Estimating wage losses of displaced workers in Germany

Burda, Michael C.; Mertens, Antje

doi:10.1016/s0927-5371(00)00022-1

“…Our results mostly corroborate the findings from the earlier literature suggesting that unemployment spells have negative returns (e.g., Arulampalam, 2001;Burda and Mertens, 2001;Pérez and Sanz, 2005).…”

Section: Discussionsupporting

confidence: 91%

The labour market consequences of self-employment spells: European evidence

Hyytinen

¹

,

Rouvinen

²

2008

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. www.econstor.eu No. 1129 Ari Hyytinen* -Petri Rouvinen** Terms of use: Documents in Keskusteluaiheita -Discussion papers THE LABOUR MARKET CONSEQUENCES OF SELF-EMPLOYMENT SPELLS: EUROPEAN EVIDENCE ABSTRACT:We examine how those re-entering paid-employment after a brief selfemployment spell fare upon return using data from the European Community Household Panel. Unconditionally, those re-entering paid-employment appear to have considerably lower wages than those staying in the wage sector. This difference appears to be larger in Europe than in the US. Conditional analysis suggests, however, that the difference is more apparent than real: It seems that Europeans select negatively into (and possibly out-of) selfemployment, i.e., the likelihood of entering (and exiting) entrepreneurship correlates negatively with unobserved ability and/or in-paid-employment productivity. Our analysis of non-wage outcomes indicates that the selection is mostly involuntary and that for highly educated men, the brief self-employment spells are unemployment in disguise.JEL CODES: J230, J240, J310.

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“…Albeit our treatment of the labour market consequences of short unemployment spells is not as comprehensive, we find that they appear to be worse than the consequences of short self-employment spells. In particular, our results in no way challenge the findings from the earlier literature which suggest that spells of unemployment can in Europe be 'scarring' and have (persistently) negative returns (e.g., Arulampalam, 2001;Burda and Mertens, 2001;Pérez and Sanz, 2005).…”

supporting

confidence: 64%

The Labour Market Consequences of Self-Employment Spells: European Evidence

Hyytinen

¹

,

Rouvinen

²

2006

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. www.econstor.eu No. 1129 Ari Hyytinen* -Petri Rouvinen** Terms of use: Documents in Keskusteluaiheita -Discussion papers THE LABOUR MARKET CONSEQUENCES OF SELF-EMPLOYMENT SPELLS: EUROPEAN EVIDENCE ABSTRACT:We examine how those re-entering paid-employment after a brief selfemployment spell fare upon return using data from the European Community Household Panel. Unconditionally, those re-entering paid-employment appear to have considerably lower wages than those staying in the wage sector. This difference appears to be larger in Europe than in the US. Conditional analysis suggests, however, that the difference is more apparent than real: It seems that Europeans select negatively into (and possibly out-of) selfemployment, i.e., the likelihood of entering (and exiting) entrepreneurship correlates negatively with unobserved ability and/or in-paid-employment productivity. Our analysis of non-wage outcomes indicates that the selection is mostly involuntary and that for highly educated men, the brief self-employment spells are unemployment in disguise.JEL CODES: J230, J240, J310.

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“…One of the conclusions related to our investigation is that young workers follow a two-stage search strategy: they first try to find a job in a preferred occupation, and only afterwards decide on which sector they want to work in (see, for example, Neal, 1999). Involuntary job mobility, on the other hand, has been studied extensively in the displaced workers literature (see, for example, Hamermesh, 1989, Burda and Mertens, 2001, Kuhn, 2002, and Bender and von Wachter, 2006. Displacement has implications both for future wages and for the subsequent labor market history of workers.…”

Section: The Business Cycle and Structural Changementioning

confidence: 96%

Sectoral Transformation, Turbulence, and Labor Market Dynamics in Germany

Bachmann

¹

,

Burda

²

2007

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. The working papers published in the Series constitute work in progress circulated to stimulate discussion and critical comments. Views expressed represent exclusively the authors' own opinions and do not necessarily reflect those of the editors. The secular rise of European unemployment since the 1960s is hard to explain without reference to structural change. This is especially true in Germany, where industrial employment has declined by more than 30% and service sector employment has more than doubled over the past three decades. Using individual transition data on West German workers, we document a marked increase in structural change and turbulence, in particular since 1990. Net employment changes resulted partly from an increase in gross flows, but also from an increase in the net transition "yield" at any given gross worker turnover. In growing sectors, net structural change was driven by accessions from nonparticipation rather than unemployment; contracting sectors reduced their net employment primarily via lower accessions from nonparticipation. While gross turnover is cyclically sensitive and strongly procyclical, net reallocation is countercyclical, meaning that recessions are associated with increased intensity of sectoral reallocation. Beyond this cyclical component, German reunification and Eastern enlargement appear to have contributed significantly to this accelerated pace of structural change. Terms of use: Documents in

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Estimating wage losses of displaced workers in Germany

Cited by 162 publications

References 38 publications

The labour market consequences of self-employment spells: European evidence

The labour market consequences of self-employment spells: European evidence

The Labour Market Consequences of Self-Employment Spells: European Evidence

Sectoral Transformation, Turbulence, and Labor Market Dynamics in Germany

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