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Structural Change of the Production Process and Unemployment Duration in Germany


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  • Axel Schimmelpfennig
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    Based on a Cox Proportional Hazard analysis of German unemployment spells, structural change of the production process is identified as a major explanation for long-term unemployment. Other important covariates capture labor market institutions, macroeconomic stress factors, and individual characteristics. Structural change of the production process has resulted in a shift in labor demand across occupations and skills. For individuals laid off from declining parts of the economy, this implies a devaluation of their human capital. They need to acquire new skills for positions in expanding parts of the economy, or spend a longer time in unemployment searching for the few remaining jobs for which they possess adequate skills.

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    Bibliographic Info

    Paper provided by Kiel Institute for the World Economy in its series Kiel Working Papers with number 959.

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    Length: 37 pages
    Date of creation: Dec 1999
    Date of revision:
    Handle: RePEc:kie:kieliw:959

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    Related research

    Keywords: Unemployment duration; Cox Proportional Hazard model; structural change;

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