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Forecasting Employment for Germany

Author

Listed:
  • Darius Hinz

    (University of Bielefeld (Student))

  • Camille Logeay

    (IMK at the Hans Boeckler Foundation)

Abstract

This paper deals with the estimation of employment equations for Germany, which are to be used for forecasting and simulation purposes. The authors estimate both single and system error correction equations for German working hours using quarterly raw data covering the period 1980:1-2004:2. Since the focus is on the question whether German reunification has affected or even modified the underlying economic relationships, the authors compare the results to those reported in previous studies for West Germany and Germany, respectively. The authors find that the elasticity of employment with respect to output is robustly estimated and can therefore be restricted to one. The elasticity of employment with respect to the real wage, however, is affected by German reunification and relative factor prices no longer play a significant role. The forecasting quality of the employment equation is satisfactory.

Suggested Citation

  • Darius Hinz & Camille Logeay, 2006. "Forecasting Employment for Germany," IMK Working Paper 01-2006, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute, revised Jan 2006.
    • Handle: RePEc:imk:wpaper:01-2006
    as

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    File URL: http://www.boeckler.de/pdf/p_imk_wp_01_2006.pdf
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    References listed on IDEAS

    as
    1. Perron, Pierre, 1989. "The Great Crash, the Oil Price Shock, and the Unit Root Hypothesis," Econometrica, Econometric Society, vol. 57(6), pages 1361-1401, November.
    2. Albert van der Horst, 2003. "Structural Estimates of Equilibrium Unemployment in Six OECD Economies," Economics Working Papers 022, European Network of Economic Policy Research Institutes.
    3. Albert van der Horst, 2003. "Structural estimates of equilibrium unemployment in six OECD economies," CPB Discussion Paper 19, CPB Netherlands Bureau for Economic Policy Analysis.
    4. Albert van der Horst, 2003. "Structural estimates of equilibrium unemployment in six OECD economies," CPB Discussion Paper 19.rdf, CPB Netherlands Bureau for Economic Policy Analysis.
    5. Flaig, Gebhard & Steiner, Viktor, 1989. "Stability and Dynamic Properties of Labour Demand in West German Manufacturing," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 51(4), pages 395-412, November.
    6. Clements, M.P. & Hendry, D.F., 1992. "Forecasting in Cointegrated Systems," Economics Series Working Papers 99139, University of Oxford, Department of Economics.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    employment; forecasting; cointegration; Germany;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • E27 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Forecasting and Simulation: Models and Applications
    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods

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