By Bernd Fitzenberger

This ebook explores empirically for West Germany no matter if a decline within the relative call for for much less expert employees led to elevated unemployment. utilizing up to date econometric thoughts, a balanced mix among descriptive facts and structural estimation is supplied, and there are numerous findings within the booklet which require a amendment of the normal knowledge approximately exertions industry developments in West Germany. total salary dispersion has been expanding and salary development has been better for low-skilled and high-skilled staff in comparison to the medium ability team. A ability bias in exertions call for developments is located and better salary flexibility may have alleviated the dispersion in unemployment charges throughout ability teams. the most driver seems to be technological development, even though, the facts can also be in keeping with foreign alternate inflicting a deterioration within the exertions marketplace place of low-skilled staff. with reference to salary bargaining, facts for a short-run, yet no longer for a long-run, moderation of salary calls for is located within the presence of a damaging hard work call for shock.

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Additional resources for Wages and Employment Across Skill Groups: An Analysis for West Germany

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In testing for uniformity across quantiles, the analysis in this chapter extends upon the earlier studies MaCurdy and Mroz (1995) and Fitzenberger, Hujer, MaCurdy, and Schnabel (1995). The empirical analysis in this chapter uses wage data for the time period from 1975 to 1990 (which extends upon the available time period from 1976 to 1984 in Fitzenberger, Hujer, MaCurdy, and Schnabel, 1995). The data is taken from the IAB-Beschaftigtenstichprobe (lABS) as described in the previous chapter and in the appendix.

48 A Cohort Analysis of Wage Trends Models 2 to 4 are restricted versions of model 1: = 0 for j = 1, ... ,4 (HUI imposed), Pi = 0 for j = 1, ... ,4 and 'Ya2 = 0 (Hu imposed), and Pi = 0 for j = 1, ... ,4, 'Ya2 = 0 (Hu imposed) and 'Yb2 = 'Yb3 = 'Yb4 = O. Model 2: Pi Model 3: Model 4: Due to the severity of censoring for skill group (H), I only estimate versions of model 1 to 4 under the restrictions a3 = 0 and Cb4 = 0 for this group. e. no "cohort effects" operate for those cohorts entering the labor market before the start of the sample in 1975.

2 •••• ••"!....... 7: 80%-20% Difference of Log Wages for Full-Time Work. ,. " ••••• 100....... 26 n .... ••~•••••. oM/·· •• .... ~ .. 42 n 50%-20% Difference ....... ,.. ot-······,........ -.. 04 1975 U M· .... ·M M ............. r......... , /)<. . ••.. 1980 I Skill 1985 1990 YEAR Group: ~ U M" .... ·M M .............. - - Entire Economy 130 120 e 110 n *- -- Y m Total Skill Group (U) Skill Group (M) Skill Group (H) ~ 150 t .............. - n d e x 60 1975 1980 0 Y m 130 110 t 100 n 80 x 70 180 p I 0 Y m e n t e x Manufacturing ...

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