually become the exception rather than the rule. According to this hypothesis, labour market mobility is increasing, and employees are being forced to find a new employer more and more often in the course of their working life. A comparative international study investigates how employment dynamics have really developed since the 1990s.

Migration, integration, and the labor market after the recession in Germany

This case study examines the global economic crisis, how it has affected the German labor market, and why the impact of the recession has been so small. It analyzes the impact of the crisis on the labor market integration of migrants and on their employment and unemployment. It also discusses policy reactions to the recession and provides an outlook for the future and some policy conclusions to address the structural barriers facing migrants in the labor market.

Further information

Parental risk attitudes and children's secondary school track choice

It is well known that individuals’ risk attitudes are related to behavioral outcomes such as smoking, portfolio decisions, and also educational attainment, but there is barely any evidence on whether parental attitudes affect the educational attainment of dependent children. We add to this literature and examine whether parents’ risk attitudes relate to children’s secondary school track choice in Germany where tracking occurs at age ten and has a strong binding character. Our results indicate mainly no effects of paternal risk preferences but a strong negative impact of maternal risk aversion on children’s enrollment in upper secondary school.

IAB-Discussion Paper 19/2010

Make further vocational training pay

The current low participation rate of low-skilled workers in vocational re-training activities as well as the relatively high share of youth without vocational qualification are major challenges for German labour market policies. Recently implemented programs by the Federal Employment Service (BA) to improve the management of school-to-work transitions as well as re-training activities of already employed workers are analyzed in the framework of 'Transitional Labour Markets' (TLM). The TLM approach provides a series of proposals to manage social risks deriving from the need of making transitions during the life course. Preliminary evaluation results of early intervention and BA re-training programs are promising so far. However, extending the existing programs or even institutionalizing life-long learning as a social right by converting contribution based unemployment insurance into employment insurance - a prominent TLM recommendation - would require high financial resources and possibly undermine individual as well as corporate responsibility.

IAB-Discussion Paper 18/2010

Crisis, what crisis? Patterns of adaptation in European labor markets

The current crisis, while of a global nature, has affected national labor markets to a varying extent. While some countries have experienced a steep increase in unemployment, employment in other developed economies has not fallen in parallel with a significant decline in GDP. The analysis shows that labor market institutions frequently used to study employment performance can explain the development of unemployment in the situation of crisis in some clusters of countries much better than in others.

Further information

Ethnicity and educational achievement in compulsory schooling

This article documents that at the start of school, pupils from most ethnic groups substantially lag behind White British pupils. However, these gaps decline for all groups throughout compulsory schooling. Language is the single most important factor why ethnic minority pupils improve relative to White British pupils. Poverty, in contrast, does not contribute to the catch-up.

Further information

International comparison: Business start-ups in times

Along with risks, an economic crisis can also provide opportunities – especially for business start-ups. When other companies are closing their doors, this gives new enterprises the chance to get a foothold in the market with innovative business ideas and concepts. A survey within the framework of the “Global Entrepreneurship Monitor” (GEM) was carried out for the tenth time in Germany in 2009 in order to assess entrepreneurial activities of all kinds. The best-known unit of measurement in the GEM is “total early-stage entrepreneurial activity” (TEA).

IAB Brief Report 8/2010

Health at work - indicators and determinants

In this paper, the current knowledge and issues regarding the economic impact of health at work in Germany is reviewed as a part of the EU project 'An inquiry into health and safety at work: a European Union perspective' (acronym: HEALTHat-WORK). After a description of the German institutional framework for occupational safety and health (OSH), it presents indicators of health and safety at work - such as sickness absences, occupational accidents and diseases, disability rents, working conditions, and OSH policy.

IAB-Discussion Paper 17/2010

Does downward nominal wage rigidity dampen wage increases?

Focusing on the compression of wage cuts, many empirical studies find a high degree of downward nominal wage rigidity (DNWR). However, the resulting macroeconomic effects seem to be surprisingly weak. This contradiction can be explained within an intertemporal framework in which DNWR not only prevents nominal wage cuts but also induces firms to compress wage increases. The authors analyze whether a compression of wage increases occurs when DNWR is binding by applying Unconditional Quantile Regression and Seemingly Unrelated Regression to a data set comprising more than 169 million wage changes.

IAB-Discussion Paper 16/2010

The mysteries of the trade: employment effects of urban interindustry spillovers

Theories in regional science predict that related establishments benefit from their mutual proximity due to forward-backward linkages, labor market pooling and knowledge spillovers (the Marshallian forces). While the existence of these externalities as a whole is well supported by the empirical literature, there are few studies that discriminate between separate explanations. This paper introduces a new approach to assess the importance and magnitude of each of the Marshallian forces separately.

IAB-Discussion Paper 15/2010

Effects of workplace representation on firm-provided further training in Germany

Using the IAB Establishment Panel the author examine the impact of works councils and shop-floor participation on further training and training intensity. The analysis reveals a positive impact of works councils on firm-provided further training, but provides slightly weaker evidence of firm-size differentials of workplace representation.

