An econometric decision model for equalizing regional unemployment in West and East Germany

"Reducing disparities among regions within European countries is the aim of European and national structural policies. In particular, a European grant contributes to the German governmental program for equalizing regional unemployment. The goal is to bring it down to the national average by creating new and/or by safeguarding existing jobs. In the given paper the distribution of available aid among 271 German labor market regions is considered as an econometric decision problem. At first, the dependence of the unemployment rate on the amount of aid is estimated for each eligible region. Using this dependence, the variance of regional unemployment rates is expressed as a function of the regional subsidies. The optimal aid distribution among regions is obtained by minimizing this variance subject to the total budget constraint and administrative restrictions. The optimal figures computed are compared with statistical data for 2000-2002. They show that the regional unemployment in West Germany could be equalized better (with variance 3.50 against the actual 4.40) and with a simultaneous decrease in the average unemployment in West Germany from 7.45 to 7.28%. In East Germany all regions are eligible, implying no administrative constraints and a high optimization flexibility. It enables almost perfectly equalize regional indices down to the variance 0.28 against the actual 9.76. Under the model assumptions, the actual results of the equalizing policy could be attained by half the budget granted. These underused possibilities explain the low efficiency of active labor market policies reported in empirical studies. To improve their performance, some tools for optimally distributing subsidies and predicting their effects are suggested." (author's abstract

Optimizing German regional policy - 2004: a study based on empirical data from 1994 to 2001

"Reducing disparities among regions within European countries together with economic development is the aim of European and national structural policies. In particular, a European grant contributes to the German governmental program for reducing and equal- izing regional unemployment. The goal is to bring unemployment down to the national average by creating new and/or by safeguarding existing jobs, which also contributes to decreasing national unemployment and to GDP growth. The distribution of available aid among 271 German labor market regions is considered as an econometric decision problem with three targets: (1) minimization of unemployment, (2) maximization of GDP, and (3) equalization of regional unemployment rates, subject to the budget constraint and some administrative restrictions. To prepare grounds for optimization, econometric predictions are made for the year 2004 from regional data 1994-2001. Compared with the previous Discussion Paper 115, the given work contains four new items: - The German regional policy is optimized not only with regard to equalizing the regional unemployment, but also with regard to reducing national unemployment and GDP growth. - The source data are extended from a single period of observations 2000-2001 to yearly data 1994-2001. - The analysis of past developments is no longer the goal of the model but a means to make decisions for the future. - The number of control parameters is reduced to a necessary minimum implemented in a user interface in form of tables and ¯gures visualizing the topology of optimal planning. The model can be regarded as a prototype of decision-aid for designing regional policy at national and European levels." [author's abstract

An econometric decision model for equalizing regional unemployment in West and East Germany

Reducing disparities among regions within European countries is the aim of European and national structural policies. In particular, a European grant contributes to the German governmental program for equalizing regional unemployment. The goal is to bring it down to the national average by creating new and/or by safeguarding existing jobs. In the given paper the distribution of available aid among 271 German labor market regions is considered as an econometric decision problem. At first, the dependence of the unemployment rate on the amount of aid is estimated for each eligible region. Using this dependence, the variance of regional unemployment rates is expressed as a function of the regional subsidies. The optimal aid distribution among regions is obtained by minimizing this variance subject to the total budget constraint and administrative restrictions. The optimal figures computed are compared with statistical data for 2000{2002. They show that the regional unemployment in West Germany could be equalized better (with variance 3.50 against the actual 4.40) and with a simultaneous decrease in the average unemployment in West Germany from 7.45 to 7.28%. In East Germany all regions are eligible, implying no administrative constraints and a high optimization flexibility. It enables almost perfectly equalize regional indices down to the variance 0.28 against the actual 9.76. Under the model assumptions, the actual results of the equalizing policy could be attained by half the budget granted. These underused possibilities explain the low efficiency of active labor market policies reported in empirical studies. To improve their performance, some tools for optimally distributing subsidies and predicting their effects are suggested. --European Commission,structural fund grants,regional policy,equalizing regional unemployment rates,econometric optimization model

Constructing the composite indicator "Quality of work" from the third European survey on working conditions

