A new look at the discouragement and the added worker hypotheses
13 February 2013
Using German data this study applies an unobserved-components approach to disentangle the unemployment rate into a (stochastic) trend and a cyclical part and to estimate the influence of these components on labor participation. The persistent trend component of unemployment, which triggers permanent reactions of the workers, is likely connected to a structural discouragement effect. The cyclical component, which reflects more fluctuant changes, can be linked to a shorter-term added worker effect. By splitting up the participation effect of changes in the unemployment rate our analysis differs profoundly from previous studies that present the net of both or only a single effect. For the total working population both a discouragement and an added worker effect were identified. In detailed analyses we find that the former was relevant for older workers, whereas the latter especially concerns prime aged and younger females. As many OECD countries are facing an ageing population as well as rising importance of women in the labor market, these age- and gender-specific results might be of particular interest.
IAB-Discussion Paper 1/2013
Comparing European Metropolitan Regions in Germany: Wages diverge conspicuously
17 December 2012
The wage level as an indicator of a region‘s economic strength shows strong distinctions between the eleven German Metropolitan Regions, along with a clear west-east gradient. Employees in the Metropolitan Regions Stuttgart, Munich and Frankfurt/Rhine-Main earn the highest incomes, according to a study in the current IAB-Forum by Anja Burghardt, Daniela Hochfellner and Marion König. The IAB-Forum is published only in German. Selected articles of this edition have been translated into English.
Comparing European Metropolitan Regions in Germany: Wages diverge conspicuously
More competition for bright minds
17 December 2012
Qualified professionals are the fuel of a knowledge-intensive economy, the fuel that gives Germany the necessary thrust in international competition. But more than a few people are worried that qualified professionals could soon become scarce. That is why the current issue of the IAB-Forum has chosen to examine this much discussed topic of "ensuring the availability of qualified professionals" (Fachkräftesicherung) from various different angles. The IAB-Forum is published only in German. Some of the selected articles of this edition have been translated into English.
The dynamics of the requirement for qualified professionals. In the long run, the forces of the market will counteract labour shortages (Stephan Brunow, Ulrich Möller, Jens Stegmaier)
More competition for bright minds. How to pilot qualified professionals into companies (Ulrich Walwei)
Examples from within companies. How employers look for and retain skilled workers (Oliver Ludewig, Ekaterina Kouli)
Decomposing Beveridge curve dynamics by correlated unobserved components
10 December 2012
Between 1979 and 2009, the German labour market moved along a Beveridge curve with changing slope that usually shifted outwards but once inwards. We em-ploy an unobserved components model to simultaneously disentangle permanent and transitory components of matching efficiency and separation rate (shifting pa-rameters) as well as unemployment and vacancies. Cointegration and identification are especially addressed. We find a steady overlay of structural and transitory shocks for both shifts of and movements along the curve. Thereby, the separation rate is more important than matching efficiency and the two are negatively corre-lated. Labour market tightness is mostly driven by stochastic trends, which leads to permanent rotations of the job creation curve, i. e. movements along the Beveridge curve.
IAB-Discussion Paper 28/2012
Job matching across occupational labour markets
03 December 2012
This paper refers to an analysis of matching processes in occupational labour markets in terms of classes of jobs that share extensive commonalities in their required qualifications and tasks. To date, all studies in this field have been based on the assumption of separate occupational labour markets. This assumption suggests that job search and matching processes only transpire within distinct occupational labour markets and that no occupational changes occur. I present theoretical and empirical arguments that undermine the validity of this assumption. Moreover, I construct an "occupational" topology based on information about the ways in which occupational groups may be seen as alternatives in searches for jobs or workers respectively. I then use pooled ordinary least squares, fixed effects, and pooled mean-group models that consider cross-sectional dependency lags for regressors to test the hypothesis that job search and matching occur across occupational labour markets. In particular, I find significant and positive matching elasticities with respect to the averaged numbers of unemployed workers and vacancies in similar occupational groups; these results clearly support my hypothesis. Furthermore, there are indications that returns to scale that are derived from the results of the pooled mean-group model are constant. The findings of this study strongly suggest the use of an augmented matching function that considers job and worker searches across occupational labour markets.
