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Changes in Occupational Demand Structure and their Impact on Individual Wages

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  • Alexandra Fedorets
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    Abstract

    This paper estimates wage losses arising due to changes in the structure of demand for occupations. The data on occupational changes made for the sake of adjustment to the changes in the demand structure come from the German reunification of 1990. Endogenous occupational changes are instrumented by the post-reunification demand properties of the occupation of the apprenticeship completed in the GDR. The IV computation reveals a negative wage effect of nearly 35 log points in 1991/92. This effect is persistent over time - after almost 10 years after reunification the negative wage effect associated with occupational changes due to the relocation of individual human capital across occupations is more than 20 log points.

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    File URL: http://sfb649.wiwi.hu-berlin.de/papers/pdf/SFB649DP2011-075.pdf
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    Bibliographic Info

    Paper provided by Sonderforschungsbereich 649, Humboldt University, Berlin, Germany in its series SFB 649 Discussion Papers with number SFB649DP2011-075.

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    Length: 29 pages
    Date of creation: Nov 2011
    Date of revision:
    Handle: RePEc:hum:wpaper:sfb649dp2011-075

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    Related research

    Keywords: Human capital; wage premium; occupational change; natural experiment;

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    1. Acemoglu, Daron & Pischke, Jörn-Steffen, 1996. "Why do Firms Train? Theory and Evidence," CEPR Discussion Papers, C.E.P.R. Discussion Papers 1460, C.E.P.R. Discussion Papers.
    2. Neal, Derek, 1999. "The Complexity of Job Mobility among Young Men," Journal of Labor Economics, University of Chicago Press, University of Chicago Press, vol. 17(2), pages 237-61, April.
    3. Miller, Robert A, 1984. "Job Matching and Occupational Choice," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 92(6), pages 1086-120, December.
    4. Gerlinde Sinn & Hans-Werner Sinn, 1994. "Jumpstart: The Economic Unification of Germany," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262691728, December.
    5. Johnson, William R, 1978. "A Theory of Job Shopping," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 92(2), pages 261-78, May.
    6. Brian P. McCall, 1988. "Occupational Matching: A Test of Sorts," Working Papers 617, Princeton University, Department of Economics, Industrial Relations Section..
    7. Bonin, Holger & Zimmermann, Klaus F., 2000. "The Post-Unification German Labor Market," IZA Discussion Papers 185, Institute for the Study of Labor (IZA).
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