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Changes in Occupational Demand Structure and their Impact on Individual Wages

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  • Alexandra Fedorets

Abstract

This paper estimates wage losses arising due to changes in the structure of demand for occupations. The data on occupational changes made for the sake of adjustment to the changes in the demand structure come from the German reunification of 1990. Endogenous occupational changes are instrumented by the post-reunification demand properties of the occupation of the apprenticeship completed in the GDR. The IV computation reveals a negative wage effect of nearly 35 log points in 1991/92. This effect is persistent over time - after almost 10 years after reunification the negative wage effect associated with occupational changes due to the relocation of individual human capital across occupations is more than 20 log points.

Suggested Citation

  • Alexandra Fedorets, 2011. "Changes in Occupational Demand Structure and their Impact on Individual Wages," SFB 649 Discussion Papers SFB649DP2011-075, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany.
  • Handle: RePEc:hum:wpaper:sfb649dp2011-075
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    File URL: http://sfb649.wiwi.hu-berlin.de/papers/pdf/SFB649DP2011-075.pdf
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    References listed on IDEAS

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    1. McCall, Brian P, 1990. "Occupational Matching: A Test of Sorts," Journal of Political Economy, University of Chicago Press, vol. 98(1), pages 45-69, February.
    2. Neal, Derek, 1999. "The Complexity of Job Mobility among Young Men," Journal of Labor Economics, University of Chicago Press, vol. 17(2), pages 237-261, April.
    3. Miller, Robert A, 1984. "Job Matching and Occupational Choice," Journal of Political Economy, University of Chicago Press, vol. 92(6), pages 1086-1120, December.
    4. Bonin, Holger & Zimmermann, Klaus F., 2000. "The Post-Unification German Labor Market," IZA Discussion Papers 185, Institute for the Study of Labor (IZA).
    5. Gerlinde Sinn & Hans-Werner Sinn, 1994. "Jumpstart: The Economic Unification of Germany," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262691728, January.
    6. Alexandra Fedorets, 2011. "Time-Varying Occupational Contents: An Additional Link between Occupational Task Profiles and Individual Wages," SFB 649 Discussion Papers SFB649DP2011-074, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany.
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    Citations

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    Cited by:

    1. Hannah Liepmann, 2016. "The Impact of a Negative Labor Demand Shock on Fertility - Evidence from the Fall of the Berlin Wall," SFB 649 Discussion Papers SFB649DP2016-042, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany.
    2. Ulrich Horst & Michael Kupper & Andrea Macrina & Christoph Mainberger, 2011. "Continuous Equilibrium under Base Preferences and Attainable Initial Endowments," SFB 649 Discussion Papers SFB649DP2011-082, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany.
    3. Patrick Cheridito & Ulrich Horst & Michael Kupper & Traian A. Pirvu, 2016. "Equilibrium Pricing in Incomplete Markets Under Translation Invariant Preferences," Mathematics of Operations Research, INFORMS, vol. 41(1), pages 174-195, February.
    4. Raffaele Fiocco, 2012. "Competition and regulation with product differentiation," Journal of Regulatory Economics, Springer, vol. 42(3), pages 287-307, December.
    5. Alena MyÅ¡iÄ ková & Song Song & Piotr Majer & Peter N.C. Mohr & Hauke R. Heekeren & Wolfgang K. Härdle, 2011. "Risk Patterns and Correlated Brain Activities. Multidimensional statistical analysis of fMRI data with application to risk patterns," SFB 649 Discussion Papers SFB649DP2011-085, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany.

    More about this item

    Keywords

    Human capital; wage premium; occupational change; natural experiment;

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • P21 - Economic Systems - - Socialist Systems and Transition Economies - - - Planning, Coordination, and Reform

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