Wage-Induced Mismatch on German Labour Markets? Lessons from Comparison with Portugal
The German labour market performance is falling behind that of other European countries. Portugal, for instance, has decreasing unemployment rates, leading to a share of only 4.6% unemployed persons in 1998 (Germany: 9.5%). This paper sheds some light on the divergent development from a matching point of view. I present matching functions based on comparable panel data on hires, vacancies and unemployment at the occupational level for Portugal and Germany. Both countries reveal low matching elasticities with respect to unemployment. In Portugal, however, there is a strong upward trend of the matching efficiency, whereas Germany's labour market has become less flexible over time. The analysis of the reasons is eased by availability of panel data. Because of high degrees of freedom, aggregate mismatch indicators are implemented as covariates of the matching trend. It turns out that the evolution of real wages is a significant factor of mismatch in Germany. There seems to be growing mismatch because the (demanded) feasible wage of firms does not coincide with reservation wages of labour supply. Moreover, the slow expansion of the service sector and the failing reintegration of women coming from out of the labour force are obstacles of more efficient matching in Germany. In Portugal, on the other hand, the reduction of minimum wages has significantly contributed to increased matching activities.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 219 (1999)
Issue (Month): 1+2 (July)
|Contact details of provider:|| Postal: |
Phone: +49 (0)641 99 22 001
Fax: +49 (0)641 99 22 009
Web page: http://wiwi.uni-giessen.de/home/oekonometrie/Jahrbuecher/
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:jns:jbstat:v:219:y:1999:i:1-2:p:127-142. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Peter Winker)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.