IAB-Discussion Paper 27/2012
2012 Gerhard Fürst Prize for Dr Stephanie Eckman
27 November 2012
The Award Presentation for outstanding scientific work took place during the 21st Scientific Colloquium on the subject of "Statistics in the Light of the European Bank and Debt Crisis" that was hosted jointly by the Federal Statistical Office and the German Statistical Society on 22 and 23 November 2012 in Wiesbaden.
Dr Stephanie Eckman received the 2012 Advancement Award in the category "Dissertations" for her work on the topic of "Errors in Housing Unit Frames and Their Effects on Survey Estimates". The dissertation was written under the supervision of Professor Frauke Kreuter of the University of Maryland.
Prize winners 2012
Workplace heterogeneity and the rise of West German wage inequality
15 November 2012
The authors study the role of establishment-specific wage premiums in generating recent increases in West German wage inequality. Models with additive fixed effects for workers and establishments are fit in four distinct time intervals spanning the period 1985-2009.
IAB-Discussion Paper 26/2012
The formation of experts' expectations on labour markets
29 October 2012
Expectations regarding the economic development might be correlated due to various reasons: because individuals use the same public information and similar evaluation methods, and because of social learning or herding amongst peers. We analyse to what extent expectations are driven by herd behaviour, and if it contributes to make expectations more realistic. In a novel survey the CEOs of the local departments of the German Federal Employment Agency report their expectations on unemployment in the short run. In this data we can discriminate between close and less-close peers to overcome the reflection problem and to quantitatively assess answers regarding the initial questions. We find strong evidence for herding in expectation formation. The size of effect is robust across various specifications and remains even when controlling for forecasts from experts external to the survey. The social multiplier approximately doubles the effect of information (signals) included in the model. Compared to counterfactual expectations without herding constructed from the estimates, herding seems to improve the accuracy of the expectations.
IAB-Discussion Paper 25/2012
Skill-biased labor market reforms and international competitiveness
10 October 2012
This paper proposes a multi-industry trade model with integrated capital and goods markets. Labor market imperfections in line with Mortensen and Pissarides (1994) give rise to unemployment and a channel for the government to influence markets through institutional changes. Labor market interventions feedback into the product market through changes in a country's competitiveness. Moreover, the distinction between high- and low-skill workers facilitates the analysis of skill-biased institutional changes that have stronger impact on certain skill groups. The comparative static exercise in this paper shows that high-skilled benefit from low-skill biased labor market reforms through higher wages. Lower labor costs reduce unemployment of the low-skilled and increases the reforming country's competitiveness. One-sided labor market interventions have feedback effects through adjustments at the extensive margin, which affect all workers at home and abroad irrespective of their level of skill. Governments in the non-reforming countries may react to this loss in competitiveness by initiating cooperative labor market reforms instead.
IAB-Discussion Paper 24/2012
Human capital mobility and convergence
24 September 2012
Since the fall of the iron curtain in 1989, the migration deficit of the Eastern part of Germany has accumulated to 1.8 million people, which is over 10 percent of its initial population. Depending on their human capital endowment, these migrants might either - in the case of low-skilled migration - accelerate or - in high-skilled case - impede convergence. Due to the availability of detailed data on regional human capital, migration and productivity growth, we are able to test how geographic mobility affects convergence via the human capital selectivity of migration. With regard to the endogeneity of the migration flows and human capital, we apply a dynamic panel data model within the framework of ß-convergence and account for spatial dependence. The regressions indicate a positive, robust, but modest effect of a migration surplus on regional productivity growth. After controlling for human capital, the effect of migration decreases; this decrease indicates that skill selectivity is one way that migration impacts growth.
IAB-Discussion Paper 23/2012
Do reservation wages react to regional unemployment?
