Human capital and innovation in East and West German manufacturing firms

The paper analyses the theoretical and empirical relationship between employment, skill structure and innovation in East and West German manufacturing firms. The econometric part builds on firm data from the Mannheim Innovation Panel 1993, 1994 and 1995. In the German industrial sector, especially in East Germany, employment has declined and the share of highly skilled labour has risen. The econometric investigation of labour demand, based on the translog production function, reveals differences in the firms? behaviour in East and West German manufacturing and between innovative and non-innovative firms. It is shown that complex patterns of substitution between capital and different types of labour emerge, which depend on the stage of economic transformation, the type of firms, wage setting behaviour and public policy. The results suggest that in the current stage of transition subsidising labour might be more effective for creating jobs in East Germany than promoting R&D and capital equipment. Subsidies can be lower the higher the workers? qualification level is. --

Assessing Intergenerational Earnings Persistence Among German Workers

In this study we assess the relationship between father and son earnings among (West) German Workers. To reduce the lifecycle and attenuation bias a novel sampling procedure is developed and applied to the German Socio-Economic Panel (SOEP) 1984-2006. Our preferred point estimate indicates that about 1/3 of the earnings differential in the labor market has been passed on from the generation of fathers to their sons. --Intergenerational Mobility,Lifecycle,Permanent Earnings,Wages

Assessing Intergenerational Earnings Persistence among German Workers

In this study we assess the relationship between father and son earnings among (West) German Workers. To reduce the lifecycle and attenuation bias a novel sampling procedure is developed and applied to the German Socio-Economic Panel (SOEP) 1984-2006. Our preferred point estimate indicates an intergenerational earnings elasticity of 1/3 .Intergenerational Mobility, Lifecycle, Permanent Earnings, Wages

Self-Productivity in Early Childhood

Self-productivity is a crucial feature in the process of skill formation. It means that skills and health acquired at one stage in the life cycle enhance skills and health formation at later stages. This paper presents an empirical investigation of self-productivity in early childhood in Germany. The data are drawn from the mother-child questionnaire of the German Socio-Economic Panel for the birth cohorts 2002-2005. The magnitude of self-productivity varies between skills and over time. A one percent increase in birth weight increase child's noncognitive skills by 0.34 percent and child's health by 0.64 percent at the age of 3-18 months. Until the age of 42 months a one percent increases in child's noncognitive skills enhances child's verbal skills by 0.57 percent and child's everyday skills by 1.04 percent. Furthermore, our estimates suggest synergies between child's health and child's noncognitive skills. --self-productivity,early childhood,skill formation,birth weight,health

Rising Wage Inequality in Germany

This paper investigates the evolution of wages and the recent tendency to rising wage inequality in Germany, based on the German Socio-Economic Panel (GSOEP) for 1984 to 2004. Between 1984 and 1994 the wage distribution was fairly stable. Wage inequality started to increase around 1994 in Germany for all workers and for prime age dependent male workers as well. Rising inequality is not the result of the recent rise in self-employment. In West Germany rising inequality occurred in the lower part of the wage distribution, in East Germany in the upper part of the wage distribution. While residual wage inequality accounted for two-thirds of rising wage inequality in West Germany, in East Germany price effects dominated. In West Germany the group of workers with low tenure experienced higher inequality. --Education,tenure,skill composition,wage inequality,wage rigidity

