Unions, monopolistic competition and unemployment

This paper develops a general equilibrium dual labour market model which incorporates union bargaining with monopolistically competitive firms. It is shown that not only the degree of union bargaining power but also the market power firms possess on the product market have a positive influence on unemployment. The reason for this is that less intense product market competition increases the negotiated wage rates as well as the price mark-up firms charge over their marginal costs, both of which reduce labour demand. It is also shown that higher competition intensity will force firms to merge to larger units

Unions, efficiency wages and unemployment

This paper develops a dynamic general equilibrium dual labour market model which incorporates both efficiency wages and union bargaining with monopolistically competitive firms. In one sector, a traditional sector produces a homogeneous good and firms face perfect competition on the product market. In the other sector, monopolistically competitive firms produce a horizontally differentiated good. In this sector, unions represent the interests of the workers and through bilateral bargaining with the employers, try to capture some of the rents which accrue here. Further, firms can increase their profits by paying the workers with the highest productivity an efficiency wage. Therefore, there is not only a wage differential between the two sectors, but also within the unionized sector. It is shown that not only the degree of union bargaining power but also the market power firms possess on the product market leads to an increase in unemployment.In einem allgemeinem Gleichgewichtsmodell wird ein unvollkommener dualer Arbeitsmarkt, bei dem in einem Sektor sowohl Effizienzlöhne gezahlt werden als auch Gewerkschaften vertreten sind, die das Lohnniveau für Ihre Mitglieder aushandeln, mit monopolistischer Konkurrenz auf dem Gütermarkt kombiniert. Es zeigt sich, dass nicht nur die Verhandlungsmacht der Gewerkschaften, sondern auch Marktmacht der Unternehmen auf dem Gütermarkt die Arbeitslosigkeit erhöhen. Dies liegt darin begründet, dass zum einen ein höherer Wettbewerbsdruck die Lohnforderungen der Gewerkschaften reduziert und zum anderen die Unternehmen nur einen geringeren Preisaufschlag auf ihre Kosten verlangen können. Beide Effekte führen dazu, dass die Preise für diese Güter sinken, wodurch die Güter- und die Arbeitsnachfrage steigen

Regional disparities in employment of high-skilled foreigners: Determinants and options for migration policy in Germany

We investigate the regional disparities in high-skilled foreign employment in Germany. The importance of different factors which attract highly qualified migrants to specific regions and the role of labour-migration policy is analysed. Our results show that labour-market variables as well as the supply of tertiary education are important for the location choice. Based on these empirical results we discuss options of decentralized migration policy in Germany. --Migration,regional disparities,labour-migration policy,Germany

Globalisation, wage adjustment, and unemployment: An empirical analysis based on the factor price frontier

We investigate the effects of globalisation on the labour market using the factor price frontier. The factor price frontier defines a negative relationship between the real rate of return and the real wage rate. As international capital mobility equalises the real rate of return in all economies, real wages also have to converge. If they do not adjust, unemployment and technical change will result in relatively capitalabundant countries. We estimate the factor price frontier for the United States and for Germany with the Johansen procedure. While the U. S. economy adjusts along a single factor price frontier throughout the sample, there are three distinct frontiers in the German case. The outward shifts of the factor price frontier coincide with significant hikes in unemployment.

Regional unemployment forecasts with spatial interdependencies

"We forecast unemployment for the 176 German labour-market districts on a monthly basis. Because of their small size, strong spatial interdependencies exist between these regional units. To account for these as well as for the heterogeneity in the regional development over time, we apply different versions of an univariate spatial GVAR model. When comparing the forecast precision with univariate time-series methods, we find that the spatial model does indeed perform better or at least as well. Hence, the GVAR model provides an alternative or complementary approach to commonly used methods in regional forecasting which do not consider regional interdependencies." (Author's abstract, IAB-Doku) ((en))Arbeitslosigkeit, regionale Verteilung, Arbeitsmarktprognose, regionale Disparität, Prognoseverfahren, Regionalökonomie, regionaler Arbeitsmarkt, Arbeitsagenturbezirke, Prognosegenauigkeit, Prognosemodell

