Unemployment In Germany Research Articles

Spillover effects of economic policy uncertainty on adult and youth unemployment

Abstract The paper studies the effects of foreign (the US, the UK and the Chinese) and domestic economic policy uncertainty (EPU) shocks on unemployment in Germany, France, Italy and Spain. The analysis is run separately for the rates of adult and youth unemployment. Impulse responses derived from vector autoregressive models show that the magnitudes of the responses of the adult and youth segments of the labour market are quite different. Following an uncertainty shock, the youth unemployment rate increases significantly more than the adult unemployment rate. This is the case for France, Italy and Spain. The German labour market seems to be resistant to foreign (except Chinese) and domestic EPU shocks, while the remaining labour markets, foremost the Spanish and Italian ones, are susceptible to uncertainty shocks, especially to the US EPU shocks.

Semiparametric analysis of recurrent discrete time data with competing risks

The regression analysis of the cumulative incidence function on recurrent discrete time data with competing risks has not been widely investigated. We propose semiparametric analysis for regression modelling of the cumulative incidence function for recurrent discrete time competing risks data. The maximum likelihood inferences are developed for the estimation of the model parameters in a discrete time competing risks model, which are based on a working independence likelihood. We derive the sandwich variance estimator to account for correlations between multiple discrete times within each subject. Simulation studies show that the procedures perform well. The proposed methods are illustrated with two applications, a study of contraceptive use in Indonesia and data on unemployment in Germany.

Covid 19 and unemployment in Germany: Corporate and government strategies

This article provides the guidance and literature on the benefits of German corporate and Government decisions through a correlational analysis between Covid 19 and unemployment rate, therefore, it was necessary to test the hypothesis that there is a low correlation between the above variables and show that the unemployment rate is low due to German corporate and government policies and strategies. The methodology which was used, is descriptive and correlational, because it was required to know the influence of COVID 19 and the unemployment rate of German companies and describe the German corporate and government strategies due the pandemic. It was concluded that COVID 19 phenomena in Germany doesn’t affect unemployment rate significatively. The German government and corporate policies, as well as, guidelines in companies have been efficiently.

Perspektiven zum B\xfcrgergeld

AbstractThe Hartz IV labour market reform in 2005 triggered a substantial reduction in unemployment in Germany. At the same time, it reduced social welfare for the long-term unemployed and increased uncertainty for the employed. The proposed reform by the new government (“Bürgergeld”) will adjust the German welfare system moderately towards more social insurance. This article argues that the associated negative employment effects can be minimised by requiring appropriate participation from unemployed and by preventing new paths to early retirement. In addition, the article further discusses potential reforms to better reconcile employment incentives and social insurance.

Unemployment and its scarring effect on wages in Germany: evidence from linked employer-employee data

PurposeAssess and compare scarring effects of unemployment in Germany to other countries and to consider firm heterogeneity.Design/methodology/approachThe author uses linked employer-employee data to analyze the effect of unemployment and its duration on future wages in Germany. Using administrative data on workers and firms in Germany and considering registered and unregistered unemployment episodes, the results show long-lasting wage losses caused by unemployment incidences. Furthermore, the estimations indicate that unemployment duration as well as selectivity into firms paying lower wages is of particular relevance for the explanation of wage penalties of re-employed workers.FindingsUnemployment causes massive and persistent wage declines in the future, which depend on the unemployment duration. Furthermore, reduced options of unemployed workers and selectivity in firms contribute to a large part of unemployment scarring.Practical implicationsFindings are relevant for current debates on unemployment and can help design measures to avoid huge costs of unemployment.Originality/valueThis paper analyses long-term unemployment scarring by considering not only unemployment duration but also selectivity in firms and its effect on the scarring effect.

Inequality and Unemployment in Germany: Perception and Reality

Inequality and Unemployment in Germany: Perception and Reality

The cumulative disadvantage of unemployment: Longitudinal evidence across gender and age at first unemployment in Germany.

