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Do small labor market entry cohorts reduce unemployment?

Author

Listed:
  • Garloff, Alfred

    (Institute for Employment Research (IAB), Nuremberg, Germany)

  • Pohl, Carsten

    (Institute for Employment Research (IAB), Nuremberg, Germany)

  • Schanne, Norbert

    (Institute for Employment Research (IAB), Nuremberg, Germany)

Abstract

"In this paper we study the effect of small labor market entry cohorts on (un)employment in Western Germany. From a theoretical point of view, decreasing cohort sizes may on the one hand reduce unemployment due to 'inverse cohort crowding' or on the other hand increase unemployment if companies reduce jobs disproportionately. Consequently, the actual effect of cohort shrinking on (un)employment is an empirical question. We analyze the relationship between (un)employment and cohort sizes using a long panel of Western German labor market regions. In this context, we account for both the likely endogeneity of cohort size due to migration of the (young) workforce across regions using lagged births as instruments as well as for temporal and spatial autocorrelation. Our results provide good news for the (Western) German labor market: small entry cohorts are indeed likely to decrease the overall unemployment rate and thus to improve the situation of job seekers. Accordingly, with regard to the employment rate we find that it is positively affected by a decrease in the youth share." (Author's abstract, IAB-Doku) ((en))

Suggested Citation

  • Garloff, Alfred & Pohl, Carsten & Schanne, Norbert, 2011. "Do small labor market entry cohorts reduce unemployment?," IAB-Discussion Paper 201118, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    • Handle: RePEc:iab:iabdpa:201118
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    Cited by:

    1. Garloff, Alfred & Pohl, Carsten & Schanne, Norbert, 2012. "Demografischer Wandel der letzten 20 Jahre: Alterung der Bevölkerung hat sich kaum auf die Arbeitslosigkeit ausgewirkt (Demographic change over the last two decades: Population ageing has hardly affec," IAB-Kurzbericht 201210, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    2. de Graaff, Thomas & Ozgen, Ceren & Roth, Duncan H.W., 2018. "Varying Youth Cohort Effects on Regional Labour Market Outcomes in Germany," IZA Discussion Papers 11932, Institute of Labor Economics (IZA).
    3. Schmelzer, Paul, 2011. "Unemployment and occupational mobility at the beginning of employment career in Germany and the UK," IAB-Discussion Paper 201125, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    4. Engelmann, Sabine, 2011. "Trade liberalisation, technical change and skill-specific unemployment," IAB-Discussion Paper 201119, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    5. Marco Caliendo & Jens Hogenacker & Steffen Künn & Frank Wießner, 2012. "Alte Idee, neues Programm: Der Gründungszuschuss als Nachfolger von Überbrückungsgeld und Ich-AG [Old idea, new program: The new start-up subsidy as a successor of the former bridging allowance and," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 45(2), pages 99-123, July.
    6. Christopher S Fowler & Leif Jensen, 2020. "Bridging the gap between geographic concept and the data we have: The case of labor markets in the USA," Environment and Planning A, , vol. 52(7), pages 1395-1414, October.
    7. Alfred Garloff & Rüdiger Wapler, 2013. "Are the Number of Skilled Workers Running Out in Germany? The (Non)-Consequences of Demographic Change," ERSA conference papers ersa13p854, European Regional Science Association.
    8. Pohl, Carsten, 2013. "Demografie, Erwerbsbeteiligung und Erwerbslosigkeit in Nordrhein-Westfalen : Analyse der Zusammenhänge zwischen 1996 und 2011," IAB-Regional. Berichte und Analysen aus dem Regionalen Forschungsnetz. IAB Nordrhein-Westfalen 201301, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    9. Fanny Annemarie Kluge, 2013. "The Fiscal Impact of Population Aging in Germany," Public Finance Review, , vol. 41(1), pages 37-63, January.
    10. Zapfel, Stefan & Promberger, Markus, 2011. "Gemeinschaft, Gesellschaft und soziale Sicherung : Überlegungen zu Genese und Wandel des modernen Wohlfahrtsstaats," IAB-Discussion Paper 201121, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].

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    More about this item

    Keywords

    Bundesrepublik Deutschland ; Westdeutschland ; Auswirkungen ; Beschäftigungseffekte ; Bevölkerungsrückgang ; Bevölkerungsstruktur ; demografischer Wandel ; demografischer Wandel ; Geburtenrückgang ; internationaler Vergleich ; Jugendliche ; junge Erwachsene ; Altersstruktur ; OECD ; regionaler Vergleich ; Arbeitslosenquote ; Arbeitsmarktchancen ; Arbeitsuchende ; 1978-2009;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J82 - Labor and Demographic Economics - - Labor Standards - - - Labor Force Composition
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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