The composite indicator "Quality of work" for comparing European countries is con- structed from data of the Third European Survey on Working Conditions. The main findings are as follows: (a) European countries differ with respect to working conditions statistically more significantly than with respect to earnings; it implies a quite accurate discrimination threshold in ranking countries with respect to quality of work, (b) working conditions and earnings positively depend over the whole of Europe but little correlate within single countries; it indicates at the prevailing role of national determinants over professional or social specificities as contributing to the average quality of work, (c) earnings play no role in subjective satisfaction from work which exclusively depends on working conditions; consequently, more attention should be paid to improving the latter, (d) working conditions of women are significantly better than that of men, which is explained by their inclination to service occupations. Processing ordinal rather than metrical data requires an addendum to the methodology of composite indicators. The corresponding mathematical model is proposed. --Quality of work,European Union,composite indicators,statistical indices,processing ordinal data

A composite indicator of working conditions in the EU-15 for policy monitoring and analytical purposes

"A composite indicator 'Working conditions' for comparing European countries is constructed from data of the Third European Survey on Working Conditions. The main findings are as follows: (a) European countries differ with respect to working conditions statistically more significantly than with respect to earnings; it implies a quite accurate discrimination threshold in ranking countries with respect to working conditions, (b) working conditions and earnings positively correlate over the whole of Europe but correlate little within single countries; it indicates at the prevailing role of national determinants over professional or social specificities as contributing to the average working conditions, and (c) earnings play no essential role in subjective estimations, including job satisfaction, which mainly depends on working conditions; consequently, more attention should be paid to improving the latter. The same approach is applied to constructing a three-dimensional indicator of Working time, reflecting its aspects duration, location (abnormality), and flexibility. It is found that abnormality and flexibility compensate each other, whereas the duration is not affected by two other factors." (author's abstract

Optimizing German regional policy-2004: A study based on empirical data from 1994 to 2001

Reducing disparities among regions within European countries together with economic development is the aim of European and national structural policies. In particular, a European grant contributes to the German governmental program for reducing and equalizing regional unemployment. The goal is to bring unemployment down to the national average by creating new and/or by safeguarding existing jobs, which also contributes to decreasing national unemployment and to GDP growth. The distribution of available aid among 271 German labor market regions is considered as an econometric decision problem with three targets: (1) minimization of unemployment, (2) maximization of GDP, and (3) equalization of regional unemployment rates, subject to the budget constraint and some administrative restrictions. To prepare grounds for optimization, econometric predictions are made for the year 2004 from regional data 1994-2001. The model can be regarded as a prototype of decision-aid for designing regional policy at national and European levels. --European Commission,structural fund grants,regional policy,unemployment,equalizing regional unemployment rates,economic growth

A composite indicator of working conditions in the EU-15 for policy monitoring and analytical purposes

A composite indicator Working conditions for comparing European countries is constructed from data of the Third European Survey on Working Conditions. The main findings are as follows: (a) European countries differ with respect to working conditions statistically more significantly than with respect to earnings; it implies a quite accurate discrimination threshold in ranking countries with respect to working conditions,(b) working conditions and earnings positively correlate over the whole of Europe but correlate little within single countries; it indicates at the prevailing role of national determinants over professional or social specificities as contributing to the average working conditions, and (c) earnings play no essential role in subjective estimations, including job satisfaction, which mainly depends on working conditions; consequently, more attention should be paid to improving the latter. The same approach is applied to constructing a three-dimensional indicator of Working time, reflecting its aspects duration, location (abnormality), and flexibility. It is found that abnormality and flexibility compensate each other, whereas the duration is not aflected by two other factors. --Composite indicators,quality of work,European Union,statistical indices,processing ordinal data

Six families of flexicurity indicators developed at the Hans Boeckler Foundation

"The paper is an overview of over 30 publications on six models with flexicurity indicators developed at the Hans-Böckler-Foundation for monitoring and analysis of flexicurity. The latter is a new European labour market policy which should compensate the ongoing flexibilization of employment relations (resulting in easy dismissals, adjustable working time, and variable wages) by advances in employment security and social security. Flexibility is promoted by employers, whereas trade unions are concerned with security. The models are aimed at analyzing flexicurity from the following viewpoints: (1) neo-liberal, (2) trade-unionist, (3) of the European welfare state, (4) regarding precarious work, (5) regarding professional training and lifelong learning, and (6) regarding trends in collective agreements. All the six models provide empirical evidence of increasing flexibility together with decline of social security and rise of precarious employment. This is a serious warning against improper implementation of flexicurity and one-sided use of this policy in favor of employers. Finally six policy proposals are made: (1) to introduce flexinsurance, (2) to impose workplace tax, (3) to provide basic income, (4) to constrain financial markets, (5) to politicize and restructuralize trade unions, and (6) separate politics from economy." [author's abstract