IAB-Discussion Paper 14/2010

Labour, Markets and Inequality

Labour markets and inequalities represent a subject that is far from having been explored extensively. For this reason, the editors of the Journal for Labour Market Research have picked up this topic in a Special Issue “Labour, Markets and Inequality”. With Colin Crouch, Claus Offe and John E. Roemer renowned scientists could be acquired as authors and coeditors of this issue.

Journal for Labour Market Research (Vol. 43, Issue 1)

Abstracts and full-text downloads

The German work-sharing scheme

Since the bank crash tossed the world into an economic crisis in the second half of 2008, politicians have been eagerly searching for interventions to ease the pain in the labour market. For the German labour market, Kurzarbeit (i.e. work sharing or short-time work allowance) may turn out to be the most important instrument of labour market policy. This working paper takes an in-depth look at Germany's Kurzarbeit scheme, and how it has been used as an instrument to combat the economic and jobs crisis.

Further information

Economic uncertainties in the family

Recent research on social inequality and the family has pointed out that partners provide an important social context for individuals' decisions, behaviour and resulting social outcomes. Unemployment is a particularly interesting issue to be studied in the context of partnership, as unemployment and the ensuing loss of income of one partner might affect the whole family, and fast re-employment reduces the risks of economic uncertainty and deprivation of the family. However, the particular effects of the partner and his or her resources on unemployment of the other and its duration have not yet been fully explored. In the paper the authors examine how couples deal with each other's unemployment, i.e. whether and how quickly re-integration into the labour market occurs.

Further information

Wages, employment and tenure of temporarily subsidized workers: Does the industry matter?

This paper explores whether wage, employment and tenure outcomes of workers taking up a job subsidized by the German Federal Employment Agency differ by industry. The analysis utilizes administrative data and statistical matching techniques; it covers an observation period of 3.5 years.

IAB-Discussion Paper 12/2010

Reservation wages of the unemployed

For what wages are the unemployed willing to take up a job? Do their expectations regarding pay drop with the length of their unemployment? This IAB info platform presents scientific findings on "reservation wages".

The decline in full-time work is slackening off

Ethnic concentration and language fluency of immigrants

The paper analyses the impact of regional own-ethnic concentration on the language proficiency of immigrants. It solves the endogeneity of immigrants' location choices by exploiting the fact that guest-workers in Germany after WWII were initially placed by firms and labor agencies. We find a robust negative effect of ethnic concentration on immigrants' language ability. Simulation results of a simultaneous location and learning choice model confirm the presence of the effect and show how immigrants with high learning cost select into ethnic enclaves. Under the counterfactual scenario of a regionally equal distribution of immigrants the share of German-speakers increases only modestly.

IAB-Discussion Paper 10/2010 

Looking beyond the bridge: How temporary agency employment affects labor market outcomes

In this paper, the authors perform a comprehensive analysis of the stepping-stone effects of temporary agency employment on unemployed workers in Denmark in the period 1997-2006. Using duration models and the “timing-of-events” approach, they investigate whether agency employment generally acts as a bridge to regular employment, and also look for heterogeneous effects of temporary agency jobs. Moreover, the authors investigate how the treatment intensity affect our results, and how temporary agency employment affects post-unemployment job quality.

IAB-Discussion Paper 9/2010

Interregional wage differentials and the effects of regional mobility on earnings of workers in Germany

Regional migration of workers plays a substantial role in overcoming regional employment disparities and hence in reducing unemployment. Compared to Anglo-Saxon countries, however, rates of internal mobility are relatively low in Germany. One explanation for this might be an insufficient effect of migration on wages. Florian Lehmer therefore analyzes the short- and long-term effects of interregional mobility on the earnings of workers and identifies the groups who benefit most from the migration wage premium. Apart from the heterogeneity of workers, he devotes special attention to the heterogeneity of firms and regions. He finds that analyses of migration flows between rural and urban areas, in particular, give important insights into the nature of the agglomeration wage differential and its impact on the migration wage premium.

Further information

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Only a few women reach top positions

Women are rarely found at the uppermost executive levels of large-scale enterprises. Not much has changed, even in the last four years since the previous survey. It may be true that there are more "women managers" in small and medium-sized establishments and at the second management level, but they are not found in any executive area in numbers corresponding to their share of the workforce.

IAB Brief Report No. 6/2010

T.A.S.K.S (Technology, Assets, Skills, Knowledge, Specialisation)

This workshop invites empirical and theoretical contributions using the task-based approach from all areas of labor market research and related fields such as the educational research, industrial economics, international comparisons, or public finance.

