Job Stability, Mobility and Labour Market Restructuring. Evidence from German Microdata

Abstract

The paper analyses the change of job stability and its determinants in the course of time by presenting some empirical evidence from Germany. Drawing upon event history data from the German Federal Labour Office insurance accounts and employing Cox Proportional Hazard Rate Models, we test six core hypotheses on labour market restructuring and its impacts on job stability. Our analysis suggests that during the transition to service society between the 1980s and the 1990s some kind of 'restructuring' of the German labour market has taken place that has simultaneously led to an increasing polarisation and to an increasing levelling out of individual employment chances and risks. Key words: Job Stability, Flexibility, Germany, Event History Analyses 1. Introduction There can be no doubt that fundamental social, economic, technological, and political changes have taken place during the last two decades. Those changes are often summarized, for example, in terms like globalisation (c.f. Reich 1992) or individualisation (c.f. Beck/Beck-Gernsheim 2002). It can be suggested that these changes have had a significant impact on employers' as well as employees' behaviour. Therefore, the transition from industrial to service economy1 and its impact on modern societies and individual employment histories has received considerable attention for at least 20 years. What seems to be indisputable is that all these fundamental changes caused an increasing demand for of both employers as well as employees. However, is a multi-dimensional phenomenon as we can see, for example, with regard to the of the allocation of labour within firms: On the one hand we can distinguish internal from external and on the other hand there are differences between quantitative and qualitative (c.f. Goudswaard/Nanteuil 2000); further on wage could be an additional dimension (c.f. OECD 1989). In addition the of labour market actors is determined by the institutional framework they are embedded in. As Hall and Soskice (2001) have pointed out we can distinguish market and market as two ideal types of production regimes because of their fundamental differences in the institutional organisation for example in labour market regulation or educational systems. Whereas the United States are often described as the prototype of market Germany is suggested to be the prototype of market economies. However, due to global changes the traditional German system of flexibility has become under pressure during the last two decades and there have been some efforts to de-regulate labour market institutions for example by lowering the dismissal protection in the mid-1980s. But not least because of the path dependencies of institutions the German labour market is still highly regulated compared to liberal market economies (Fuchs/Schettkat 2000). Thus, the paper tries to answer the following questions by analysing the evolution of job stability and its determinants: How have employers and employees in Germany adapted to fundamental changes that have occurred since the 1970s? How did the increasing demand for affect employment histories of men and women and how did job stability and labour market mobility processes as important outcomes of individual employment histories have changed in a coordinated market economy like Germany during the transition to service society? Based on a detailed theoretical argumentation section 2 will develop six hypotheses about the re-structuring of the labour market and the re-distribution of employment chances and risks in service society that should be tested in the course of he following analyses by presenting some empirical evidence from Germany. section 3 will introduce the data and methods that will be used in these investigations. …