Labour shortages and replacement demand in Germany: The (non)-consequences of demographic change

Two stylised facts of the German labour market are that first, the demand for highskilled labour has been growing rapidly for a number of years and second, the country is facing a particularly strong demographic change with the expected size of the population decreasing rapidly and the average age of the labour force increasing sharply. This has led to a widely discussed fear of "labour shortages". One of the reasons often stated in the public debate is that within a given time period many more old individuals are retiring than young individuals are entering the labour market. Although there is a certain logic in this argument, it is only prima facie convincing because firstly, a change in labour demand could counteract this effect and secondly, it is unclear whether - given labour demand for the occupations people retire from - people retiring from the labour market are normally 'replaced' by young cohorts entering the labour market. Thirdly, even if the size of a cohort differs between generations, it is by no means clear what the effects on labour supply are as, for example, the participation rates may also differ. We address these issues from a theoretical and empirical perspective. In the theoretical part we focus on the relationship between vacancies and unemployment (labour-market tightness) and show that it does not always increase with demographic change. In the empirical part, we analyse how employment is affected over time by different shares of different age cohorts. We find no evidence that a higher number of retirees in an occupation leads to a higher demand for younger workers. Instead, to a large extent, retirees seem to be "replaced", if they are replaced at all, by middle-aged cohorts who change occupations. Thus, we conclude that the interaction between large retiring cohorts and small entering cohorts within occupations is less direct than is suggested in the public debate.Zwei wichtige Entwicklungen auf dem deutschen Arbeitsmarktes sind, dass erstens die Nachfrage nach hochqualifizierten Arbeitskräften seit einigen Jahren stark gestiegen ist und zweitens, dass sich Deutschland einem besonders raschen demografischen Wandel gegenüber sieht, was sich einerseits darin mainifestiert, dass die erwartete Größe der Bevölkerung rasch sinkt und zweitens das Durchschnittsalter der Bevölkerung rapide ansteigt. Diese Trends haben in Deutschland zu einer Diskussion über Fachkräftemangel geführt. Einer der gerne genannten Argumente in dieser Diskussion ist, dass in den kommenden Jahren viel mehr ältere Menschen in Rente gingen, als neue jüngere in den Arbeitsmarkt eintreten. Obwohl man diesem Argumente eine inhärente Logik nicht absprechen kann, überzeugt es nur auf den ersten Blick, weil erstens Änderungen der Bevölkerungsgröße nicht notwendig mit entsprechenden Veränderungen beim Arbeitsangebot einhergehen müssen, weil zweitens unklar ist, ob ältere Kohorten typischer Weise durch jüngere Kohorten ersetzt werden und weil drittens Anpassungen bei der Arbeitsnachfrage Veränderungen beim Arbeitsangebot kompensieren könnten. In diesem Papier behandeln wir die Frage des demografischen Ersatzbedarfs aus theoretischer und empirischer Perspektive. Theoretisch identifizieren wir Fachkräftemangel mit dem Mindestkriterium, dass sich das Verhältnis von offenen Stellen zu Arbeitslosen vergrößert und zeigen dass das nicht eindeutig für demografische Veränderungen gilt. Im empirischen Teil der Arbeit untersuchen wir, wie die Beschäftigung über die Zeit mit der relativen Größe der unterschiedlichen Alterskohorten zusammenhängt. Wir finden keine Evidenz dafür, dass ein hoher Anteil von älteren Beschäftigten, die den Arbeitsmarkt verlassen, in einem Beruf danach zu einer höheren Nachfrage nach jüngeren Arbeitnehmern führt. Stattdessen findet eine Nachbesetzung - falls sie stattfindet - typischer Weise eher aus den mittleren Altersgruppen durch Berufswechsler statt. Wir schlussfolgern, dass der Zusammenhang zwischen demografischen Veränderungsprozessen und Arbeitsmarktergebnissen, insbesondere im Hinblick auf das Ersatzbedarf-Argument, viel weniger direkt ist, als häufig in der öffentlichen Debatte angenommen wird

Do High-Skilled Immigrants find Jobs Faster than Low-Skilled Immigrants?