Programm and abstracts

Agglomeration and regional employment growth

The advent of the New Economic Geography has spawned a renewed interest in questions of agglomeration. The present work expands the research on the impact of agglomeration economies on employment growth by connecting two strands of the empirical literature. A localization index and a cluster index are calculated in order to measure the prevalence of agglomeration. Using these indices, industries and locations that exhibit geographical concentration are identified. The main part of the paper is an econometric analysis. In a dynamic panel data model, the two indices are explicitly used to measure additional dynamic employment growth in agglomerated plants. The study uses panel data that covers all western German employment subject to social security from 1989 to 2006 in 326 districts. I analyze which regional characteristics favor the growth of employment in 191 industries of the manufacturing and service sectors. There is evidence that industrial agglomerations exhibit stronger dynamic growth than other industry/region cells.

IAB-Discussion Paper 7/2010

Multiple imputation of missing values in the wave 2007 of the IAB Establishment Panel

The basic concept of multiple imputation is straightforward and easy to understand, but the application to real data imposes many implementation problems. To define useful imputation models for a dataset that consists of categorical and of continuous variables with distributions that are anything but normal, contains skip patterns and all sorts of logical constraints is a challenging task. In this paper, we review different approaches to handle these problems and illustrate their successful implementation for a complex imputation project at the German Institute for Employment Research (IAB): The imputation of missing values in one wave of the IAB Establishment Panel. 

The use of social networks in recruiting processes from a firm's perspective

Sociological as well as economic research is interested in the role of social networks in staffing processes. Empirical studies usually consider them as relevant from the job seekers' point of view. But there is only little knowledge of firms' perspective on this issue. This paper contributes to decrease this research gap with results on base of representative data from the German Job Vacancy Survey for the years 2004 until 2008 with up to 9000 participating firms yearly. It is the goal of this paper, to characterize and structure firms that use social networks in staffing processes, using information not only about the firm itself, but also about the position that has been filled. The results show a tendency that networks help to reduce search costs and are especially useful in difficult economic situations. The positions filled via networks are more likely to be stable positions either in a very high labour market segment or in a very low one with rather difficult working conditions.

IAB-Discussion Paper 5/2010

The effects of unemployment insurance on labour supply and search outcomes

This paper evaluates the impact of large changes in the duration of unemployment insurance (UI) in different economic environments on labor supply, job matches, and search behavior. The authors shows that differences in eligibility thresholds by exact age give rise to a valid regression discontinuity design, which they implement using administrative data on the universe of new unemployment spells and career histories over twenty years from Germany. The authors find that increases in UI have small to modest effects on non-employment rates, a result robust over the business cycle and across demographic groups. Thus, large expansions in UI during recessions do not lead to lasting increases in unemployment duration, nor can they explain differences in unemployment durations across countries. They do not find any effect of increased UI duration on average job quality, but show that the mean potentially confounds differential effects on job search across the distribution of UI duration. However, it appears that for a majority of UI beneficiaries increases in UI duration may lead to small declines in wages.

IAB-Discussion Paper 4/2010

In 2009, flexible working time and short-time work safeguarded more than a million jobs

For the most part, flexible working times absorbed the brunt of the economic crisis on the German labour market in 2009, the Institute for Employment Research (IAB) reports. Employees' average annual working time decreased by 3.2 per cent, for instance though short-time work and the reduction of credit hours on working time accounts. "In figures, this decrease corresponds to roughly 1.2 million jobs saved," according to the labour market researchers Eugen Spitznagel and Susanne Wanger.

Brief overview

Determinants of lifetime unemployment

The empirical literature on unemployment almost exclusively focuses on the duration of distinct unemployment spells. In contrast the authors use a large German administrative micro data set for the time span 1975-2004 to investigate individual lifetime unemployment (defined as the total length of all unemployment spells over a 25-year period). This new perspective enables them to answer questions regarding the long-term distribution and determinants of unemployment for West German birth cohorts 1950-1954. They find that lifetime unemployment is highly unevenly distributed and employ censored quantile regressions to show that, for men, pursuing a disadvantageous occupation early in the professional career leads to a significantly higher amount of lifetime unemployment.

IAB-Discussion Paper 3/2010

The long-term impact of job displacement in Germany during the 1982 recession on earnings, income, and employment

The paper shows that workers displaced from their stable jobs during mass-layoffs in the 1982 recession in Germany suffered permanent earnings losses of 10-15% lasting at least 15 years. These estimates are obtained using data and methodology comparable to similar studies for the United States. Using the advantages of the German data, the authors also show that while reduction and recovery in time worked plays a role in explaining earnings losses during the first ten years, the majority of the long-run loss is due to a decline in wages. They also show that even the generous German unemployment insurance system replaced only a small fraction of the total earnings loss. These findings suggest that job displacements can lead to large and lasting reductions in income even in labor markets with tighter social safety nets and lower earnings inequality.

IAB-Discussion Paper 1/2010

Fixing the leak

From 2002 - 2004, the German government passed several laws that curtailed the generosity of the unemployment compensation system. One of the most ambitious changes was a considerable reduction in unemployment benefit entitlement lengths for the older unemployed, which was effective during 2006 and 2007. We apply a difference-in-differences approach to show that the highly disputed reform induced a considerable decline in unemployment incidence among older workers. It thus sealed an important leak in the unemployment insurance system. Furthermore, we find a strong anticipation effect; unemployment entries of elderly workers peaked during the months preceding the reform.

