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Can a Task-Based Approach Explain the Recent Changes in the German Wage Structure?

  • Antonczyk Dirk

    ()

  • Leuschner Ute

    ()

    (Albert-Ludwigs-University Freiburg)

  • Fitzenberger Bernd

    ()

    (Ph. D., Department of Economics, Albert-Ludwigs-University Freiburg, Platz der Alten Synagoge, 79085 Freiburg, Germany, and IFS, IZA, ZEW)

This paper investigates the changes in the German wage structure for full-time working males from 1999 to 2006. Our analysis builds on the task-based approach introduced by Autor et al. (2003), as implemented by Spitz-Oener (2006) for Germany, and also accounts for job complexity. We perform a Blinder-Oaxaca type decomposition of the changes in the entire wage distribution between 1999 and 2006 into the separate effects of personal characteristics and task assignments. In line with the literature, we find a noticeable increase of wage inequality between 1999 and 2006. The decomposition results show that the changes in personal characteristics explain some of the increase in wage inequality whereas the changes in task assignments strongly work towards reducing wage inequality. The coefficient effect for personal characteristics works towards an increase in wage inequality at the top of the wage distribution. The coefficient effect for the task assignments on the contrary shows an inverted U-shaped pattern. We conclude that altogether the task-based approach can not explain the recent increase of wage inequality in Germany.

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Article provided by De Gruyter in its journal Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik).

Volume (Year): 229 (2009)
Issue (Month): 2-3 (April)
Pages: 214-238

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Handle: RePEc:jns:jbstat:v:229:y:2009:i:2-3:p:214-238
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  2. Fitzenberger, Bernd & Kohn, Karsten & Wang, Qingwei, 2006. "The Erosion of Union Membership in Germany: Determinants, Densities, Decompositions," ZEW Discussion Papers 06-66, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
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  19. Fitzenberger, Bernd & Kohn, Karsten, 2006. "Skill wage premia, employment, and cohort effects: are workers in Germany all of the same type?," ZEW Discussion Papers 06-44, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  20. Christian Dustmann & Johannes Ludsteck & Uta Schönberg, 2009. "Revisiting the German Wage Structure," The Quarterly Journal of Economics, Oxford University Press, vol. 124(2), pages 843-881.
  21. Fairlie, Robert, 2014. "The Absence of the African-American Owned Business: An Analysis of the Dynamics of Self-Employment," Santa Cruz Department of Economics, Working Paper Series qt49c4n0fg, Department of Economics, UC Santa Cruz.
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