Unemployment is an important predictor of one's future employment success. Yet, much about the endurance of unemployment effects on workers' careers remains poorly understood. Our study complements this knowledge gap by examining the rate of recovery in the quality of careers following an unemployment spell among a representative sample of previously unemployed workers with different socio-demographic characteristics in Germany. We apply a new dynamic measure that quantifies the quality of binary sequences, distinguishing between "good" (i.e., employment) from "bad" labor force status activities (i.e., unemployment and inactivity). We use longitudinal data from the German Socio-Economic Panel (GSOEP) before the Great Financial Recession over the period 1984-2005 and deploy a series of hybrid models that control for unobserved heterogeneity. We find a non-linear recovery process after unemployment across gender and age groups. That is, after a period of recovery, career quality worsens. Least impacted are men experiencing unemployment when aged between 25-34 years, while men 55-66 have rather stable, though stronger, penalties. Furthermore, we find that recovery processes are contingent upon when respondents experience unemployment.

Persistence of Welfare Receipt and Unemployment in Germany: Determinants and Duration Dependence

AbstractAlthough the German economy managed the last economic recession comparatively well, it suffers from high and stagnating long-term unemployment and benefit receipt. This article is the first to study the duration and determinants of welfare benefit (“unemployment benefit II”) receipt in Germany as a whole, with special attention on duration dependence. The recipients of the means-tested household benefit are not necessarily registered as unemployed, but are, for example, employed with insufficient earnings, in training measures or economically inactive. Due to the heterogeneous situations of welfare recipients, separately studying welfare receipt and unemployment is necessary. By using exceptionally rich administrative data on a 1% random sample of welfare recipients from between 2005 and 2014, we estimate discrete-time hazard rate models that control for unobserved heterogeneity. The first benefit and unemployment episodes for first welfare recipients between 2006 and 2012 (n = 26,163) are traced monthly until 31 December 2014. Recipients leave unemployment more quickly than welfare. Sociodemographic characteristics, labour market resources and the duration seem to affect both processes. Household composition is less important for leaving unemployment than for leaving welfare. Overall, the results indicate that leaving unemployment and leaving welfare receipt are two different processes that need distinct policies.

Subjective Health and Unemployment in Germany: Analysis of 2005-2014 EU-SILC Data

This study aims to analyze self-perceived health and chronic illness in the working population and to explore disparities between social groups. The annual EU-SILC Survey has been conducted in Germany since 2005. The reference population is defined as all private households. In the EU-SILC 2014, a random sample of 22,695 persons aged 16 years and older was interviewed in Germany (860 unemployed and 11,390 employed). In accordance to the EU-SILC-Surveys 2005 until 2014, the self-perceived general health of the population has improved in Germany. 65.2% of the population (aged 16 years and older) in Germany assessed their health as very good or good in 2014 vs. 60.7% in 2005, despite an ageing population. However, there was an increase in health inequalities between employment status groups. In 2014, only 37.2% among unemployed persons vs. 77.1% of the employed perceived their general health as very good or good (53.8 vs. 73.2% in 2005). Multivariate logistic regression models revealed strong associations of subjective general health and chronic illness with age groups and social determinants on the EU-SILC-Survey 2014. Cross-sectional analysis showed unemployed persons to be much less likely to have very good or good self-perceived health (OR=0.26) and more likely to have chronic illness (OR=3.99) compared to employed people after adjustment for sociodemographic characteristics. The probabilities of better health and lower chronic illness rose with the increasing disposable (net) income as well as educational levels. 78.8% of the household members in the highest income quintile vs. 51.7% of the household members in the lowest income quintile said they had very good or good health (OR=2.53). In all investigated age groups, members of the households at risk of poverty were more likely to have poor health on average. High educational level (ISCED 5-8) was associated with higher positive self-rated health (OR=1.78). The EU-SILC-Survey shows distinct health developments and inequalities in Germany. EU-SILC is useful as an annual general population survey to monitor public health targets and reduce health inequalities.

Hartz IV: The Solution to the Unemployment Problems in the Eurozone?

The Hartz IV reforms are consistently regarded as a successful German model for the reduction of structural unemployment. Is it therefore appropriate to advise other member states of the European monetary union to carry out similar reforms? This paper strongly disagrees, arguing that the reduction in unemployment in Germany since 2005 is mainly due to cyclical factors and to the petering out of the negative employment effects caused by the economic transformation after German unification.