IAB-Discussion Paper 25/2009

Unemployment and labour market policies: Novel approaches

A special issue of the International Journal of Manpower covers selected papers that have been presented at the Conference “Unemployment and Labour Market Policies: Novel Approaches”.

The Conference took place in Nuremberg during October 2007, and was hosted by the IAB and the German Association of Political Economy. Uwe Blien, Elke J. Jahn and Gesine Stephan are guest editors of the volume. The volume encompasses several papers authored or co-authored by IAB staff: Katja Wolf and her coauthors Reinhard Hujer, Paulo J. M. Rodrigues (both University of Frankfurt) provide a macro evaluation study about German active labor market programs. Also for Germany, Elke J. Jahn analyzes whether legal norms defined by employment protection legislation are taken account by firms’ dismissal behavior. The study of Marion König and Joachim Möller analyzes the impact of an introduction of minimum wages in the West and East German construction sector. A paper by Herbert Brücker and Cécily Defoort (University Lille II) contributes to the literature on the economics of brain drain and investigates the self selection of international migrants. Juliane Achatz, Bernhard Christoph, Mark Trappmann, and Claudia Wenzig describe the new IAB household panel data set “Labour Market and Social Security” (PASS), which was designed to address the labor market situation and problems of individuals at the lower end of the income distribution.

International Journal of Manpower

Evaluating the labour-market effects of compulsory military service

We identify the causal effect of compulsory military service on conscripts' subsequent labour-market outcomes by exploiting the regression-discontinuity design of the military draft in Germany during the 1950s. Unbiased estimates of military service on lifetime earnings, wages, and employment are obtained by comparing men born before July 1, 1937 (the 'White Cohort') who were exempted from compulsory military service to men who were born on or shortly after this threshold date and hence faced a positive probability of being drafted. We find that the putative earnings advantage and wage premium of those who served in the armed forces vanish when selection effects are taken into account.

IAB-Discussion Paper 23/2009

Remaining on course in labour market policy

"The labour market reforms were indeed beneficial, as the distinct improvements in the situation on the labour market between the years 2005 and 2008 have shown. They were partially responsible for the latest upswing on the labour market and will shape the next upswing in a way supportive of employment," the Directors of the Institute for Employment Research (IAB), Joachim Möller and Ulrich Walwei, emphasize in the current special edition of the journal IAB-Forum dealing with the economic crisis.

The IAB-Forum is published only in German. Selected articles of this special edition have been translated into English. 

Crisis Analysis and Recommendations
Anti-Crisis Programmes in Europe and the USA 
Economic Stimulus Plans against the Crisis

IAB-Forum Special 2009

Industrial clusters and economic integration

Theoretic concepts and an application to the European Metropolitan Region Nuremberg

Economic integration typically goes along with disintegration of production through outsourcing and offshoring (Feenstra, 1998). As horizontal and vertical links between firms become more and more pronounced, value chains within regions are increasingly organized by production and innovation clusters. On the basis of a literature overview, we argue that in a world of economic integration clusters can be expected to play a prominent role. Therefore clusters can also be seen as a key element in the European Metropolitan Region concept. Within such an economic space, localisation economies according to the ‘Marshallian trinity’ (knowledge spillovers, input sharing and labour market pooling (Rosenthal/Strange 2003)) can be realized.

IAB-Discussion Paper 22/2009

Improving retrospective life course data by combining modularized self-reports and events history calendars

Event history calendars (EHC) have proven to be a useful tool to collect retrospective autobiographic life course data. One problem is that they have only been standardized to a certain extent. This limits their applicability in large-scale surveys. However, in such surveys a modularized retrospective CATI design can be combined with EHC.

IAB-Discussion Paper 21/2009

Effectiveness of One-Euro-Jobs

Recent labour market reforms in Germany introduced a workfare programme called One-Euro-Jobs with roughly 700,000 means-tested benefit recipients participating per year. In programme design leeway is given to local actors to respond to regional and individual factors. The legislature has set only key features of One-Euro-Jobs: One-Euro-Jobs are required to be additional and temporary jobs of public interest.

IAB-Discussion Paper 20/2009

Sources for regional unemployment disparities in Germany

The paper analyses movements in the unemployment rate of West German districts in the period 1992-2004 by the chain reaction theory of unemployment (CRT). The estimations show that unemployment movements are generated together by lagged adjustment processes and by exogenous shocks.

IAB-Discussion Paper 19/2009

The determinants of local employment dynamics in Western Germany

This paper studies the impact of the local industrial structure on employment dynamics in Western Germany. Following an approach of Combes/Magnac/Robin (2004) for France, local employment growth is decomposed into internal growth resulting from employment changes in existing plants and into external growth determined by employment decisions of newly established plants. The dynamics of both components are estimated simultaneously, taking explicitly into account the timing of the impact of specialization, diversity, and competition in a region. The analysis is conducted for 24 sectors in the West German labor market regions from 1993 to 2002.

