'Marginal Employment' and the Demand for Heterogenous Labour: Empirical Evidence from a Multi-factor Labour Demand Model for Germany

We develop a structural multi-factor labour demand model which distinguishes between eight labour categories including non-standard types of employment such as marginal employment. The model is estimated for both the number of workers and total working hours using a new panel data set. For unskilled and skilled workers in full-time employment, we find labour demand elasticities similar to previous estimates for the west German economy. Our new estimates of own-wage elasticities for marginal employment range between -.4 (number of male workers in west Germany) to -1 (working hours for women). We illustrate the implications of these estimates by simulating the likely labour demand effects of the recent increase of employers' social security contributions (SSC) on marginal employment in Germany.Multi-factor labour demand for heterogenous labour, marginal employment

When Can We Trust Population Thresholds in Regression Discontinuity Designs?

A recent literature has used variation just around deterministic legislative population thresholds to identify the causal effects of institutional changes. This paper reviews the use of regression discontinuity designs using such population thresholds. Our concern involves three arguments: (1) simultaneous exogenous (co-)treatment, (2) simultaneous endogenous choices and (3) manipulation and precise control over population measures. Revisiting the study by Egger and Koethenbuerger (2010), who analyse the relationship between council size and government spending, we present new evidence that these three concerns do matter for causal analysis. Our results suggest that empirical designs using population thresholds are only to be used with utmost care and confidence in the precise institutional setting.Regression discontinuity design, population thresholds, local elections, government spending

Marginal employment: Stepping stone or dead end? : evaluating the German experience

"'Marginal employment', i. e. employment with low working hours and earnings not covered by social security, has been gaining importance in the German economy over the past decade. Using a large newly available panel data set from the Employment Statistics of the Federal Employment Agency and statistical matching techniques, we analyse the effects of marginal employment on future individual outcome variables such as unemployment, regular employment and earnings. In addition to average treatment effects, we calculate dynamic and cumulative treatment effects accounting for total time spent in various labour market states and related earnings over a period of three years. We restrict the analysis to men and estimate the treatment effects separately for eastern and western Germany as well as for older workers and those workers who are likely to top up unemployment benefits with earnings from marginal employment. We find that marginal employment (i) does not affect time spent in regular employment within a three-year observation period, (ii) reduces future unemployment, where (iii) the effects on unemployment are to be seen as transitory. Furthermore, it (iv) slightly increases cumulated future earnings on average, and (v) is associated with a small negative cumulative earnings effect for older workers in western Germany." (Author's abstract, IAB-Doku) ((en)) Additional Information Kurzfassung (deutsch) Executive summary (English)geringfügige Beschäftigung - Auswirkungen, Berufsverlauf, Beschäftigungseffekte, Einkommenseffekte, Arbeitslosigkeit, Erwerbstätigkeit, regionaler Vergleich, Mini-Job, arbeitslose Männer, Substitutionseffekte, BA-Beschäftigtenpanel, Ostdeutschland, Westdeutschland, Bundesrepublik Deutschland

Divided Government versus Incumbency Externality Effect: Quasi-Experimental Evidence on Multiple Voting Decisions

This paper explores the interdependency of political institutions from the voter's perspective. Specifically, we are interested in three questions: (1) Does the partisan identity of the local mayor influence the voter's decision in the subsequent town council election?; (2) Does this partisan identity influence in ensuing higher level elections?; and (3) Do voters condition their vote for the mayor on the result of the last council election? We collected a unique data set for Germany in which we link election results for different political institutions at the municipal level. To identify causal effects, we rely on a regression discontinuity design focusing on close election outcomes. We find that the party of the mayor receives a bonus of 4-5 percentage points in vote share in the subsequent town council elections if, and only if, mayoral and council elections are held simultaneously. With regard to higher level elections, we find no effect for the party identity of the mayor on federal and European election outcomes. Using run-off mayor races, which are held shortly after council elections, we show that voters punish parties that performed strongly in the council election. To explain our empirical findings, we explore two mechanisms from the theoretical literature. We conclude that there is evidence both for an incumbency externality effect as well as a preference for divided government effect in opposite directions.Regression discontinuity design, municipality data, local election results, divided government effect, incumbency externality effect