21 September 2012
Reservation wages indicate the wage threshold for which individual workers are inclined to supply their working capacity. In important theoretical approaches it is assumed that this threshold depends on the unemployment rate. If this is true, the variation of reservation wages might be an important force behind the regional 'wage curve', which has been estimated in many empirical studies. Up to now, the connection of regional unemployment with reservation wages has not been tested, since research possibilities depend on survey data which were not available. With the 'Labour Market and Social Security' study (PASS), a new large panel survey in Germany, information on regional reservation wages is available. The empirical analysis with this data opens up the 'black box' of the wage generation process and delivers insights about its determining factors. The analysis is based on job matching and efficiency wage theory which are used to derive a relationship between unemployment and reservation wages.
IAB-Discussion Paper 22/2012
Do literacy and numeracy pay off?
20 September 2012
Is there a reward for basic skills in the German labor market? To answer this question, we examine the relationship between literacy, numeracy and monthly gross earnings of full-time employed workers. We use data from the ALWA survey, augmented by test scores on basic cognitive skills as well as administrative earnings data. Our results indicate that earnings are positively related to both types of skills. There furthermore is no evidence for non-linearity in this relationship and only little heterogeneity when differentiating by sub-groups.
IAB-Discussion Paper 21/2012
Profiles of local growth and industrial change
17 September 2012
In this paper we take a detailed look at the sectoral anatomy of regional growth in German regions over the period 1978-2008. In the aggregate, the German economy is characterized by a secular decline of the manufacturing sector and a rise of the modern service economy. This trend of structural change (Petty's law) by no means occurs uniformly across space, however. Some regions exhibit this trend even at an accelerated pace, while other regions develop their local economic structures against the trend and expand their manufacturing bases. We first develop a novel empirical approach that allows us to categorize all German regions into one out of three groups with 'pro-trend', 'anti-trend' or 'featureless' regional growth. Afterwards we show that the differential exposure to international trade is an important cause of the divergent patterns of local industrial change.
IAB-Discussion Paper 20/2012
Employers' selection behavior during short-time work
17 August 2012
During the recession of 2008-09 Germany experienced a huge decrease in GDP. Employment, however, remained surprisingly stable. The so-called German labor market miracle is often ascribed to the intensive usage of short-time work. Despite the resurgence of this instrument, little is known about the employees affected by it. This paper analyzes whether employers select certain individuals for short-time work, where special focus is given on the effect of human capital.
IAB-Discussion Paper 18/2012
3rd TEMPO Conference on international Migration
31 July 2012
We are seeking contributions on the broad theme of international migration.
Call for Papers
Mothers and Daughters: Heterogeneity of German direct investments in the Czech Republic
27 July 2012
The aim of the paper is to assess the heterogeneity of German affiliates in the Czech Republic and their mother companies in Germany. Applying cluster analysis to firm-level data from the unique IAB-ReLOC survey, we identify four main groups of firms that partition the sample by broad sectoral lines and technological intensity of their operation. More specifically, the principal clusters can be interpreted as: I) High-tech industrial firms; II) Low-tech industrial firms; III) High-tech service providers; and IV) Low-tech service providers. The classification is examined more closely by location, ownership and industry of the firms and in the framework of a probit model. The main result is that there is a significant technological gap between the mothers and their cross-border daughters in industry that cannot be found in the service sector. From this follow implications for technological upgrading on both sides of the border, which are discussed in the concluding section of the paper.
IAB-Discussion Paper 17/2012
The rise of the East and the Far East
10 July 2012
The authors analyze the effects of the unprecedented rise in trade between Germany and 'the East' - China and Eastern Europe - in the period 1988-2008 on German local labor markets. Using detailed administrative data, they exploit the cross-regional variation in initial industry structures and use trade flows of other high-income countries as instruments for regional import and export exposure. The authors find that the rise of 'the East' in the world economy caused substantial job losses in German regions specialized in import-competing industries, both in manufacturing and beyond.