IAB-Discussion Paper 18/2009

Short-term training variety for welfare recipients

Since 2005, jobless employable individuals have to be available for the labour market with various activation programmes helping them. One major programme is short-term training teaching certain skills or assisting in job search. However, little is known about the effectiveness of such a short programme for welfare recipients. This study evaluates the effects of seven short-term training types in the introduction period of the reform in spring 2005 on the individual probability of being regularly employed. I use large German administrative datasets and propensity score matching. The results show that within-company training has large positive effects. Furthermore, skill training is more effective than other types. However, comparing skill training participants pair-wise with others does not result in consistent positive effects.

IAB-Discussion Paper 17/2009

Job entry and the ways out of benefit receipt of young adults in Germany

The study explores the way out of benefit receipt by labour market integration of young adults in Germany. Under 25-year-olds are a target group of the German social policy. If they rely on the payment of social benefits a prompt integration into employment or training is the main priority. The aim is to prevent young people from long-term benefit dependency. The causes of long-term benefit receipt can be discussed from different perspectives: Based on diverse labour market theories, poor perspectives of young benefit recipients can depend on low labour market opportunities. But in the political and public discourse in Germany, long-term benefit receipt of young adults is mostly regarded as the consequence of young people's low labour supply and resignation in benefit dependency. The article examines the chances to leave benefit dependency by labour market integration of about 650 18- to 24-year-old benefit recipients in 2005. The analysis is based on the survey 'Life Circumstances and Social Security 2005' of the Institute for Employment Research (IAB) in Germany and on longitudinal register data of the Federal Employment Agency for three years, 2005 to 2007. The analyses show that most young benefit recipients enter a job or training during the observed period of time; though in many cases young adults keep on receiving benefits. Long-term benefit dependency is predominantly a matter of poor job prospects of low qualified young people and young single parents. But there is no evidence that ongoing benefit claims may go hand in hand with young people's poor labour supply.

IAB-Discussion Paper 16/2009

Best Paper Award 2008 of the Journal for Labour Market Research (Zeitschrift für ArbeitsmarktForschung, ZAF) goes to Bernhard Boockmann, Daniel Gutknecht und Susanne Steffes

This year also, the publishers of the Journal for Labour Market Research (Zeitschrift für ArbeitsmarktForschung, ZAF) have conferred the Best Paper Award for the best article of the previous year. The prize, which includes prize money of 1,000 euros, goes to Bernhard Boockmann, Daniel Gutknecht and Susanne Steffes. Their article, entitled "The effect of employment protection on the stability of 'new' employment contracts (Die Wirkung des Kündigungsschutzes auf die Stabilität 'junger' Beschäftigungsverhältnisse)", appeared in the topical issue on flexibilisation potentials in heterogeneous labour markets (2-3/2008).

In their study, the prizewinners use the lowering of the threshold value in the German Employment Protection Act of 1999 quasi as a natural experiment. The results suggest that employment protection has a positive effect on the employment stability of newly created working relationships. The publishing committee sees the study as an original contribution which is of high relevance to labour market policy, one that is convincing because of its persuasive research design, a very careful preparation and analysis of data, and its clear diction.

IAB and the publishing committee of ZAF gratulate the prizewinners warmly. We would like to mention here that articles co-authored by members of the ZAF publishing committee were a priori excluded from the appraisal.

Die Wirkung des Kündigungsschutzes auf die Stabilität "junger" Beschäftigungsverhältnisse

Does labour mobility reduce disparities between regional labour markets in Germany?

Differences in regional labour market conditions are still pronounced in Germany, especially between the Eastern and the Western part. Traditional neoclassical models imply that labour mobility should reduce disparities. In contrast, models that include externalities or selective migration suggest that regional differences might well increase due to interregional migration of workers. We investigate the impact of labour mobility on regional disparities in Germany between 1995 and 2005. Considering the impact of migration as well as commuting, effects on regional wages and unemployment are estimated. Our results suggest that labour mobility tends to reduce disparities; however, we find significant effects only on unemployment disparities.

IAB-Discussion Paper 15/2009

Do more placement officers lead to lower unemployment?

In this paper the authors examine the effect of a pilot project of the German Federal Employment Agency, where in 14 German local employment offices the caseload (number of unemployed per caseworker) was significantly reduced. Since the participating local offices were not chosen at random, we have to take into account potential selection bias. Therefore, the authors rely on a combination of matching and a difference-in-differences estimator. They use two indicators of the offices’ success (unemployment rate, growth of the number of SCIII clients). The results indicate a positive effect of a lower caseload on both outcome variables.