Incumbency, Party Identity and Governmental Lead: Evidence for Heterogeneous Incumbency Effects for Germany

Do incumbents in an election have an advantage, and if so, are these advantages heterogeneous across parties or government and opposition? We first present a theoretical discussion on the possible heterogeneity of incumbency effects in a pure two-party system. Then, we estimate the incumbency effect for the direct district candidates in German federal and state elections using a regression discontinuity design (RDD). When studying the heterogeneity in these effects, we find that incumbents from both large parties, the center-right CDU and the center-left SPD, have an advantage only if the SPD is in government. This effect is robust and shows even in state elections that are unrelated to federal elections - calling into question the findings of average incumbency effects in the literature. Because this effect is stronger in the East than in the West and only shows post reunification, we hypothesise that the emergence of the socialist party "The Left" may be behind this heterogeneity.incumbency advantage, regression discontinuity design, federal elections, state elections

"Marginal Employment": Stepping Stone or Dead End? Evaluating the German Experience

"Marginal Employment", i.e. employment at low working hours and earnings not covered by social security, has been gaining importance in the German economy over the past decade. Using a large newly available panel data set and statistical matching techniques, we analyse the effects of marginal employment on future individual outcome variables such as unemployment, regular employment and earnings. In addition to average treatment effects, we calculate dynamic and cumulative treatment effects accounting for total time spent in various labor market states and related earnings over a period of three years. We find that marginal employment (i) does not affect time spent in regular employment within a three-years' observation period, (ii) reduces future unemployment, (iii) slightly increases cumulated future earnings, on average, and (iv) is associated with a small negative cumulative earnings effect for older workers in west Germany.Marginal employment, social security contributions, wage subsidies, labour market policy, evaluation of treatment effects

Public Good Provision, Commuting and Local Employment

This paper assesses the differential impact of the local availability of grammar schools on local employment depending on the openness of a jurisdiction, measured by commuting costs. Commuting costs matter as they influence workers' reservation wage. While the reservation wage depends on public good provision in jurisdictions with high commuting costs, it does not so in jurisdictions with low commuting costs as workers' outside option is to commute and not to move away. We test these predictions using local grammar school closures in East Germany after 2000. In line with the predictions we find that school closures reduced employment only in jurisdictions with high commuting costs. Reassuringly, house prices responded, however, similar in both types of jurisdictions which rules out that differences in preferences are driving our results

Spatial econometric evidence on debt in German municipalities

Through an intertemporal budget constraint, jurisdictions may gain advantages in tax and spending competition by 'competing' on debt. While the existing spatial econometric literature focuses on tax and spending competition, very little is known about spatial interaction via public debt. This paper estimates the spatial interdependence of public debt among German municipalities using a panel on municipalities in the two largest German states from 1999 to 2006. We find significant and robust interaction effects between debt of neighboring municipalities, which we compare to spatial tax and spending interactions. The results indicate that a municipality increases its per capita debt by 16-33 Euro as a reaction to an increase of 100 Euro in neighboring municipalities

Ein Fall für zwei Hochschulen: Entwicklung eines modularen Manuals zur Gestaltung von Fallstudienseminaren im virtuellen Raum

Das Projekt „Ein Fall für zwei Hochschulen“ wird vom Sächsischen Staatsministerium für Wissenschaft, Kultur und Tourismus (SMWK) gefördert. Ziel des laufenden Projektes ist es ein bereits erprobtes didaktisch-methodisches Framework weiterzuentwickeln und in einem Manual aufzuarbeiten. Dieses Manual soll Lehrende unterschiedlicher Hochschultypen und Fachdisziplinen unterstützen, effizient Lehrmaterialien und Inhalte, sowie die organisatorische Struktur für eine fallstudienbasierte, hochschultypübergreifende und virtuelle Lehrveranstaltung zu erarbeiten und gewinnbringend in ihrer Lehre einzusetzen