Abstract
In Germany there are considerable disparities between regional labour markets. As local labour market conditions influence the success of labour market policy measures, they must be taken into account when the performance of employment agencies is compared. In its system of management by objectives, the Federal Employment Agency therefore uses classifications of employment agency districts based on a specially designed classification approach. This method is a quite powerful combination of regression and cluster analysis, because the types identified are relatively homogeneous not only with respect to the classification variables but also with respect to the response variable in the regression step. The method can be used to address a wide range of research questions.
Highlights
Introduction and backgroundGermany’s labour market has seen positive development in recent years compared to other European states
As local labour market conditions influence the success of labour market policy measures, they must be taken into account when the performance of employment agencies is compared
9.9 neighbouring employment agency districts weighted by the shares of individuals commuting out of their own district a The seasonal span was included in the cluster analysis as a logarithm to avoid outlier problem into employment is a difficult task, which can be seen not least in the high specific unemployment rates of this group
Summary
Germany’s labour market has seen positive development in recent years compared to other European states Despite this favourable trend, regional economic disparities in Germany remain considerable. The classification variables are not selected arbitrarily or on the basis of expert opinions but are based on empirical findings This ensures that the groups are differentiated with respect to the response variable in the regression step. As will be shown later, the types identified discriminate nearly as good with respect to the response variable as do all the exogenous variables together This response variable, the integration rate, is not included among the classification variables, because it is among those variables that are later used to assess the performance of an agency. The details of the classification method are explained, taking the latest classification of employment agencies as an application, and the classification results are presented
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