IAB-Discussion Paper 13/2009

Prize for the "Best Junior Publication" to Gerhard Krug and co-authors

The paper "Welfare effects of the Euro cash changeover" by Christoph Wunder, Johannes Schwarze, Gerhard Krug (IAB) and Bodo Herzog published in 2008 was awarded the Junior Prize of the Society of Friends of the DIW (German Institute for Economic Research), Berlin for the "Best scientific publication in 2007-2008 based on German Socio-Economic Panel Data".

Further information

Not many people set up their own businesses in Germany

By international comparison, the number of people setting up their own enterprises in Germany is very low. Only 1.4 percent of the 18- to 64-year olds are currently involved in setting up some kind of enterprise. A further 2.4 percent have become self-employed during the last three-and-a-half years. With this, Germany ranks second-last within the 18 similarly highly developed countries. The United States leads the field while Belgium comes in last, according to a study of the Institute for Employment Research (IAB) and the Institute of Economic and Cultural Geography of the Leibniz University, Hannover, issued last Monday.

The study is based on data from the Global Entrepreneurship Monitor (GEM). In Germany alone more than 4,700 persons were asked whether they were in the process of setting up their own company or had done so recently. In all, 127,000 interviews were carried out in 43 countries in the course of 2008.

IAB-Kurzbericht (IAB Brief Report) No. 15/2009

Press release

Economic and financial crisis: Taking a breath by sharing work

For German establishments work sharing (“Kurzarbeit”) is an important option to layoffs. They may receive benefits when they refrain from the use of layoffs, and instead reduce working hours of employees. As a compensation for the unavoidable reduction of work employees receive “Kurzarbeitergeld” from the unemployment insurance. The success of this programme will depend on the forthcoming economic development. In the long run mere “Kurzarbeit” cannot save jobs if there is no perspective for employment. Work sharing might be helpful if lack of work is transitory but if structural transformation is unavoidable then the problem has simply been deferred.

IAB-Kurzbericht (IAB Brief Report) No. 14/2009 

They are even larger! More (on) puzzling labor market volatilities

This paper shows that the German labor market is more volatile than the US labor market at the business cycle frequency. Specifically, the volatility of the cyclical component of several labor market variables (e.g., the job-finding rate, the labor market tightness and vacancies) divided by the volatility of labor productivity is roughly twice as large as in the United States. We derive and simulate a simple model to explain this seemingly puzzling result. This new model provides explanations for this phenomenon, in particular the longer job tenure in Germany.

IAB-Discussion Paper 12/2009

Unemployment dynamics in West Germany

The results for labour demand shocks at the place of residence for German Federal States and districts according to the model of regional adjustment developed by Blanchard/Katz (1992) are in line with other studies in this field. They suggest that adjustment to region-specific shocks in the year of the shock is mainly through participation behaviour and unemployment changes, not by migration. If, however, the estimations additionally allow for commuting as an adjustment mechanism, the unemployment rate and interregional mobility (i.e. migration and commuting activities) capture the major part of the regional adjustment process.

IAB-Discussion Paper 11/2009

What makes a 'jack-of-all-trades'?

This paper addresses the 'Jack-of-all-Trades' hypothesis, which presumes that it is individuals' variety of competencies/experience that drives entrepreneurship instead of their level of productivity (Lazear, 2005). The analysis focuses on two related dimensions of this variety argument: taste for variety (identified due to desire) and investment in ability (identified due to competence). First, the results show that it is important to distinguish between discrete and high level investments in the variety of experience. For instance, a high level of investment - which defines a 'Jack-of-all-Trades' - is less correlated with formal schooling than discrete investments. Second, the results indicate that both taste (desire) and ability (competence) correlate with the variety of experience, but the nature of the correlation differs. Particularly for males, the 'Jack-of-all-Trades'-hypothesis predominately relates to competence and not to desire.

IAB-Discussion Paper 10/2009

Employer wage subsidies and wages in Germany

In Germany, targeted wage subsidies to employers are an important instrument of active labor market policy. This paper utilizes process generated data of the German Public Employment Service to compare the wages of individuals taking up a subsidized job with those of otherwise similar individuals who found an unsubsidized job. The results indicate that subsidized jobs are not associated with gains or losses regarding daily wages, which might be contributed to wage setting within the German system of industrial relations. Nonetheless, because subsequent employment rates of subsidized persons are higher on average, we find a positive relationship between cumulated wages and subsidization.

IAB-Discussion Paper 9/2009

The labour market over the business cycle: Above all, a question of hiring

The development of employment and unemployment is the result of a vast amount of labour market flows. On every working day, roughly 30,000 workers are hired while another 30,000 are laid off, or leave their job.

IAB-Kurzbericht (IAB Brief Report) No. 13/2009 

Unemployment benefit II for households: Why lone parents have an especially hard time of it

Lone-parent households have an above-average risk of being poor. Four out of ten receive unemployment benefit II (Germany’s basic security benefit for job-seekers). In addition, they depend on those benefits for a longer period of time.

