Semiparametric Estimation of Consumption Based Equivalence Scales: The Case of Germany

Consumption based equivalence scales are estimated by applying the extended partially linear model (EPLM) to the 1998 Income and Consumption Survey (EVS) of Germany. The chosen flexible semiparametric specification is able to capture a large variety of functional forms of household expenditure shares; it yields root-N-consistent parameter estimates and is consistent with consumer theory. The model specification seems to be appropriate for many demographic groups of the survey population. The estimated equivalence scales are mostly lower than the expert equivalence scales of the German social benefits system and the OECD scales. The large standard errors of the estimates indicate that there is still unexplained noise in the data even after constructing homogenous data segments for the estimations. --semiparametric estimation,wild bootstrapping,equivalence scales,social benefits

New Estimates of the Duration and Risk of Unemployment for West-Germany

This paper analyzes changes in the risk of unemployment and changes in the distribution of unemployment duration for the 26 to 41 years old working population in West-Germany during the 1980ties and 1990ties. The comprehensive IAB employment subsample 1975- 1997 is used for the analysis. It contains employment and unemployment trajectories of about 500.000 individuals from West-Germany. The application of flexible nonparametric estimators yields results which are less sensitive to misspecification as it is often the case for parametric hazard rate models. By conditioning on several observable variables such gender, education, marital status etc. we identify significant differences in the first three quintiles of the distribution of the length of unemployment duration. A large share of long term unemployment with only few exits to employment is observed in almost any of the segments. The analysis also considers general evolutions over time and variations along the business cycle. The paper therefore provides a collection of detailed stylized facts about the distribution of unemployment durations in West-Germany during the past two decades. --risk of unemployment,duration of unemployment,German register data,nonparametric analysis

Unemployment durations in West-Germany before and after the reform of the unemployment compensation system during the 1980s

This paper analyzes empirically the distribution of unemployment durations in West- Germany before and after the changes during the mid 1980s in the maximum entitlement periods for unemployment benefits for elderly unemployed. The analysis is based on the comprehensive IAB employment subsample containing register panel data for about 500.000 individuals in West Germany. We analyze two proxies for unemployment since the data do not precisely measure unemployment in an economic sense. We provide a theoretical analysis of the link between the durations of nonemployment and of unemployment between jobs. Our empirical analysis finds significant changes in the distributions of nonemployment durations for older unemployed individuals. At the same time, the distribution of unemployment durations between jobs did not change in response to the reforms. Our findings are consistent with an interpretation that many firms and workers used the more bene cial laws as a part of early retirement packages but those workers who were still looking for a job did not reduce their search effort in response to the extension of the maximum entitlement periods. This interpretation is consistent with our theoretical model under plausible assumptions. JEL: C24, J64, J6

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

Unemployment Durations in West-Germany Before and After the Reform of the Unemployment Compensation System During the 1980s

This paper empirically analyzes the distribution of unemployment durations in West- Germany before and after the changes during the mid 1980s in the maximum entitlement periods for unemployment benefits for elderly unemployed. The analysis is based on the comprehensive IAB employment subsample containing register panel data for about 500.000 individuals in West Germany. We introduce two proxies for unemployment, since the data do not involve a precise economic definition of unemployment. We provide a theoretical analysis of the link between the durations of nonemployment and of unemployment durations between jobs. In our empirical analysis we find significant changes in the distributions of nonemployment durations for older unemployed individuals. At the same time, the distribution of unemployment durations between jobs did not change in response to the reforms. Our findings are consistent with an interpretation that many firms and workers used the more beneficial laws as a part of early retirement packages but those workers who were still looking for a job did not reduce their search effort in response to the extension of the maximum entitlement periods. This interpretation is consistent with a simulation of our theoretical model under economically plausible assumptions. --definition of unemployment,duration analysis,unemployment insurance

Simple nonparametric estimators for unemployment duration analysis

"We consider an extension of conventional univariate Kaplan-Meier type estimators for the hazard rate and the survivor function to multivariate censored data with a censored random regressor. It is an Akritas (1994) type estimator which adapts the nonparametric conditional hazard rate estimator of Beran (1981) to more typical data situations in applied analysis. We show with simulations that the estimator has nice finite sample properties and our implementation appears to be fast. As an application we estimate nonparametric conditional quantile functions with German administrative unemployment duration data." (Author's abstract, IAB-Doku) ((en)) Additional Information Appendix for the FDZ-Methodenreport No. 09/2007: Programme.zipArbeitslosigkeitsdauer, Schätzung - Methode, IAB-Beschäftigtenstichprobe

Reform of Unemployment Compensation in Germany: A Nonparametric Bounds Analysis Using Register Data

Economic theory suggests that an extension of the maximum length of entitlement for unemployment benefits increases the duration of unemployment. Empirical results for the reform of the unemployment compensation system in Germany during the 1980s are less clear. The analysis in this paper is motivated by the controversial empirical findings and by recent developments in econometrics for partial identification. We use extensive administrative data with the drawback that registered unemployment is not directly observed. For this reason we bound the reform effect on unemployment duration over different definitions of unemployment. By exploiting the richness of the data we use a nonparametric approach without imposing critical parametric model assumptions. We identify a systematic increase in unemployment duration in response to the reform in samples that amount to less than 15% of the unemployment spells for the treatment group. --unemployment duration,definition of unemployment,nonparametric bounds analysis,(quantile-) treatment effect

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

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

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