This paper investigates the role that pre-immigration skills play in immigrants job-finding processes in Germany. We first show theoretically that the job-finding rate for the high-skilled varies depending on their search strategy: if they are prepared to look for both unskilled as well as skilled jobs (cross-skill matching), then their expected time to find a job is lower compared to the low-skilled. However, if the high-skilled are only prepared to look for and take up skilled jobs (ex post segmented matching), it might be that the high-skilled actually need longer to find a job. We then provide empirical evidence by studying the labour-market integration process of Ethnic Germans, one of the largest immigration groups in Germany, using novel German administrative data. Applying proportional hazard models, our estimates generally support the theoretical predictions: in case of cross-skill matching, the job finding rate of the high- and low-skilled does not differ significantly. However, if the length of time a job match holds is accounted for, then we do find that the high-skilled are significantly faster than the low-skilled. If the high-skilled only search for skilled jobs, the likelihood of finding a job is about 50% lower compared to the low-skilled

Zuwanderung nach Deutschland: Aus dem Ausland kommen immer mehr Akademiker

Spätestens mit Einführung des neuen Zuwanderungsgesetzes im Jahre 2005 hat in Deutschland ein Umdenken in der Integrations- und Zuwanderungspolitik eingesetzt. Neben zahlreichen Maßnahmen zur nachholenden Integration der bereits länger hier lebenden Migranten setzen Politik und Wirtschaft u. a. verstärkt darauf, die Steuerung der Zuwanderung an den Qualifikationen der Migranten auszurichten

Are the Number of Skilled Workers Running Out in Germany? The (Non)-Consequences of Demographic Change

Two stylised facts of the German labour market are that first, the demand for (high-)skilled labour has been growing rapidly for a number of years and second, the country is facing a particularly strong demographic change with the expected size of the population decreasing rapidly and the average age of the labour force increasing sharply. This has led to a widely discussed fear of ''labour-market shortages' whereby employers simply cannot find ''enough' workers because many more are retiring than younger cohorts are entering. Although there is a simple logic in this argument, it is not beyond doubt, because firstly it is neither clear whether the labour demand side could not counteract this effect nor secondly to which precise situation the description ''shortage' actually refers to. We address both issues from a theoretical and empirical perspective. We find no evidence that a high number of retirees across occupations leads to a higher demand for younger workers. Instead, to a large extent, retirees seem to be ''replaced', if they are replaced at all, by middle-aged cohorts who change occupations

Labour Shortages and Replacement Demand in Germany. The (Non-)Consequences of Demographic Change

Two stylised facts of the German labour market are that first, the demand for highskilled labour has been growing rapidly for a number of years and second, the Country is facing a particularly strong demographic change with the expected size of the Population decreasing rapidly and the average age of the labour force increasing sharply. This has led to a widely discussed fear of "labour shortages". One of the reasons often stated in the public debate is that within a given time period many more old individuals are retiring than young individuals are entering the labour market. Although there is a certain logic in this argument, it is only prima facie convincing because firstly, a Change in labour demand could counteract this effect and secondly, it is unclear whether - given labour demand for the occupations people retire from - people retiring from the labour market are normally "replaced" by young cohorts entering the labour market. Thirdly, even if the size of a cohort differs between generations, it is by no means clear what the effects on labour supply are as, for example, the participation rates may also differ. We address these issues from a theoretical and empirical perspective. In the theoretical part we focus on the relationship between vacancies and unemployment (labour-market tightness) and show that it does not always increase with demographic change. In the empirical part, we analyse how employment is affected over time by different shares of different age cohorts. We find no evidence that a higher number of retirees in an occupation leads to a higher demand for younger workers. Instead, to a large extent, retirees seem to be "replaced", if they are replaced at all, by middle-aged cohorts who change occupations. Thus, we conclude that the interaction between large retiring cohorts and small entering cohorts within occupations is less direct than is suggested in the public debate