IAB-Kurzbericht (IAB Brief Report) No. 12/2009

Job vacancies in the 4th quarter 2008: Decreasing in industry – increasing in the social services

The first effects of the global crisis reached the German labour market in 4th quarter 2008: compared to the fourth quarter of 2007, the number of job vacancies had decreased by about 130,000 to 1.1 million. While the manufacturing of metal products and machinery showed a decrease in vacancies of almost 50 percent, vacancies increased by more than 30 percent in the social services.

IAB-Kurzbericht (IAB Brief Report) No. 11/2009

Disparities, persistence and dynamics of regional unemployment rates in Germany

The paper shows that the distribution of regional unemployment rates in Germany exhibits strong persistent behaviour. Furthermore, panel unit root tests and autoregressive fixed effects models indicate that regional unemployment rates display conditional rather than unconditional convergence. Thus, highly persistent unemployment disparities can be regarded as region-specific unemployment rates due to different regional endowments, adjusting quite rapidly to their region-specific means and therefore towards a stable pattern of unemployment disparities, rather than towards the national unemployment rate.

IAB-Discussion Paper 8/2009

Five years of the EU enlargement to the East: In the long term Germany profits from labour migration

Immigration from the eight Eastern European accession countries has raised the gross domestic product of the EU by 0.2 per cent or 24 billion euros since 2004. For the first five years of the EU enlargement to the East, Germany has only experienced a small portion of this migration because of its restrictions on immigration. According to the study “Labour mobility within the EU in the context of enlargement and the functioning of the transitional arrangements”, the opening of the German labour markets to immigration from the accession countries would have positive long-term effects.

IAB-Kurzbericht (IAB Brief Report) No. 9/2009

Press release

Project reports: Labour mobility within the EU in the context of enlargement and the functioning of the transitional arrangements 

Partial retirement – popular but not suitable for the future

This report examines the incidence and determinants of partial retirement in Germany for the years 1999 to 2007 focusing for example on enterprise size, branch of industry or occupational group of employed persons. The Partial Retirement Act was intended to facilitate a smooth transition from working life to retirement. Therefore the employers can reduce their working hours to half of the regular working time.

IAB-Kurzbericht (IAB Brief Report) No. 8/2009

In 2008, more work took place in Germany than ever before

The volume of work in Germany hit a record high in 2008. In total 57.75 billion working hours were recorded, 1.3 per cent more than in the year before. However in the slipstream of the economic downturn, growth became smaller and smaller, and a slight decline was recorded in the fourth quarter of the year. The employment situation was still stable but employees had worked 1.1 per cent less hours per head in the fourth quarter of 2008 than in the year before. In particular, paid overtime and credit on working time accounts were reduced, and short-term work introduced.

Brief overview

Labour migration in Germany: Declining losses of eastern German regions

Labour market disparities and growth perspectives of regions are strongly influenced by migration of the labour force. This report describes current trends of labour mobility according to educational attainment, focussing on differences between eastern and western Germany.

IAB-Kurzbericht (IAB Brief Report) No. 7/2009

Design and stratification of PASS

The paper introduces the general design features and particularities of a new largescale panel study for research on recipients of benefits for the long-term unemployed (the so called Unemployment Benefit II) in Germany that combines a sample of 6,000 recipient households with an equally large sample of the general population. Particular focus is on the sampling procedure for the general population, where a commercial database was used to draw a sample stratified by status.

IAB-Discussion Paper 5/2009

Fifteen years on and still no equal pay for women in Germany

Even with the same education, at the same age, in the same profession and at the same place of work, women still earn 12 per cent less than their male colleagues. That wage inequality between women and men has hardly changed in Germany over the last 15 years is shown by a study carried out jointly by the Institute for Employment Research (Institut für Arbeitsmarkt- und Berufsforschung, IAB) and the University of Konstanz. The analysis reveals the following fact: lower remuneration of women is less a consequence of financial inequality on a case-by-case basis but above all a result of social structures that allow women less frequent access to well-paid jobs than men.

Brief overview 

Forecast 2009: Deep recession will hit German labour market

The short report sheds some light on the development of the labour market in 2008 when Germany reached peak levels of employment and volume of work. The main part of the report offers a short-term forecast for 2009, based on the assumption that German real GDP will decrease by 2.75 per cent +/- 0.75 percentage points. The forecast includes labour supply, employment according to different categories, and underemployment with special focus on registered unemployment in the insurance system (German Social Code III) or in assistance for job-seekers in need of support (German Social Code II).

IAB-Kurzbericht (IAB Brief Report) No. 6/2009

Counting the unemployed in international comparison: Necessary adjustments or inadmissible tricks?

Unemployment figures are a very sensitive performance indicator of national employment policies. Changes in their counting mode evoke a lot of suspicion publicly as these changes are often considered as mere 'statistical tricks' to palliate unemployment figures. This report describes the changes in the German unemployment records since 2002 against the background of international developments.

What makes start-ups out of unemployment different?

