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Sectoral Transformation, Turbulence, and Labor Market Dynamics in Germany

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  • Bachmann, Ronald

    ()
    (RWI)

  • Burda, Michael C.

    ()
    (Humboldt University Berlin)

Abstract

This paper analyzes the interaction between structural change and labor market dynamics in West Germany, during a period in which industrial employment declined by more than 30% and service sector employment more than doubled. Using transition data on individual 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.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 3324.

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Length: 36 pages
Date of creation: Jan 2008
Date of revision:
Publication status: published in: German Economic Review, 2010, 11 (1), 37 - 59
Handle: RePEc:iza:izadps:dp3324

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Keywords: sectoral and occupational mobility; gross worker flows; turbulence;

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Citations

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Cited by:
  1. Michael C. Burda, 2007. "What kind of shock was it? Regional Integration and Structural Change in Germany after Unification," Kiel Working Papers 1306, Kiel Institute for the World Economy.
  2. Álvarez de Toledo, Pablo & Núñez, Fernando & Usabiaga, Carlos, 2014. "An empirical approach on labour segmentation. Applications with individual duration data," Economic Modelling, Elsevier, Elsevier, vol. 36(C), pages 252-267.
  3. 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).
  4. Ronald Bachmann & Sebastian Braun, 2008. "The Impact of International Outsourcing on Labour Market Dynamics in Germany," Ruhr Economic Papers, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen 0053, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
  5. Walter Krämer, 2011. "The cult of statistical significance. What economists should and should not do to make their data talk," Working Paper Series of the German Council for Social and Economic Data, German Council for Social and Economic Data (RatSWD) 176, German Council for Social and Economic Data (RatSWD).
  6. Brian Silverstone & Will Bell, 2011. "Gross Labour Market Flows in New Zealand: Some Questions and Answers," Working Papers in Economics, University of Waikato, Department of Economics 11/15, University of Waikato, Department of Economics.
  7. Stephan Humpert, 2012. "Age and Gender Differences in Job Opportunities," Working Paper Series in Economics 235, University of Lüneburg, Institute of Economics.
  8. Klinger, Sabine & Weber, Enzo, 2014. "On GDP-employment decoupling in Germany," IAB Discussion Paper 201421, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
  9. Carlos Usabiaga & Fernando Núñez & Pablo Álvarez de Toledo, 2013. "Segmentación del mercado de trabajo, clusters, movilidad y duración de desempleo con datos individuales," Economic Working Papers at Centro de Estudios Andaluces E2013/02, Centro de Estudios Andaluces.
  10. Álvarez de Toledo, Pablo & Núñez, Fernando & Usabiaga, Carlos, 2013. "Labour Market Segmentation, Clusters, Mobility and Unemployment Duration with Individual Microdata," MPRA Paper 46003, University Library of Munich, Germany.
  11. Sepp, Jüri, 2009. "Industriestruktur als Ursache für Produktivitätsunterschiede in Europa: Das Beispiel Estland," Discussion Papers 1/09, Europa-Kolleg Hamburg, Institute for European Integration.
  12. Gina Cristina Dimian & Bogdan Ileanu & Josef Jablonský & Jan Fábry, 2013. "Analysis of European Labour Market in the Crisis Context," Prague Economic Papers, University of Economics, Prague, University of Economics, Prague, vol. 2013(1), pages 50-71.

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