Local employment growth in West Germany: A dynamic panel approach

In this paper we study the dynamics of local employment growth in West Germany from 1980 to 2001. Using dynamic panel techniques, we analyse the timing of the impact of diversity and specialisation, as well as of the human capital structure of local industries. Diversity has a positive effect on employment growth in the short run, which is stronger in manufacturing than in services. Concerning specialisation we find also positive effects. They are, however, not strong enough to reinforce growth permanently, since there is mean reversion in the process. A positive effect of education is only found in manufacturing. Additionally, we look at the impact of firm size and regional wages on local employment growth.     

The age profile of mobility measures: an application to earnings in West Germany

This paper develops a technique for estimating age-profiles of earnings mobility using conditional kernel density estimation and establishes their statistical properties. Both pointwise and simultaneous confidence intervals are derived. The paper then examines the age-profile of short-run earnings mobility in Germany between 1983 and 1993 using the Socio-Economic Panel data. It turns out that earnings mobility is significantly higher for young people than for elder ones. Mobility declines rather rapidly until the age of thirty-five or so and remains constant thereafter. The shape of the profile does not change significantly during the observation period. © 1998 John Wiley & Sons, Ltd.     

Trust,Social Networks and Enterprise Development: Exploring Evidence from East and West Germany

This paper examines the role of social networks in enterprise development by comparing personal trust (as inherent in social relationships) to collective and institutional trust (derived from the wider cultural, political and legal environment). The findings indicate that there is a shift from personal towards institutional trust as the firm develops and grows, but they also confirm enterprise behaviour being based on a mixture of different trust forms. Moreover, the findings underline the difficulty of studying trust empirically, recommending longitudinal qualitative approaches for further research.     

Pacts for employment and competitiveness in Germany

Pacts for employment and competitiveness (PECs) in Germany reflect a process of organised decentralisation, delegating additional rights and responsibilities for industrial relations agreements to the plant level. PECs are now used by both struggling and prosperous firms. An analysis of the content of recent agreements shows that the economic situation of the firm has a significant impact on changes agreed at the firm level. Changes in working time are associated with the demand for the products and services of a firm while financial concessions by employees are more common in firms with weak profits.     

Fixed-term contracts as sorting mechanisms: Evidence from job durations in West Germany

We estimate the effect of initial episodes under fixed-term contracts (FTCs) on job duration in the further course of the employment spell, using data from the German Socio-Economic Panel (SOEP) from 1985 to 2002 and a statistical matching approach. Our results show that job exit rates are initially much higher if the employment spell began with an FTC. However, exit rates fall below those of comparable spells spent entirely in permanent employment after a few years time. This suggests that FTCs accelerate a sorting process and that they may at least to some part be understood as prolonged probationary periods. Strikingly, the probability of long-term employment of more than five years duration is not lower in spells that are initially concluded as FTCs. Hence, the sorting processes taking place in both forms of contracts lead to similar results.     

Judicial regimes for employment rights disputes: comparing Germany,Great Britain and Japan

This article compares the judicial regimes for resolving individual employment rights disputes in Germany, Great Britain and Japan. First, we consider the form of institutional change; second, we examine the lay judge's role; and third, we assess the effectiveness of the three judicial regimes. We find that Japan made the least institutional change, layering a new procedure on top of an existing one. Paradoxically, however, its lay judges have a more extensive role than their counterparts in Germany and Britain, which established new institutions. As to effectiveness, there are several criteria. British labour courts are currently the least informal and speedy, but the cheapest. In both Britain and Germany, legal norms are publicised as adjudicatory hearings are open to the public and judgments are available for public scrutiny, unlike in Japan.     

Business education and employment relations: the case of Germany

Here the author discusses the interrelationship between the university teaching of business economics and management practice in employment relations in Germany. It concludes that they are mutually supportive. In particular, the educational philosophy is very conducive to the adoption of a human resource management approach.     