IAB-Discussion Paper 16/2012
Assortative matching through signals
29 June 2012
The matching of likes is a frequently observed phenomenon. However, for such assortative matching to arise in a search model, often implausibly strong conditions are required. This paper shows that, once signals are introduced, a search model can generate even perfect assortative matching under weak conditions: supermodularity of the match production function is a necessary and sufficient condition. It simultaneously drives sorting and functions as a single-crossing property ensuring that agents choose truthful signals. The information thereby transmitted allows agents to avoid all unnecessary costs of random search, which creates in effect an almost frictionless environment. Hence the unique separating equilibrium in the model achieves nearly unconstrained efficiency despite frictions.
IAB-Discussion Paper 15/2012
Volume of employment once more at a record high
21 June 2012
The number of performed and paid working hours of persons in employment in Germany rose in the first quarter of 2012 to more than 15 billions.
See table: Average working time and its components in Germany
Asymmetric information and overeducation
18 June 2012
We consider an economy where production may use labor of two different skill levels. Workers are heterogeneous and, by investing in education, self-select into one of the two skills. Ex-ante, when firms choose their investments in physical capital, they do not know the level of human capital prevailing in the labor market they will be active in. We prove existence and constrained inefficiency of competitive equilibria, which are always characterized by overeducation. An increase in total expected surplus can be obtained by shrinking, at the margin, the set of workers investing in high skill. This can be implemented by imposing taxes on the cost of investing in high skill or by imposing a progressive labor earning tax.
IAB-Discussion Paper 14/2012
IAB annual report 2011
08 June 2012
Despite the Euro crisis, the German labour market showed itself to be extraordinarily robust in 2011. Employment reached record levels while unemployment fell even further. As gratifying as these developments were however, they definitely presented IAB's research departments with new challenges. The report contains detailed information on developments in substance, personnel and organisational matters, and provides an overview of key projects, publications, presentations, events and the advisory services that IAB has provided in this year to academic and professional circles.
IAB annual report 2011
Regional disparities in an extended EU
05 June 2012
Within the European Union, economic power, income and employment diverge extensively – both within and also between Member States. The reduction of this gradient is the declared political goal at the European and national levels. Although economic regional research has embraced this topic, hardly any reliable findings are available as to the extent of the effect that eastwards expansion and the economic integration of the EU have had on the development of regional disparities. Moreover, to what extent and why the development of employment at various different levels of qualification is different from region to region is still largely unexplained. Based on a wide collection of data and econometric analyses, Friso Schlitte's study "Regional Disparities and Growth in the European Union" makes an important contribution to closing these gaps in research. He demonstrates the following for example: The presence of a large number of highly qualified persons also raises the labour market chances of persons with low qualifications in the region. However, the stricter the separation of the scope of duties of differing qualification levels within an enterprise, the less favourable the development of the opportunities for persons with low qualifications.
The author Friso Schlitte is a Senior Researcher at the Hamburg Instute of International Economics (Hamburgisches WeltWirtschaftsInstitut, HWWI).
Examining the roots of homelessness: The impact of regional housing market conditions and the social environment on homelessness in North Rhine-Westphalia, Germany
09 May 2012
Despite large-scale governmental efforts to combat homelessness, homelessness rates can only be reduced but not eliminated completely by the measures usually applied. Hence, there is an obvious need to investigate additional factors which contribute to homelessness and gain insights on how to further reduce homelessness.
IAB-Discussion Paper 13/2012
Income: Do sons have similar ones to their fathers?
08 May 2012
From dishwasher to millionaire – hardly anyone manages that, either in the United States or Germany. And it is even more difficult for people whose parents already had low earnings. Social advancement from the parental generation to that of the child seldom takes place. That is one of the central research results presented by the book "Inter- and intragenerational economic mobility". The author, Daniel D Schnitzlein, examines the causes of economic mobility, comparing Germany to the United States and Denmark. He also analyses the economic mobility of siblings as well as the influence of cultural backgrounds. However Dr Schnitzlein does not only take a comparative look beyond Germany's borders: his research also revolves around the development of wage mobility in the eastern and western parts of Germany itself, concentrating on mobility within a generation.
