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A New Measure of Wage Risk: Occupation-Specific Evidence for Germany

Author

Listed:
  • Helmut Herwartz

    (Georg-August-University)

  • David Rodriguez-Justicia

    (Universitat de Girona)

  • Bernd Theilen

    (Universitat Rovira i Virgili)

Abstract

This study proposes a new measure of wage risk based on estimated probabilities to earn an hourly wage that is below some specific lower quantile of the wage distribution. Using the German SOEP as an information rich data base, we determine wage risks overall and for nine job categories during the period from 1992 until 2015. We find that the low-wage workers in Germany are worse off after the Hartz reforms. In Western Germany this evidence stems from both a reduction of low wages and an increase of wage risk. In Eastern Germany, it is largely due to increased wage risk. Moreover, overall evidence hides important developments at the occupational level.

Suggested Citation

  • Helmut Herwartz & David Rodriguez-Justicia & Bernd Theilen, 2022. "A New Measure of Wage Risk: Occupation-Specific Evidence for Germany," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 164(3), pages 1427-1462, December.
    • Handle: RePEc:spr:soinre:v:164:y:2022:i:3:d:10.1007_s11205-022-02995-6
    DOI: 10.1007/s11205-022-02995-6
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    More about this item

    Keywords

    Wage risk; German labor market; Job-specific wage risk; German SOEP; Probit models;
    All these keywords.

    JEL classification:

    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities

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