In search of turbulence Labour market mobility and job stability in Germany

Abstract

In the course of the transition from an industrial to a service economy, fundamental changes in the functioning of the labour market are expected to occur. A number of authors assert that these changes will result in an increasing external-numerical flexibility of firms which is assumed to affect labour market processes in terms of a generally higher labour market mobility and a decreasing employment stability (‘high-velocity labour market’). This paper examines the hypothesis of a growing importance of numeric-external flexibility, applying simple descriptive statistical methods to the event-history data of the IAB Employment Subsample for the West German labour market covering the years 1976 to 1995. There is no evidence for an acceleration of labour market ‘churning’, but rather for a stagnation or even slight decline of labour market mobility since the 1970s. Furthermore, job stability has not decreased over time, as one might have expected, but rather increased. In spite of these general results it might be conceivable that service-sector jobs have become more unstable but that this effect is cancelled out by a considerable stabilization of jobs in manufacturing. It turns out, however, that there is no evidence for developments in the ‘old’ and ‘new’ labour markets to contrast in such a simple way. Services display divergent trends when broken down by sub-sectors; jobs in some of them have stabilized while there is no or an opposite change in others.