The Geographical Mobility of Unemployed Workers: Evidence from West Germany

Using a competing-risk framework of exiting unemployment to jobs in a local or a distant labor market area, this paper investigates whether unemployed individuals in West Germany choose search strategies that favor migrating out of declining regions. Moreover, the paper investigates how such search strategies are affected by the local accommodation of labor market programs. Such programs have been suggested to lead to a regional locking-in effect. Empirical results are obtained from a stratified Cox partial likelihood proportional hazards model that allows for location-specific fixed effects and are compared to estimates from a parametric log-logistic hazard model that takes account of unobserved individual heterogeneity. The findings indicate that unemployed in West Germany are responsive to local labor market conditions and are more likely to leave regions with unfavorable re-employment opportunities. No locking-in effect from labor market programs is found. The probability of migration is found to increase with search time. --interregional mobility,unemployment duration,competing-risk,active labor market policy,unobserved location-specific heterogeneity

Can public employment subsidies render the German construction sector weather proof?

In order to confine excessive levels of temporary layoffs, US firms are taxed - albeit incompletely - according to the unemployment insurance benefits claimed by their laid off workers. In contrast, German construction firms are not charged according to their layoff history and should thus have much higher layoff incentives. However, in case of a weather-induced shortfall of work, a firm's workforce is eligible for a partial subsidy to their employment costs. The level of this subsidy was subject to several reforms throughout the 1990s which provides a unique opportunity for examining the empirical link between layoff incentives and layoff rates. Our analysis is based on large individual administrative data merged with information about local weather conditions and the business cycle. We observe economically plausible effects: the higher the subsidy to employment costs, the less layoffs occur and the less weather-dependent is employment.panel data, temporary layoffs, employment stability

Map Intersection Based Merging Schemes for Administrative Data Sources and an Application to Germany

In many situations the applied researcher wants to combine different data sources without knowing the exact link and merging rule. This paper introduces a theoretical framework how two different regional administrative data sources can be merged. It presents different merging schemes based on the area size of intersections between both regional entities. Estimates of intersection areas are derived from a digital map intersection. The theoretical framework derives conditions for the unbiasedness of estimated intersections and merging rules. The paper also presents conditions under which the choice of merging rule does not matter and illustrates the theoretical results with a simulation study. An application to German counties and federal employment office districts illustrates the applicability of the approach. It delivers merging schemes for regional data sources of the federal German statistical office and of the federal German employment office. --map intersection,administrative data,merging schemes,estimation

Area interpolation in presence of measurement error and an application to German administrative data

"In many situations the applied researcher wants to combine different data sources without knowing the exact link and merging rule. This paper considers different interpolation methods for interpolating attributes from German labor office districts to German counties and vice versa. In particular, we apply dasymetric weighting as an alternative to simple area weighting both of which are based on estimated intersection areas. Since these estimates can be spurious, our theoretical framework extends the well-known Goodchild and Lam (1980) approach to the presence of measurement error in the underlying maps. We also present conditions under which the choice of interpolation method does not matter and confirm the theoretical results with a simulation study. Our application to German administrative data suggests robustness of estimation results of interpolated attributes with respect to the choice of interpolation method. We deliver weighting matrices for regional data sources of the two largest German data producers." (Author's abstract, IAB-Doku) ((en)) Additional Information Anlage zum FDZ-Methodenreport Nr. 01/2006: Stata-Dateien mit den Gewichten: Gewichte.zipprozessproduzierte Daten, Statistisches Bundesamt, Landkreis, Bundesagentur für Arbeit, Arbeitsagenturbezirke, Datenqualität, Datenverarbeitung, Regionalgliederung, Kartierung, regionaler Vergleich, IAB-Beschäftigtenstichprobe, Wirtschaftsforschung, Arbeitsmarktforschung

Unemployment duration in Germany: individual and regional determinants of local job finding, migration and subsidized employment

Recent labor market reforms in Germany aim, among other things, at reducing unemployment by restricting passive unemployment measures, emphasizing local labor market policies and re-structuring public employment services. This paper uses extensive individual administrative and regional aggregate data to explore the extent to which these factors are likely to contribute to the shortening of unemployment duration. For this purpose, we estimate a semi-parametric duration model with three competing exit states. Our results suggest that changes in the unemployment compensation system rather than local employment policies and administrative restructuring efforts meet expected labor market outcomes. In addition, determinants of the length of unemployment vary across exit states. --competing-risk,labor market policy,individual and regional data

