Interaction of Public and Private Employment: Evidence from a German Government Move

We use the move of the seat of the German government from Bonn to Berlin in 1999 to test competing views about the impact of public employment on private sector activity in a local labor market. A relocated public sector job might create new jobs in an area as it increases demand for locally-produced goods and services, or crowd out existing jobs due to upward pressure on housing rents. Using employment data from a panel of a 50% sample of establishments across 190 Berlin postcodes, we apply a treatment intensity approach which takes the possibility of spillovers into account. Results indicate that the arrival of 100 public sector jobs into an area generates 55 additional jobs in the private sector. There is evidence of spillovers: relocations up to a distance of 1km from a postcode boundary increases employment in the private sector by 36 jobs. These effects are coming through job gains in the service sector, while manufacturing employment is not influenced by the relocation

The impact of public employment on private sector activity: Evidence from Berlin

We use the move of the seat of the German government from Bonn to Berlin in 1999 to test competing views about the impact of public employment on private sector activity in a local labor market. Using employment data from a 50% sample of establishments across 190 Berlin postcodes, we apply a treatment intensity approach which takes the possibility of spillovers into account. Results indicate that the arrival of 100 public sector jobs into an area generates 55 additional jobs in the private sector. There is evidence of spillovers: relocations up to a distance of 1km from a postcode boundary increases employment in the private sector by 36 jobs. These effects are coming through job gains in the service sector, while manufacturing employment is not influenced by the relocation

Reallocation Effects of the Minimum Wage

We investigate the wage, employment and reallocation effects of the introduction of a nationwide minimum wage in Germany that affected 15% of all employees. Based on identification designs that exploit variation in exposure across individuals and local areas, we find that the minimum wage raised wages, but did not lower employment. It also led to the reallocation of low-wage workers from smaller to larger, from lower- to higher-paying, and from less- to more-productive establishments. This worker upgrading accounts for up to 17% of the wage increase induced by the minimum wage. Moreover, at the regional level, average establishment quality increased in more affected areas in the years following the introduction of the minimum wage

The Effect of Minimum Wages on Labour Market Flows Evidence from Germany

Using a linked employer-employee data set on the German construction industry, we analyse the effects of the introduction of minimum wages in this sector on labour market dynamics at the establishment level, i.e. turnover and churning flows, as well as accessions and separations and their underlying worker flows. The fact that minimum wages in Germany are sector-specific enables us to apply a between approach using other industries as control groups in a difference-in-differences framework. Furthermore, we use a within approach with high-wage workers as control group. While the within approach shows that the minimum wage reduced worker flows in East Germany, the between approach yields positive effect on labour market dynamics in West Germany. Our results can be explained by differences between East and West Germany with respect to the bite of the minimum wage, as well as the much higher prevalence of posted workers in West Germany. Furthermore, spillover effects to highwage workers are likely to have played a role in East Germany.In dem Papier werden die Auswirkungen der Mindestlohneinführung im deutschen Bauhauptgewerbe auf Arbeitsmarktdynamiken untersucht, wobei die Analyse von Einstellungen und Trennungen sowie der damit zusammenhängenden Arbeitsmarktübergänge auf Betriebsebene erfolgt. Dabei kommt ein einzigartiger Linked Employer-Employee Datensatz zum Einsatz. Da der Mindestlohn zunächst nur im Bauhauptgewerbe eingeführt wurde, können Betriebe einer anderen Branche als Kontrollgruppe in einem Differenz-von-Differenzen-Ansatz genutzt werden (between-Ansatz). Zusätzlich wird ein within-Ansatz verwendet, bei dem Arbeitnehmer mit relativ hohem Lohn innerhalb des Bauhauptgewerbes als Kontrollgruppe dienen. Während der within-Ansatz zeigt, dass der Mindestlohn Arbeiterflüsse in Ostdeutschland reduzierte, bringt der between-Ansatz positive Effekte auf Arbeitsmarktdynamiken in Westdeutschland zutage. Diese Ergebnisse können auf Ost-West-Unterschiede hinsichtlich der Eingriffsintensität des Mindestlohns sowie die deutlich höhere Anzahl entsendeter Arbeitnehmer in Westdeutschland zurückgeführt werden. Zudem sind spillover-Effekte auf Arbeitnehmer mit relativ hohen Löhnen in Ostdeutschland wahrscheinlich