The author Daniel D Schnitzlein completed his doctorate at the University of Erlangen-Nuremberg and is currently a researcher on the SOEP longitudinal study (socioeconomic panel) at the German Institute for Economic Research (DIW) in Berlin.
Worker flows in Germany: Inspecting the time aggregation bias
03 May 2012
This paper analyzes the importance of time aggregation in the measurement of worker flows by exploiting daily information from German administrative data. Time aggregation caused by comparing monthly labor market states leads to an underestimation of total worker flows by around 10%.
IAB-Discussion Paper 12/2012
The labour markets in Finland, Germany, Latvia, Norway, and Sweden 2006-2010
16 April 2012
Via the International Labour Market Forecasting Network, forecasters of the public employment services or comparable institutes from the Nordic countries as well as Germany and Austria exchange their analyses about the current and future development of the national economies and labour markets. This report documents some of the discussions during the past few years. Finland, Germany, Latvia, Norway, and Sweden exemplify their starting conditions and labour market reactions to the Great recession in 2008 and 2009.
Effectiveness of further vocational training in Germany
10 April 2012
Further vocational training for the unemployed aims at enhancing their job prospects. This paper analyses the effectiveness of such subsidized training programmes for means-tested unemployment benefit recipients in Germany.
IAB-Discussion Paper 10/2012
Between familial imprinting and institutional regulation
29 March 2012
In this paper, I examine how family related employment interruptions for women in the FRG (Federal Republic of Germany) and the GDR (German Democratic Republic) looked like in the period prior to German reunification. Furthermore, I investigate how career interruptions developed after the German reunification in the old and new states and whether a convergence of re-entry behaviour can be observed. Following research questions are addressed: Which factors are more important: attitudes towards the employment of mothers, which were transferred through socialisation in childhood and adolescence, or institutional arrangements shaped by parental leave regulations? Based on data from the IAB ALWA study ('Working and Learning in a Changing World'), the results show that even twenty years after the German reunification, significant differences between women in East and West Germany are found to exist with respect to family related employment interruptions.
IAB-Discussion Paper 9/2012
Journal for Labour Market Research
28 March 2012
From this edition onwards, the Journal will operate under the main title "Journal for Labour Market Research" while "Zeitschrift für ArbeitsmarktForschung" will remain as the subtitle; in addition the layout has been slightly altered. With this, we wish to send the signal to the international scientific community that the Journal is intended to play a more important role on the international stage than previously but without disowning its German roots.
Volume 45 - Number 1 - March 2012
International trade, technical change and wage inequality in the U.K. economy
21 March 2012
This paper examines the joint impact of international trade and technical change on U.K. wages across different skill groups. Results show that real wages of skill groups are driven by the sector bias of price change and TFP growth of selected sectors of production. Furthermore, for each year 1970-2005 we estimate the share of the three different skill groups on added value which indicate structural change in the U.K. economy. Empirical results show a structural change in the U.K. economy by the declined share of low-skilled workers and the increased share of medium-skilled and high-skilled workers over the years.
IAB-Discussion Paper 8/2012
International trade and collective bargaining outcomes
21 March 2012
In theoretical trade models with variable markups and collective wage bargaining, export exposure may reduce the exporter wage premium. We test this prediction using linked German employer-employee data from 1996 to 2007. To separate the rent-sharing mechanism from assortative matching, we exploit individual worker information to construct profitability measures that are free of skill composition. We find that rent-sharing is less pronounced in more export intensive firms or in more open industries. The exporter wage premium is highest for low productivity firms. In line with theory, these findings are unique to the subsample of plants covered by collective bargaining.
IAB-Discussion Paper 7/2012
Are real entry wages rigid over the business cycle?
