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    Labour hoarding in Germany

    02 July 2014

    During the crisis (2008-09) Germany experienced a huge decrease in GDP. Employment, however, remained surprisingly stable. A whole strand of literature has aimed at quantifying the contribution of short-time work to the German labour market miracle. In the course of this literature we estimate the treatment effect of short-time work on employment at establishment level using a dynamic propensity score matching approach. The analysis is based on data from the IAB Establishment Panel combined with administrative data on short-time work establishments from the Federal Employment Agency. Our results do not indicate any treatment effect of short-time work on employment.

    IAB-Discussion Paper 17/2014


    Forecasting with a mismatch-enhanced labor market matching function

    27 June 2014

    This paper investigates the role of mismatch between job seekers and job openings for the forecasting performance of a labor market matching function. In theory, higher mismatch lowers matching efficiency which increases the risk that the vacancies cannot be filled within the usual period of time. We investigate whether and to what extent forecasts of German job findings can be improved by a mismatch-enhanced labor market matching function. For this purpose, we construct so-called mismatch indicators that reflect regional, occupational and qualification-related mismatch on a monthly basis. In pseudo out-of-sample tests that account for the nested model environment, we find that forecasting models enhanced by the mismatch indicator significantly outperform their benchmark counterparts for all forecast horizons ranging between one month and a year. This is especially pronounced in the aftermath of the Great Recession where a low level of mismatch improved the possibility of unemployed to find a job again.

    IAB-Discussion Paper 16/2014 


    Effectiveness of data correction rules in process-produced data

    17 June 2014

    The use of process-produced data plays a large and growing role in empirical labor market research. To address data problems, previous research have developed deductive correction rules that make use of within-person information. The authors test data reliability and the effectiveness of different correction rules for information about educational degrees as reported in German register data.

    IAB-Discussion Paper 15/2014 


    Economic failure and the role of plant age and size

    12 May 2014

    This paper introduces a large-scale administrative panel data set on corporate bankruptcy in Germany that allows for an econometric analysis of involuntary exits where previous studies mixed voluntary and involuntary exits. Approximately 83 percent of all bankruptcies occur in plants with no more than 10 employees, and 61 percent of all bankrupt plants are not older than 5 years. The descriptive statistics and regression analysis indicate substantial negative age dependence with respect to bankruptcy risk but confirm negative size dependence for mature plants, only. Our results corroborate hypotheses stressing increasing capabilities and positional advantage, both predicting negative age dependence with respect to bankruptcy risk due to productivity improvements. The results are not consistent with the theories explaining age dependence via imprinting or structural inertia.

    IAB-Discussion Paper 13/2014


    The hidden winners of renewable energy promotion

    07 May 2014

    In light of Germany´s transition approaches towards a sustainable energy system this paper examines differences of employment structure and wage differentials between renewable energy establishments and their sector peers. To do so, we have developed a novel data set by linking company-level information from the German Renewable Energy Federation with establishment-level data of the IAB Establishment History Panel. According to our descriptive evidence, there are significant differences in wages and in several other characteristics. Looking at the top-four renewable energy sectors, our estimates show that human capital and other establishment- level characteristics mostly explain the wage differential among manufacturers and energy providers. However, we find a persistent 'renewable energy wage premium' of more than ten percent in the construction installation activities and the architectural and engineering services. We interpret this premium as a positive indirect effect of the promotion of renewable energies for the benefit of employees in renewable energy establishments within these two sectors.

    IAB-Discussion Paper 12/2014



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