Labour Market Effects of the Minimum Wage Introduction in the Main Construction Sector

On January 1st, 1997, minimum wages were introduced in the German main construction sector. We examine the effects of this wage regulation on various aspects of the labour market of this sector, particularly the effects on wages and employment. In East Germany, at the time of its introduction, the minimum wage was more strongly binding than in West Germany. Furthermore, the wages of a large fraction of the construction workforce in East Germany are close to the minimum wage, which is not the case in West Germany. Our results indicate that the wage floor significantly increased wage growth but had a negligible impact on employment of domestic workers. Because of data restrictions, a causal analysis of the effects on foreign establishments and their employees or on the self-employed is not possible. We caution against drawing conclusions from the results of our study for other industries given the specific characteristics of the main construction sector in Germany

Die veränderliche Situation für Berufseinsteiger in Deutschland

Concurrently with a steady increase of the supply of college educated workers, recent evidence for the U.S. indicated a decline in the demand for and the real wages of this group after 2000. We investigate empirically, whether there has been a similar trend in Germany. Based on comprehensive, long-run administrative data for the years 1975 to 2010, we use a set of employment indicators to analyze labor market patterns of job market entrants. Besides consideration of the developments of education attainment and wages over time, we put a particular focus on changes of the task composition, the chances of entering top-paying jobs, entry wages and wage growth, and skill premia over time. To allow for a detailed analysis, we distinguish four education groups. The empirical picture shows that since the year 2000 job entrants with higher education have experienced decreasing employment shares in top-paying positions. Moreover, starting wages and wage growth have both decreased until the end of the observation period, too. A reason for this has been the substitution of jobs that were formerly executed by lower qualifications. Our findings reveal similarities between Germany and the U.S. in terms of some declining fortunes of the young. However, whereas in the U.S. college educated workers have been affected, the results indicate that in Germany the medium-skilled and low-skilled have been particularly impaired.Jüngere empirische Evidenz für den US-amerikanischen Arbeitsmarkt zeigt, dass gleichzeitig mit dem stetigen Anstieg des Arbeitsangebots von Hochschulabsolventen die Nachfrage und die Reallöhne für diese Gruppe seit dem Jahr 2000 gesunken sind. Die vorliegende Studie untersucht, ob es einen vergleichbaren Trend auch in Deutschland gab. Auf der Grundlage umfangreicher administrativer Daten für die Jahre 1975 bis 2010 berechnen wir eine Reihe von Arbeitsmarktindikatoren, um die Beschäftigungsmuster von Berufseinsteigern zu untersuchen. Neben der Berücksichtigung der Entwicklungen in der Bildungsbeteiligung sowie den Löhnen gehen wir hierzu auf die Änderungen in den beruflichen Tätigkeiten, den Chancen auf eine höherbezahlte Tätigkeit, die Eintrittslöhne sowie das Lohnwachstum und die Bildungsprämien ein. Darüber hinaus betrachten wir vier unterschiedliche Qualifikationsgruppen. Die empirischen Ergebnisse zeigen, dass sich der Anteil von hochqualifizierten Berufseinsteigern in höherbezahlten Tätigkeiten seit dem Jahr 2000 verringert hat. Deutlich wird überdies, dass bis zum Jahr 2010 die Einstiegsgehälter gesunken sind und sich das individuelle Lohnwachstum in den ersten fünf Berufsjahren verringert hat. Ein Grund dafür liegt in der Beschäftigung von Absolventen in Tätigkeiten, die früher von Personen mit geringeren Bildungsabschlüssen ausgeführt wurden. Unsere Ergebnisse bestätigen daher einige Ähnlichkeiten zwischen dem deutschen und dem US-amerikanischen Arbeitsmarkt bezüglich verschlechterter Arbeitsmarktchancen für Berufseinsteiger. Ein wesentlicher Unterschied liegt aber in den Bildungsniveaus: während im US-amerikanischen Arbeitsmarkt vor allem College-Absolventen von diesen Änderungen betroffen sind, sind in Deutschland vor allem die mittel- und geringqualifizierten Berufseinsteiger hinsichtlich ihrer Arbeitsmarktchancen beeinträchtigt