To answer this question we formulate a theoretical sketch for start-up activity out of unemployment. Furthermore, we estimate spatial autoregressive models for the regional start-up rates out of unemployment as well as out of employment with German data from 1999 to 2004 at the NUTS3-level. Characteristics describing groups of potential entrepreneurs as well as agglomeration externalities have a similar impact on both start-up rates. They are, however, affected in different ways by the regional wage level and the probability of entrepreneurial success. Moreover, the local impact of these determinants is amplified by spatial spillover and spatial feedback effects, in particular for the start-up rate out of unemployment.

IAB-Discussion Paper 4/2009 

Trade unions go global

Worker movements have played a crucial role in making workplaces safer. Workplace safety is costly for firms but increases labour supply. A 'laissez-faire' approach which ignores safety at workplaces is inadequate. Safety standards set by better-informed trade unions increase output and welfare. Trade between a country with trade unions (mainly in the North) and a union-free country (mainly in the South) can lead to a reduction in work standards in the North. When trade unions are established in the South, the North – including northern unions – tend to lose out. However, quantitatively, these effects are small and are overcompensated for by gains in the South.

IAB-Discussion Paper 3/2009

Occupational upgrading and the business cycle in West Germany

The occupational skill structure depends on the business cycle if employers respond to shortages of applicants during upturns by lowering their hiring standards.

IAB-Discussion Paper 2/2009

In Germany, five per cent of persons in full-time employment belong to the "working poor"

Between 1999 and 2005 the proportion of persons in full-time employment in danger of falling below the poverty line doubled from 3 to 6 per cent. Although the quota dropped again by 1 percentage point to 5 per cent in 2006, this reduction is once more at risk because of the effects of the financial crisis.

Brief overview

The impact of federal social policies on spatial income inequalities in Germany

Almost twenty years after German reunification there are still huge income disparities between western and eastern regions in Germany. The main purpose of the paper is to show how social transfer payments reduce these inter-regional disparities.

IAB-Discussion Paper 1/2009

Multiple imputation of right-censored wages in the German IAB Employment Sample considering heteroscedasticity

In many large data sets of economic interest, some variables, such as wages, are top-coded or right-censored. In order to analyze wages by using the German IAB Employment Sample the authors first have to solve the problem of censored wages at the upper limit of the social security system. The authors treat this problem as a missing-data problem and derive new multiple imputation approaches to impute the censored wages by drawing a random variable from a truncated distribution based on Markov chain Monte Carlo techniques.

IAB-Discussion Paper 44/2008

Work incentives? Ex-post effects of unemployment insurance sanctions

Imposing sanctions on unemployed people by reducing their benefits is intended to bring them back into work. IAB researcher Barbara Hofmann found that such measures did indeed have a positive effect: when sanctioned, unemployed western German men and women were more likely to find a job – and not just any job, but regular employment. The study, based on administrative data from the Federal Employment Agency, applies a matching approach that takes the timing of events into account.

IAB-Discussion Paper 43/2008

International workshop on "Labour, Markets and Inequality"

A workshop on "Labour, Markets and Inequality" will take place at the Federal Employment Agency in Nuremberg on 24 and 25 September 2009. In the past twenty years, income inequality has increased in many Western countries. The workshop aims at bringing the scientific world a step closer to an international discourse on social inequality in as far as it is related to labour. The event is organized by the Council for Social Policy of the Verein für Socialpolitik in Frankfurt, the Sections for Social Inequality and Political Sociology of the German Sociological Association, and the Institute for Employment Research (IAB) in Nuremberg. Scientists from around the globe are invited to exchange their theoretical, empirical, experimental and policy-oriented views on this subject. Please submit your paper by 1 May 2009.

Call for Papers

Vouchers, contracting-out and performance standards: Market mechanisms in active labor market policy

Market elements are increasingly being used in measures of active labour market policy in Germany: access to further occupational training is granted via vouchers, private placement agencies may be used when looking for a job, and just recently a wage subsidy voucher has been introduced for older persons. Do these market mechanisms contribute to improving the flexibility and effectivity of the services offered? The "IAB-InfoSpezial" presents a selection of theoretical and empirical literature – in support of the workshop of the same name.

IAB-InfoSpezial: Vouchers, contracting-out and performance standards: Market mechanisms in active labor market policy

Programme with presentations of the lectures

Bringing the jobless into work?

Traditional labour market policies and the predominantly passive granting of unemployment support and social assistance have been replaced over the last ten years by activation strategies. Social transfer payments are dependent upon the willingness to accept job offers or to participate in employment promotion measures.

The book presents activation strategies in Germany, France, the United Kingdom, Denmark, Sweden, the Netherlands and Switzerland, contrasting these European strategies with developments in the United States.

Editors of this newly published book: Werner Eichhorst (Institute for the Study of Labor (IZA), Bonn), Otto Kaufmann (Max Planck Institute for Foreign and International Social Law (MPI), Munich) und Regina Konle-Seidl (IAB, Nuremberg).