Six families of flexicurity indicators developed at the Hans Boeckler Foundation

The paper is an overview of over 30 publications on six models with flexicurity indicators developed at the Hans-Böckler-Foundation for monitoring and analysis of flexicurity. The latter is a new European labour market policy which should compensate the ongoing flexibilization of employment relations (resulting in easy dismissals, adjustable working time, and variable wages) by advances in employment security and social security. Flexibility is promoted by employers, whereas trade unions are concerned with security. The models are aimed at analyzing flexicurity from the following viewpoints: (1) neo-liberal, (2) trade-unionist, (3) of the European welfare state, (4) regarding precarious work, (5) regarding professional training and lifelong learning, and (6) regarding trends in collective agreements. All the six models provide empirical evidence of increasing flexibility together with decline of social security and rise of precarious employment. This is a serious warning against improper implementation of flexicurity and one-sided use of this policy in favor of employers. Finally six policy proposals are made: (1) to introduce flexinsurance, (2) to impose workplace tax, (3) to provide basic income, (4) to constrain financial markets, (5) to politicize and restructuralize trade unions, and (6) separate politics from economy. --labour market policy,flexicurity,composite indicators,trade unions

Ein zusammengesetzter Indikator der Arbeitsbedingungen in der EU 15 für Politik-Monitoring und analytische Zwecke

"Aufgrund der Daten der Dritten Europäischen Umfrage für Arbeitsbedingungen wurde für den Vergleich europäischer Staaten ein zusammengesetzter Indikator der Arbeitsbedingungen aufgestellt. Die wichtigsten Forschungsergebnisse sind wie folgt: (a) die Ungleichheit zwischen europäischen Staaten ist statistisch signifikanter hinsichtlich der Arbeitsbedingungen als hinsichtlich des Einkommens; dies impliziert eine recht exakte Untersuchung in der Rangordnung der Länder nach den Arbeitsbedingungen, (b) durchschnittliche Arbeitsbedigungen und Einkommen in den Ländern stehen in einer positiven Korrelation zueinander, aber innerhalb der einzelnen Länder korrelieren sie wenig; das heißt, sie werden durch die nationale Spezifität beeinflusst und (c) die subjektiven Einschätzungen einschließlich der allgemeinen Arbeitszufriedenheit hängen nicht von den Einkünften ab, sondern hauptsächlich von Arbeitsbedingungen; dementsprechend sollte der Verbesserung der Arbeitsbedingungen mehr Aufmerksamkeit geschenkt werden. Zusätzlich wird ein dreidimensionaler Indikator für die Arbeitszeit konstruiert mit Aspekten wie Dauer, Lage (Abnormalität) und Flexibilität. Es ist statistisch bewiesen, dass Abnormalität und Flexibilität der Arbeitszeit sich gegenseitig kompensieren, aber die Dauer der Arbeitszeit ist von ihrer Lage und von ihrer Flexibilität unabhängig." (Autorenreferat)"A composite indicator 'Working conditions' for comparing European countries is constructed from data of the Third European Survey on Working Conditions. The main findings are as follows: (a) European countries differ with respect to working conditions statistically more significantly than with respect to earnings; it implies a quite accurate discrimination threshold in ranking countries with respect to working conditions, (b) working conditions and earnings positively correlate over the whole of Europe but correlate little within single countries; it indicates at the prevailing role of national determinants over professional or social specificities as contributing to the average working conditions, and (c) earnings play no essential role in subjective estimations, including job satisfaction, which mainly depends on working conditions; consequently, more attention should be paid to improving the latter. The same approach is applied to constructing a three-dimensional indicator of Working time, reflecting its aspects duration, location (abnormality), and flexibility. It is found that abnormality and flexibility compensate each other, whereas the duration is not affected by two other factors." (author's abstract