The East German wage structure in the transition to a market economy

An important question for the development of the East German labour market in the transition to a market economy is whether wage differentials by qualification, industry or region which were relatively small in the former GDR adjust to those in market economies which are more in line with differences in productivities and economic conditions. We estimate empirical earnings functions to quantify the contribution of various important factors shaping the earnings distribution in the East German transition process. Estimation is based on the first six waves of the Labour Market Monitor which is a representative panel data set of the East German workingage population covering the period 1990 to 1992. The specification of the estimated earnings functions is motivated by the various hypotheses of the development of the East German wage structure in the transformation process. Although we do find some similiarities with the existing wage structure in West Germany, the East German wage structure still differs in some important dimensions. --

To recruit skilled workers or to train one's own? : vocational training in the face of uncertainty as to the rate of retention of trainees on completion of training

"The article deals with the impact of uncertainty as regards the retention of trainees completing vocational training programmes on firms' training behaviour. As an alternative to vocational training, the external recruitment of skilled workers is considered via an opportunity costs approach. The uncertainty is traced back to staff turnover, considerable product market competition and changing skill requirements. Indicators of these causes of uncertainty are examined as to their impact on vocational training and the recruitment of skilled workers with a fractional logit model, using a seemingly unrelated cluster-adjusted sandwich estimator with data from the IAB Establishment Panel. There is no confirmation that the presumed correlations exist in manufacturing. A negative correlation is identified in the service sector between high staff turnover coupled with rapid change in the skills required on the one hand, and commitment to vocational training on the other, while there is a positive link with the external recruitment of skilled workers. This is interpreted as an indication that uncertainty with regard to retention after training can go some way towards explaining the growing gap between employment and vocational training in the tertiary sector." (Author's abstract, IAB-Doku) ((en)) Additional Information Kurzfassung (deutsch) Executive summary (English)Betrieb, Personalpolitik, betriebliche Berufsausbildung, Ausbildungsverhalten, Auszubildende, Ausbildungsabsolventen, beruflicher Verbleib, zwischenbetriebliche Mobilität, Arbeitsplatzwechsel, Qualifikationsanforderungen, Personaleinstellung, Fachkräfte, verarbeitendes Gewerbe, Dienstleistungsbereich, Bildungsökonomie, IAB-Betriebspanel

Interfirm Job Mobility of Two Cohorts of Young German Men 1979 - 1990: An analysis of the (West-)German Employment Statistic Register Sample concerning multivariate failure times and unobserved heterogeneity

The OECD (1993) has documented that the majority of workers in industrialised countries can look forward to finding a stable employment relationship. However new entrants into the labor force experience high turnover. Promoting institutions which support longer tenures and worker participation (or ''voice`` in the firm) utilize strategies to encourage enterprise and employee efforts in skill formation and training. The results of the OECD (1993) study show that attachments between employee and employer are more likely to endure for Japanese, French and German workers. Furthermore Germany has the highest share of young new recruits who received any formal training from their employer. In Germany, 71.5 % of young new recruits were trained at any job within 7 years after leaving school, whereas in the U.S. only 10.2 % of young new recruits were similarly trained (cf. OECD 1993, 137). It is sometimes assumed that employment protection policies have been exogenously imposed and thus probably impair efficiency. However, research on the micro-economics of labor markets has shown that employers may be interested in long-term employment relationships (cf. Levine 1991). Here, the job training model focusing on the importance of human capital investment, specifically the job shopping and matching model stressing the process of information gathering through employment experience should be mentioned. In such models employment protection legislation has not only desirable distributional effects but also help to ensure efficient outcomes. Therefore, it is important to assess the relevance of micro- economic theories empirically. This paper provides an empirical analysis of job durations in Western Germany using information from two cohorts of new entrants to the labor force documented in the (West-)German employment statistic register sample (cf. Bender and Hilzendegen 1996). The appropriate empirical technique to study job length is event history or survival analysis. In labor market research, survival analysis has primarily focused on explaining the length of unemployment spells. Application of this technique to employment is less common 1 , because huge longitudinal data sets are needed. Apart from testing hypotheses about the effect of personal characteristics and labor demand variables (e.g. firm size and industry affiliation), we will assess the influence of heterogeneity of the members of the two cohorts on their duration profile. The applied model and estimation method allow for unobserved heterogeneity and correlation between the clustered failure times of one employee as well as for right-censored spells. Our analysis is not restricted to the beginning of the working life of the employees. The individual retirement decision is affected by employment protection and early retirement regulations which differ widely between the firms. The respective data are missing in the employment statistic register, so that the retirement decision cannot be modelled explicitly