Assessing intergenerational earnings persistence among German workers

"'The vitality and stability of our democracy - as well as the economy - eventually depend on the social permeability of our society.' (Horst Köhler, German Federal President, 29. 12. 2007, authors' own translation) This statement draws attention to the strong meritocratic beliefs concerning the equality of opportunity that dominate public debates. This is especially true of the education system. But does this general concern translate into a society in which one's economic success in the labor market is independent of the family into which one was born? And if so, to what degree? In this study, we investigate intergenerational earnings persistence among German workers. Our measure of labor market success is real monthly earnings before taxes and social security contributions. The relationship between fathers' and sons' labor market earnings is assessed using samples drawn from the German Socio-Economic Panel (SOEP) 1984-2006. We introduce a novel sampling procedure that allows us to observe father-son pairs at a fairly similar stage in their lives. From a variety of microeconometric estimates (utilizing both OLS and IV methods) we suggest that the best point estimate of intergenerational earnings elasticity among German workers is one-third. Hence, if in the period of investigation a father's permanent labor market earnings increased by 10 percent ( EURO 231 at the mean of our father sample), the son's long-run economic status grew by 3.33 percent. Evaluated at the mean of our sample of sons ( EURO 1,937), this implies a step up of EURO 63 for the son. This figure indicates a lower degree of mobility (and a higher degree of persistence) in Germany compared to preceding studies. In an international perspective, the intergenerational earnings persistence in Germany seems to be lower than that in the United States and higher than that in Sweden. To summarize: there still seems to be substantial intergenerational earnings mobility among German workers, but more persistence than previous research suggested." (Author's abstract, IAB-Doku) ((en)) Additional Information Kurzfassung (deutsch) Executive summary (english)Einkommenshöhe, Intergenerationsmobilität, Väter, Söhne, soziale Herkunft, Sozioökonomisches Panel, Persistenz, erwerbstätige Männer, Erwerbseinkommen, soziale Mobilität, Einkommensunterschied, Westdeutschland, Bundesrepublik Deutschland

Age-dependent Skill Formation and Returns to Education

In this study, we try to connect the economic literature on human capital formation with findings from neurobiology and psychology on early childhood development and self-regulation. Our basic framework for assessing the distribution of agespecific returns to investment in skills is an elaboration of the model of skill formation from Cunha, Heckman et al. (2006) over the life cycle. Our simulation based evidence illustrates the cumulative and synergetic nature of skill formation, the skill multiplier and the shaping role early childhood has for human capital formation, growth and inequality. --Intelligence,self-regulation,human capital,returns to education,life span

Impatience among Preschool Children and their Mothers

Using experimental data of children and their mothers, this paper explores the intergenerational relationship of impatience. The child's impatience stems from a delay of gratification experiment. Mother's impatience has been assessed by a choice task where the mothers faced trade-offs between a smaller-sooner and a larger-later monetary reward with a delay of six or twelve months. The findings demonstrate an intergenerational relationship in short-run decision making. Controlling for mother's and child's characteristics the child's impatience at preschool age is significantly correlated with the six month maternal reservation interest rate.time preferences, impatience, intergenerational transmission, field experiments

Planning for self-employment at the beginning of a market economy: evidence from individual data of East German workers

We investigate the plans of individual workers concerning future self-employment in the former German Democratic Republic (East Germany) shortly before the economic, monetary and social union in June/July 1990. Our data base is the Socio-Economic Panel (SOEP) East. We find that the desire to become an entrepreneur is basically determined by individual and household characteristics, including income and asset indicators, and not as much by the current job situation of the individual. Furthermore, we find evidence of barriers to entry which may come from capital market constraints and institutional restrictions. Due to the ordinal nature of the answers, we used the ordinal logit model for estimation. The corresponding stochastic assumptions are tested extensively using pseudo-Lagrange multiplier tests against omitted variables, non-linearity, asymmetry of distribution, and heteroscedasticity. --

Employment impacts of cleaner production: evidence from a German study using case studies and surveys

The study assesses net employment effects of technical progress which can be expected by the ongoing transition from end-of-pipe technologies towards cleaner production. Empirical evidence is presented on the basis of case studies and panel data including a telephone survey in German industry. The main result ist that cleaner production leads in more firms to a net creation of jobs than end-of-pipe technologies. However, eco-innovations like other innovations tend to require higher qualification. Thus, the demand for skilled and high-skilled labour rises while the demand for unskilled labour decreases. The results imply that supporting cleaner production is not in conflict with labour market policy. Synergies are identified, they are however small and specific. Thus, technology policy in general and supporting cleaner production in particular can not be expected to give substantial contributions to the solution of mass unemployment in Germany without using additional instruments (e.g. concerning a reduction of labour costs, increasing flexibility of labour markets). --