Unobservable, but unimportant? The relevance of usually unobserved variables for the evaluation of labor market policies

The main concern for many evaluation studies is that controlling for individuals' observed characteristics may not be enough to obtain valid treatment effects. We exploit a unique dataset that contains a rich set of administrative information on individuals newly entering unemployment in Germany, as well as several usually unobserved characteristics like personality traits, attitudes, expectations, social networks and intergenerational information. This allows us to empirically assess the effect of including these usually unobserved variables on the propensity score distribution, the matching quality, and the treatment effects obtained using unconfoundedness-based estimators. Our findings indicate that these variables play a significant role for selection into active labor market programs (ALMP), but do not make a significant difference in estimating treatment effects on wages and employment prospects. This suggests that the usually unobserved variables we analyze are not a threat to the validity of the estimated treatment effects, if comprehensive control variables of the type usually used in modern ALMP evaluations (which include labor market histories) are available. Our results also suggest that rich administrative data may be good enough to draw policy conclusions on the effectiveness of ALMPs.

Do Immigrants Suffer More From Job Loss? Unemployment and Subjective Well-being in Germany.

This study asks whether immigrants suffer more from unemployment than German natives. Differences between these groups in pre-unemployment characteristics, the type of the transition into unemployment, and the consequences of this transition suggest that factors intensifying the negative impact of unemployment on subjective well-being are more concentrated in immigrants than in natives. Based on longitudinal data from the German Socio-Economic Panel Study (1990-2014; N = 34,767 persons aged 20 to 64; N = 210,930 person-years), we used fixed-effects models to trace within-person change in subjective well-being across the transition from employment into unemployment and over several years of continued unemployment. Results showed that immigrants' average declines in subjective well-being exceeded those of natives. Further analyses revealed gender interactions. Among women, declines were smaller and similar among immigrants and natives. Among men, declines were larger and differed between immigrants and natives. Immigrant men showed the largest declines, amounting to one standard deviation of within-person change over time in subjective well-being. Normative, social, and economic factors did not explain these disproportionate declines. We discuss alternative explanations for why immigrant men are most vulnerable to the adverse effects of unemployment in Germany.

Trade and labor market dynamics: What do we learn from the data?

Recent studies in international trade highlight potential labor market effects of trade liberalization through firm selection. Our empirical study contributes to this recent strand of literature by studying the short- and long-run effects of trade on unemployment in Germany. We employ a structural VAR approach in order to disentangle the total effect of trade on unemployment into job-findings and separations. Our results indicate that the unemployment effect mainly works through a drop in the job-separation rate, which can be explained by job-to-job transitions from contracting towards expanding firms. Thus, our results reinforce the importance of endogenous separations and on-the-job search in models of trade, heterogeneous firms and labor market frictions.

Okun’s Law and Youth Unemployment in Germany and Poland

Abstract Unemployment rates, especially among youth, have increased in various countries of Europe over the last years. This paper examines changes in youth unemployment in Germany and Poland with Okun’s law, testing that young employees are more vulnerable to the business cycle. I estimate country specific Okun coefficients for five different age cohorts. The results show that youth in Poland is more sensitive to business cycle fluctuations than adults, while in Germany the difference between the age cohorts is not that distinctive. In addition, cohort differences in Germany are not statistically significant, while they are significant in Poland but only with regard to the two oldest age cohorts. A further examination of the different labor market institutions affecting youth employment suggests long-term policy recommendations extending beyond GDP growth, such as structural reforms in education, as well as job-search assistance as short-term recommendation.

Are there Long-Term Earnings Scars from Youth Unemployment in Germany?

Summary We analyze the relationship between early-career unemployment and prime-age earnings with German administrative linked employer-employee data. The careers of more than 720,000 male apprenticeship graduates from the cohorts of 1978 to 1980 are followed over 24 years. On average, early-career unemployment has substantial negative effects on earnings accumulated later in life. An identification strategy based on plant closure of the training firm at the time of graduation suggests that the revealed correlation is not the result of unobserved heterogeneity. Scarring effects also vary considerably across the earnings distribution. Workers with a high earning potential are able to offset adverse consequences of early-career unemployment to a large extent. Workers who are located at the bottom of the prime-age earnings distribution, in contrast, suffer substantial and persistent losses. Our findings imply that a policy with the aim of preventing early-career unemployment would have long-lasting beneficial effects on future earnings.

