Sectoral Transformation, Turbulence, and Labour Market Dynamics in Germany
Abstract
The secular rise of European unemployment since the 1960s is hard to explain without reference to structural change. This is especially true in Germany, where industrial employment has declined by more than 30% and service sector employment has more than doubled over the past three decades. Using individual transition data on West German workers, we document a marked increase in structural change and turbulence, in particular since 1990. Net employment changes resulted partly from an increase in gross flows, but also from an increase in the net transition "yield" at any given gross worker turnover. In growing sectors, net structural change was driven by accessions from nonparticipation rather than unemployment; contracting sectors reduced their net employment primarily via lower accessions from nonparticipation. While gross turnover is cyclically sensitive and strongly procyclical, net reallocation is countercyclical, meaning that recessions are associated with increased intensity of sectoral reallocation. Beyond this cyclical component, German reunification and Eastern enlargement appear to have contributed significantly to this accelerated pace of structural change.Download Info
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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 6226.Length:
Date of creation: Mar 2007
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Handle: RePEc:cpr:ceprdp:6226
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Keywords: gross worker flows; sectoral and occupational mobility; turbulence;Other versions of this item:
- Ronald Bachmann & Michael C. Burda, 2010. "Sectoral Transformation, Turbulence and Labor Market Dynamics in Germany," German Economic Review, Verein für Socialpolitik, vol. 11, pages 37-59, 02.
- Ronald Bachmann & Michael C. Burda, 2007. "Sectoral Transformation, Turbulence, and Labor Market Dynamics in Germany," Ruhr Economic Papers 0005, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
- Ronald Bachmann & Michael C. Burda, 2007. "Sectoral Transformation, Turbulence, and Labour Market Dynamics in Germany," SFB 649 Discussion Papers SFB649DP2007-008, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany.
- Bachmann, Ronald & Burda, Michael C., 2008. "Sectoral Transformation, Turbulence, and Labor Market Dynamics in Germany," IZA Discussion Papers 3324, Institute for the Study of Labor (IZA).
- J62 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Job, Occupational and Intergenerational Mobility; Promotion
- J63 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Turnover; Vacancies; Layoffs
- J64 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Unemployment: Models, Duration, Incidence, and Job Search
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-03-31 (All new papers)
- NEP-EEC-2007-03-31 (European Economics)
- NEP-TID-2007-03-31 (Technology & Industrial Dynamics)
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Citations
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.Cited by:
- Ronald Bachmann & Michael C. Burda, 2010.
"Sectoral Transformation, Turbulence and Labor Market Dynamics in Germany,"
German Economic Review,
Verein für Socialpolitik, vol. 11, pages 37-59, 02.
- Ronald Bachmann & Michael C. Burda, 2007. "Sectoral Transformation, Turbulence, and Labor Market Dynamics in Germany," Ruhr Economic Papers 0005, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
- Ronald Bachmann & Michael C. Burda, 2007. "Sectoral Transformation, Turbulence, and Labour Market Dynamics in Germany," SFB 649 Discussion Papers SFB649DP2007-008, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany.
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