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Regional age structure and young workers' wages

Listed author(s):
  • Garloff, Alfred

    (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany])

  • Roth, Duncan

    ()

    (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany])

"This paper estimates the effect that changes in the size of the youth population have on the wages of young workers. Assuming that differently aged workers are only imperfectly substitutable, economic theory predicts that individuals in larger age groups earn lower wages. We test this hypothesis for a sample of young, male, fulltime employees in Western Germany during the period 1999-2010. In contrast to other studies, functional rather than administrative spatial entities are used as they provide a more accurate measure of the youth population in an actual labour market. Based on instrumental variables estimation, we show that an increase in the youth share by one percentage point is predicted to decrease a young worker's wages by 3 %. Our results also suggest that a substantial part of this effect is due to members of larger age groups being more likely to be employed in lower-paying occupations." (Author's abstract, IAB-Doku) ((en))

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Paper provided by Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany] in its series IAB Discussion Paper with number 201606.

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Length: 41 pages
Date of creation: 18 Feb 2016
Handle: RePEc:iab:iabdpa:201606
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  1. John Moffat & Duncan Roth, 2016. "The Cohort Size-Wage Relationship in Europe," LABOUR, CEIS, vol. 30(4), pages 415-432, December.
  2. Stapleton, David C & Young, Douglas J, 1988. "Educational Attainment and Cohort Size," Journal of Labor Economics, University of Chicago Press, vol. 6(3), pages 330-361, July.
  3. Joshua D. Angrist & Jörn-Steffen Pischke, 2009. "Mostly Harmless Econometrics: An Empiricist's Companion," Economics Books, Princeton University Press, edition 1, number 8769.
  4. Wright, Robert E, 1991. "Cohort Size and Earnings in Great Britain," Journal of Population Economics, Springer;European Society for Population Economics, vol. 4(4), pages 295-305, November.
  5. Duncan Roth & John Moffat, 2014. "Cohort size and youth unemployment in Europe: a regional analysis," ERSA conference papers ersa14p1546, European Regional Science Association.
  6. repec:zbw:rwirep:0107 is not listed on IDEAS
  7. Ochsen, Carsten, 2009. "Regional labor markets and aging in Germany," Thuenen-Series of Applied Economic Theory 102, University of Rostock, Institute of Economics.
  8. Fertig, Michael & Schmidt, Christoph M. & Sinning, Mathias G., 2009. "The impact of demographic change on human capital accumulation," Labour Economics, Elsevier, vol. 16(6), pages 659-668, December.
  9. Jochen Michaelis & Martin Debus, 2011. "Wage and (un-)employment effects of an ageing workforce," Journal of Population Economics, Springer;European Society for Population Economics, vol. 24(4), pages 1493-1511, October.
  10. Florian Lehmer & Joachim Möller, 2010. "Interrelations between the urban wage premium and firm-size wage differentials: a microdata cohort analysis for Germany," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 45(1), pages 31-53, August.
  11. Fuchs, Michaela & Weyh, Antje, 2014. "Demography and unemployment in East Germany : how close are the ties?," IAB Discussion Paper 201426, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
  12. Biagi, Federico & Lucifora, Claudio, 2008. "Demographic and education effects on unemployment in Europe," Labour Economics, Elsevier, vol. 15(5), pages 1076-1101, October.
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