Job and Worker Turnover in German Establishments

We use a simple regression-based approach to measure the relationship between employment growth, hirings and separations in a large panel of German establishments over the period 1993-2009. Although the average level of hiring and separation is much lower in Germany than in the US, as expected, we find that the relationship between employment growth and worker flows in German establishments is very similar to the behaviour of US establishments described in Davis, Faberman & Haltiwanger (2006, 2011), and quite different to the behaviour of French establishments described in Abowd, Corbel & Kramarz (1999). The relationship is very stable over time, even during the most recent economic crisis, and across different types of establishment.job turnover, worker turnover, hirings and separations

Return times for Stochastic processes with power-law scaling

An analytical study of the return time distribution of extreme events for stochastic processes with power-law correlation has been carried on. The calculation is based on an epsilon-expansion in the correlation exponent: C(t)=|t|^{-1+epsilon}. The fixed point of the theory is associated with stretched exponential scaling of the distribution; analytical expressions, valid in the pre-asymptotic regime, have been provided. Also the permanence time distribution appears to be characterized by stretched exponential scaling. The conditions for application of the theory to non-Gaussian processes have been analyzed and the relations with the issue of return times in the case of multifractal measures have been discussed.Comment: 9 pages, 5 figures, revtex

The Takeover and Selection Effects of Foreign Ownership in Germany : An Analysis Using Linked Worker-Firm Data

We use a linked employer-employee data set from Germany to estimate the wage effect of foreign-affiliates in East and West Germany. In addition, the wage effects of the large number of West German affiliates which are located in East Germany are also considered. The implemented techniques allow us to control both for worker- and plant-level unobserved components of earnings. We find large selection effects both in terms of worker and firm unobserved components of wages. The selection effect is larger for East German plants. Once it is taken into account, the genuine takeover effect is small and in some cases insignificantly different from zero. In contrast to the selection effect, the takeover effect is slightly larger in West Germany, where it amounts to 2.7 %. -- Mit einem deutschen kombinierten Betriebs-Beschäftigten-Datensatz wird analysiert, ob Betriebe im ausländischen Eigentum höhere Löhne zahlen. Auch werden Lohndifferentiale von ostdeutschen Betrieben in westdeutschem Eigentum untersucht. Die verwendeten Schätzmethoden erlauben es, für jeweils unbeobachtbare Personen- und Betriebsheterogenitäten zu kontrollieren. Bezüglich beider Komponenten werden große Selektionseffekte gefunden, wobei diese für ostdeutsche Betriebe größer sind. Der verbleibende (wahre) Übernahmeeffekt ist gering und teilweise nicht signifikant von Null verschieden. Im Gegensatz zum Selektionseffekt ist der Übernahmeeffekt etwas größer für Westdeutschland, wo er 2,7% beträgt.foreign ownership,wages,linked employer-employee data

A Note on the Determinants and Consequences of Outsourcing Using German Data

Using German data from the Institute for Employment Research Establishment Panel, this paper constructs two main measures of outsourcing and examines their determinants and consequences for employment. There are some commonalities in the correlates of the two measures of outsourcing, as well as agreement on the absence of adverse employment effects across all industries. For one specification, however, some negative effects are reported for manufacturing industry, balanced by positive effects for the services sector for another. But there are no indications of survival bias. This is because the association between outsourcing and plant closings is predominantly negative, albeit poorly determined.outsourcing, organizational change, employment change, plant closings, value added

Arbeitsmarktpolitische Maßnahmen und Arbeitslosigkeit im internationalen Vergleich

"Eine international vergleichende Untersuchung der Beziehung der Offenen-Stellen-Quote und der Arbeitslosenquote, der sogenannten Beveridge-Kurve, einerseits und der Ausgaben für Maßnahmen der aktiven Arbeitsmarktpolitik andererseits haben Jackman, Pissarides und Savouri (1990) auf der Basis von Daten der OECD durchgeführt. Diese makroökonomische Studie ist auch als Alternative zu den in jüngster Zeit dominierenden mikroökonomischen Arbeiten anzusehen, bei denen aber die Erfassung des wirtschaftlichen und sozialen Umfelds der Maßnahmenteilnehmer nicht möglich ist. In dem Beitrag wird zunächst eine Typisierung verschiedener Formen der Arbeitslosigkeit mit dem Schwerpunkt auf der hysteretischen Arbeitslosigkeit vorgenommen. Dabei können die Wirkungen der aktiven Arbeitsmarktpolitik theoretisch analysiert werden. Danach wird für die einzelnen Mitgliedsländer der OECD im Rahmen einer kombinierten Zeitreihen-Querschnittsanalyse multivariat überprüft, ob sich in den 70er und 80er Jahren die Beveridge-Kurve verlagert hat und ob sich Veränderungen der Lage der Beveridge-Kurve auf einen unterschiedlichen Einsatz arbeitsmarktpolitischer Instrumente zurückführen lassen." (Autorenreferat)Arbeitsmarktpolitik - internationaler Vergleich, Arbeitsmarktpolitik - Erfolgskontrolle, Arbeitslosigkeitsbekämpfung, Beveridgekurve, Arbeitslosenquote, OECD, Industrieländer, Bundesrepublik Deutschland