16 March 2012
So far little empirical evidence exists on how real wages of newly hired workers react to business cycle conditions. This paper aims at filling this gap for Germany by analyzing the cyclical behavior of real wages of newly hired workers while controlling for 'cyclical upgrading' and 'cyclical downgrading' in employee/employer matches over the cycle.
IAB-Discussion Paper 6/2012
Wage bargaining in Germany
08 March 2012
The analysis relies on rich German establishment data and reveals new insights in the institutional machinery of wage bargaining: While the existence of such clauses is related to higher wages (11 %), their application results in wages cuts of roughly the same size. Regarding works councils the results suggest that they are able to prevent negative wage effects of opening clauses on average.
IAB-Discussion Paper 5/2012
Foreign direct Investment and search unemployment
01 March 2012
This paper proposes a simple multi-industry trade model with search frictions in the labor market. Unimpeded access to global financial markets enables capital owners to invest abroad, thereby fostering unemployment at the extensive industry margin. Whether a country benefits from FDI in terms of unemployment depends on the respective country's net-FDI, measured as the difference between in- and outward FDI. The derived FDI and unemployment nexus is tested employing macroeconomic data for 19 OECD countries on unemployment, FDI, and labor market institutions. Results support the model in that net-FDI is robustly associated with lower rates of aggregate unemployment.
IAB-Discussion Paper 4/2012
The time trend in the matching function
29 February 2012
We revisit the puzzling finding that labour market performance appears to deteriorate, as suggested by negative time trends in empirical matching functions. We investigate whether these trends simply arise from omitted variable bias. Concretely, we consider the omission of job seekers beyond the unemployed, the omission of inflows as opposed to stocks, and the failure to account for vacancy dynamics. We first build a model of all labour market flows and use it to construct series for these flows from aggregate data on the U.S. labour market. Using these series, we obtain a measure for employed and non-participating job seekers. When we thus include all job seekers, the estimated time trend remains unchanged. We similarly obtain measures for inflows into unemployment and vacancies.
IAB-Discussion Paper 3/2012
Dynamics on the European labour markets: Are insecure contracts the price of more employment?
13 February 2012
In many EU countries labour market policy moved in the 1990s towards a stronger employment orientation. We address the question of whether European labour markets have become more inclusive after a period of intense labour market reforms and just before the adverse effects of the economic crisis took effect. We do this for the following countries: Belgium, Czech Republic, Denmark, France, Germany, Great Britain, Hungary, Italy, Poland and Spain. Based on ELFS data we estimate the probability of someone who was either unemployed or inactive, making the transition a) to any form of employment and b) that the transition has been made to permanent compared to a temporary or marginal part-time contract. Our results show that the chances to make a transition into employment have increased on average across all countries although there are considerable country variations. In most - but not all - countries, however, increasingly inclusive labour markets are associated with a reduction in job quality, as measured by contract type.
IAB-Brief Report 25/2011
Wage growth and career patterns of German low-wage workers
18 January 2012
Using administrative linked employer-employee data from Germany, this paper analyses the real wage growth and career patterns of full-time employed low-wage workers between 2001 and 2006.
IAB-Discussion Paper 1/2012
Regional unemployment disparities in Germany
10 January 2012
Disparities in the regional unemployment rates in Germany are more distinct, the smaller the regional level of observation. Furthermore, the adjustment of smaller spatial units to labour market shocks is found to work predominantly through labour mobility and less through the unemployment and the participation rate. The speed of adjustment in the unemployment rate does instead not vary substantially between Federal States and districts. The distribution of regional unemployment rates thereby displays strong persistence and does not show convergence towards the national unemployment rate, but convergence towards the region-specific means. Labour market adjustment mechanisms work efficient as labour demand shocks disappear within only a few years. The estimates additionally show that substantial migration and commuting activities are responsible for this efficiency.
The immigrant wage gap in Germany
04 January 2012
Using employment register data, the study compares the outcomes of male foreign workers from different East and West European countries who entered the German labor market between 1995 and 2000 with those of male German workers.
