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Structural change of the production process and unemployment duration in Germany

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  • Schimmelpfennig, Axel

Abstract

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.

Suggested Citation

  • Schimmelpfennig, Axel, 1999. "Structural change of the production process and unemployment duration in Germany," Kiel Working Papers 959, Kiel Institute for the World Economy (IfW Kiel).
    • Handle: RePEc:zbw:ifwkwp:959
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    References listed on IDEAS

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    More about this item

    Keywords

    Unemployment duration; Cox Proportional Hazard model; structural change;
    All these keywords.

    JEL classification:

    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies

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