What Attracts Human Capital? Understanding the Skill Composition of Interregional Job Matches in Germany

By examining the destination choice patterns of heterogenous labor, this paper tries to explain the skill composition of internal job matching flows in Germany. Estimates from a nested logit model of destination choice suggest that spatial job matching patterns by high-skilled individuals are mainly driven by interregional income differentials, while interregional job matches by less-skilled individuals are much more affected by regional differentials in job opportunities. Regional differentials in non-pecuniary assets slightly contribute to spatial sorting processes in Germany. Such differences in destination choices by skill level are partly modified by different spatial patterns of job-to-job matches and job matches after unemployment. Simulating job matching patterns in a scenario of economic convergence between eastern and western Germany demonstrates that wage convergence is the most effective means of attracting human capital to eastern Germany

The Geographical Mobility of Unemployed Workers : Evidence from West Germany

Using a competing-risk framework of exiting unemployment to jobs in a local or a distant labor market area, this paper investigates whether unemployed individuals in West Germany choose search strategies that favor migrating out of declining regions. Moreover, the paper investigates how such search strategies are affected by the local accommodation of labor market programs. Such programs have been suggested to lead to a regional locking-in effect. Empirical results are obtained from a stratified Cox partial likelihood proportional hazards model that allows for location-specific fixed effects and are compared to estimates from a parametric log-logistic hazard model that takes account of unobserved individual heterogeneity. The findings indicate that unemployed in West Germany are responsive to local labor market conditions and are more likely to leave regions with unfavorable re-employment opportunities. No locking-in effect from labor market programs is found. The probability of migration is found to increase with search time

How Weather-Proof is the Construction Sector? Empirical Evidence from Germany

With the purpose to reduce winter unemployment and to promote all-season employment in the constructions sector, Germany maintains an extensive bad weather allowance system. Since the mid 1990s, these regulations have been subject to several reforms that resemble the range of approaches for employment promotion which can be found in other European countries. We analyse the effect of these reforms on individual unemployment risks using large individual administrative data merged with information about local weather conditions and the business cycle. We find a weaker direct link between seasonal layoffs and actual weather than broadly assumed, since most of the layoffs take place at fixed dates. The reforms under consideration have economically plausible effects; Regulations that limit an employer's financial burden reduce transitions to unemployment and render it less weather-dependent. --panel data,temporary layoffs,employment stability

Crowding out Informal Care? Evidence from a Social Experiment in Germany

This paper evaluates the effects of a professionally assisted consumer-directed program (Personal Budgets) compared to the standard home care programs of the German long-term care insurance. The evaluation makes use of a long-run social experiment at seven different sites with a random assignment into a treatment group receiving personal budgets and a control group in standard home care programs, i.e. an in-kind benefit (agency care) and cash payments. Compared to agency care personal budgets yield better care outcomes with regard to the overall support of formal and informal caregivers. In contrast, personal budgets do not improve care outcomes compared to the much less generous cash payments due to a strong crowding out of informal by formal care. --consumer-directed long-term care,social experiment,personal budget,evaluation,Germany

Reforming Home Care Provision in Germany: Evidence from a Social Experiment

In a long-run social experiment, personal budgets have been tested as an alternative to the home care programs of the German long-term care insurance (LTCI). Due to extending the coverage beyond LTCI approved services and agencies, personal budgets may improve care outcomes compared to the provision of agency care at a constant benefit level, a highly desirable result in light of the ongoing demographic challenge. However, personal budgets also compete with the less generous cash option of the LTCI. Any transition from cash recipients to personal budgets increases LTCI spending, while care outcomes may remain unchanged if informal caregivers are crowded out by formal care. This paper compares care outcomes of the different home care programs and provides a rough cost analysis from the perspective of the LTCI. While personal budgets improve care outcomes compared to agency services, the nationwide introduction of personal budgets increases LTCI spending for former cash recipients without any traceable effect on their care outcomes. --consumer directed long-term care,agency care,social experiment,Germany