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Sectoral Transformation, Turbulence and Labor Market Dynamics in Germany

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  • Ronald Bachmann
  • Michael C. Burda

Abstract

. This paper analyzes the interaction between structural change and labor market dynamics in West Germany, during a period when 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 non‐participation rather than unemployment; contracting sectors reduced their net employment primarily via lower accessions from non‐participation. German reunification and Eastern enlargement appear to have contributed significantly to this accelerated pace of structural change.

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  • Ronald Bachmann & Michael C. Burda, 2010. "Sectoral Transformation, Turbulence and Labor Market Dynamics in Germany," German Economic Review, Verein für Socialpolitik, vol. 11(1), pages 37-59, February.
  • Handle: RePEc:bla:germec:v:11:y:2010:i:1:p:37-59
    DOI: 10.1111/j.1468-0475.2009.00465.x
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    JEL classification:

    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion

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