Unemployment and occupational mobility at the beginning of employment career in Germany and the UK
12 December 2011
The beginning of one's employment career is often associated with phases of unemployment. The author argues that unemployment has different implications for different educational groups as regards future employment careers depending on institutional settings in the UK and Germany. While search and matching models imply that an unemployment phase might be used for an active job search and might therefore result in a better position, human capital and signalling theory predict status losses.
IAB-Discussion Paper 25/2011
Job search via social networks
17 November 2011
Using a search theoretical model, the authors analyse the effects of the information flow via social networks (friends, relatives and other personal contacts) by comparing monetary and non-monetary outcomes in obtaining jobs via networks versus formal methods.
IAB-Discussion Paper 23/2011
The gender gap of returns on education across West European countries
13 October 2011
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
04 October 2011
The aim of this paper is to formalise a two-country model of trade liberalisation and technical change with heterogenous firms and search-and-matching frictions in the labour market. By considering different sectors and factors of production we allow for comparative advantages and study the trade and technology effects within and between sectors on wages and employment of skilled and low-skilled workers. Technical change together with inter-sectoral trade has distributional consequences across the labour force, favouring the skilled against the low-skilled workers. Intra-sectoral trade counteracts as it increases the demand for low-skilled workers, too. The overall effects on wages and employment of skilled and low-skilled workers depend on the extent of technical change, inter-sectoral trade and intra-sectoral trade.
IAB-Discussion Paper 19/2011
Do small labor market entry cohorts reduce unemployment?
13 September 2011
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
01 August 2011
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
30 June 2011
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?
28 June 2011
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?
24 May 2011
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
11 May 2011
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
21 April 2011
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?
14 April 2011
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
07 April 2011
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?
16 March 2011
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
15 March 2011
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
15 March 2011
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?
03 March 2011
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
01 March 2011
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
17 February 2011
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
14 February 2011
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
26 January 2011
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.
See table: Average hours worked and its components in Germany
25 January 2011
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
24 January 2011
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.
Using support vector machines for generating synthetic datasets
24 January 2011
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.
The German job vacancy survey
24 January 2011
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.
Low-wage jobs: A means for employment integration of the unemployed?
20 January 2011
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
06 December 2010
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
15 November 2010
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
11 November 2010
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”?
10 November 2010
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.
IAB Brief Report 19/2010
Migration, integration, and the labor market after the recession in Germany
09 November 2010
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.
Parental risk attitudes and children's secondary school track choice
19 October 2010
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
28 September 2010
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
09 September 2010
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.
Ethnicity and educational achievement in compulsory schooling
08 September 2010
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.
International comparison: Business start-ups in times
24 August 2010
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
24 August 2010
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?
17 August 2010
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
17 August 2010
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
05 August 2010
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
02 August 2010
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
20 July 2010
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.
Economic uncertainties in the family
13 July 2010
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.
Wages, employment and tenure of temporarily subsidized workers: Does the industry matter?
12 July 2010
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
01 July 2010
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".
IAB info platform Reservation wages of the unemployed
The decline in full-time work is slackening off
23 June 2010
The number of persons in full-time work dropped in the first quarter of 2010 by 318,000 or 1.4 per cent as against the corresponding quarter of the previous year. The decline in the third and fourth quarters of 2009 at 1.7 per cent had been even greater in comparison to the year before. For the first time since the beginning of the economic crisis, average working time increased perceptibly.
See table: development of average working time in Germany and its components
Ethnic concentration and language fluency of immigrants
14 June 2010
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
04 June 2010
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
20 May 2010
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.
Only a few women reach top positions
18 May 2010
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)
17 May 2010
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
16 February 2010
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
16 February 2010
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.
IAB-Discussion Paper 6/2010
The use of social networks in recruiting processes from a firm's perspective
11 February 2010
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
08 February 2010
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
02 February 2010
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.
Determinants of lifetime unemployment
28 January 2010
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
19 January 2010
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
17 December 2009
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
02 December 2009
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