What Follows What? Relations between Economic Indicators, Economic Expectations of the Public, and News on the General Economy and Unemployment in Germany, 2002-2011

This study aims to understand dynamic agenda-building and agenda-setting processes between real-world indicators, public expectations (PEs), and aggregated news on the general economy and unemployment for the four most popular general news outlets in Germany from 2002 to 2011: two public service, a commercial news show, and a tabloid newspaper. Vector autoregression models and Granger causality tests reveal that (1) news tone (NT) relates to real-world indicators; (2) PEs for the general economy and unemployment are partly set by the tone of news on the general economy, especially during recession times; and (3) PEs can forecast the future real-world economy.

Offshoring and Labour Market Reforms: Modelling the German Experience

A usual interpretation of the high performance of the German economy since 2005 is that the Hartz labour market reforms have boosted German competitiveness, resulting in higher exports, higher production and lower unemployment. This explanation is at odds with the sequence of observed facts. We propose and model an alternative scenario in which offshoring explains the gains in competitiveness but increases unemployment and inequality, and the subsequent labour market reforms lower unemployment by lessening the reservation wage and expanding the non-tradable sector. The model replicates the developments of the German economy since 1995: 1) Germany offshores more intensively than other advanced countries; 2) The increase in competitiveness and in the exports/production ratio occurs before the implementation of the labour market reform, and this comes with both higher inequality and higher unemployment; 3) The implementation of the reform reduces unemployment, but also decreases the exports/production ratio and increases inequality. The model also predicts that the reduction in unemployment in Germany would have occurred without the Hartz reforms, but later and less intensively. We finally discuss the possible extension of this 'strategy' to other Eurozone countries, and alternative policies that activate similar mechanisms without increasing inequality.

A Comparison of Greece and Germany: Lessons for the Eurozone?

During the Great Recession and its aftermath, the economic performance of Greece and Germany diverged sharply with persistent high unemployment in Greece and low unemployment in Germany. A common explanation for this divergence is the assumption of an unsustainable level of debt in Greece in the years after the formation of the Eurozone while Germany maintained fiscal discipline. This paper reviews the experience of Greece and Germany since the creation of the Eurozone. The review points to the importance of monetary factors, especially the intensification of the recession in Greece starting in 2011 derived from the price-specie flow mechanism described by David Hume.

Universities’ effects on regional GDP and unemployment: The case of Germany

AbstractThere is a large consensus that higher education institutions exert notable effects on their regional environment. So far, however, much of the related evidence is based on case studies. Few findings are available on a more generalizable level. To bridge this gap, our study uses spatial panel‐data models to identify the impacts of higher education institution (HEI) activities on GDP per capita and unemployment in Germany. Beyond demand‐side effects, we seek to identify the, arguably more important, indirect long‐term effects of knowledge generation. Accounting for regional spillovers, we find that on average HEI contributed €8,300 to regional GDP per capita in the period 2000 to 2011. Furthermore, we find that they help to significantly reduce unemployment rates in the long run.

Are There Long-Term Earnings Scars from Youth Unemployment in Germany?

We analyze the relationship between early-career unemployment and prime-age earnings with German administrative linked employer-employee data. The careers of more than 720,000 male apprenticeship graduates from the cohorts of 1978 to 1980 are followed over 24 years. On average, early-career unemployment has substantial negative effects on earnings accumulated later in life. An identification strategy based on plant closure of the training firm at the time of graduation suggests that the revealed correlation is not the result of unobserved heterogeneity. Scarring effects also vary considerably across the earnings distribution. Workers with a high earnings potential are able to offset adverse consequences of early-career unemployment to a large extent. Workers who are located at the bottom of the prime-age earnings distribution, in contrast, suffer substantial and persistent losses. Our findings imply that a policy with the aim of preventing early-career unemployment would have long-lasting beneficial effects on future earnings.