Teen employment, poverty, and the minimum wage: Evidence from Canada

In May 2007, the U.S. Congress enacted legislation, which increased the Federal minimum hourly wage from $5.15 to $7.25, over a two year time period. This increase to the minimum wage was the first in nearly a decade and was approved with the objective of alleviating poverty among low-income households. However, a higher minimum wage may result in more unemployment and poverty. We exploit time-series variation in minimum wages set by Canadian provinces between 1981 and 2004. OLS and IV results suggest that a 10% increase in the minimum wage is significantly correlated with a 3%-5% drop in teen employment. Further, a 10% rise in the minimum wage is also significantly associated with a 4%-6% increase in the percentage of families living under Low Income Cut Offs (LICOs). Difference-in-difference estimates from the 1993, 1995, and 1998 waves of the Survey of Consumer Finances (SCF) support these findings as they suggest that income earned by teens constitutes a non-trivial portion of household income for families beneath Low Income Cut Offs. Therefore, a higher minimum wage may paradoxically result in a significant negative shock to household income among low-income families.     

Short sale constraints,dispersion of opinion,and stock overvaluation: Evidence from earnings announcements in China

Using a clean setting in China, we test the Miller (1977) hypothesis that stocks are overvalued in the presence of short sale constraints and dispersion of opinion as an extension of Berkman et al. (2009). We find that stocks with short sale constraints have significantly negative abnormal returns during earnings announcement periods, especially when investors have diverse opinions. These results are robust to alternative measures of abnormal returns and endogeneity concern. The findings help to explain the impact of short sale constraints on pricing efficiency and have important policy implications for relaxing restrictions on short selling and improving regular information disclosure in emerging markets.     

Social networks,employment and worker discouragement: Evidence from South Africa

Social networks are increasingly being recognized as having an important influence on labour market outcomes, since they facilitate the exchange of job related information. Access to information about job opportunities as well as perceptions about the buoyancy of the labour market depend critically on the social structures and the social networks to which labour market participants belong. In this paper, we examine the impact of information externalities generated through network membership on labour market status. Using Census data from South Africa, a country characterized by high levels of unemployment and worker discouragement, we adopt an econometric approach that aims to minimise the problems of omitted variable bias that have plagued many previous studies of the impact of social networks. Our results suggest that social networks may enhance employment probabilities by an additional 3–12%, and that failure to adequately control for omitted variables would lead to substantial over-estimates of the network co-efficient. In contrast, the impact of social networks on reducing worker discouragement is much smaller, at between 1 and 2%.     

Gender gaps across the earnings distribution for full-time employees in Britain: Allowing for sample selection

This paper investigates gender differences across the log wage distributions of British employees working full-time in 2005. The raw gender wage gap shows a tendency to increase across the distribution with a glass ceiling effect indicated. A strong relationship between high skilled, white-collar occupations and carrying out managerial duties with the glass ceiling effect is indicated in the data. After allowing for positive selection into full-time employment by British women, a substantially larger gender earning gap is found: the selection corrected gender wage gap is close to twice the raw gap across most of the earnings distribution. This selection corrected gap is found to be predominantly related to women receiving lower rewards for their characteristics than men. Indeed, the results suggest the gender earnings gap would all but disappear across the earnings distribution if women working full-time received the same returns to their characteristics as men working full-time in Britain do.     

Informal employment and the earnings of home-based home care workers in the United States

Informal employment continues to exist in parallel with formal employment among the US home-based home care workers and undermines the workers' economic security. This study examines the extent to which the earnings of the US home-based home care workers are affected by informal employment arrangements and state labour policies designed to benefit low-wage home care workers. Using a sample of 1,318 home-based home care workers from the 2017 and 2018 Annual Social and Economic Supplement of the Current Population Survey, this study found that (i) informally employed home-based home care workers had a 9% reduction in annual earnings and that (ii) their earnings were not improved by generous state minimum wages and Domestic Workers' Bill of Rights while the earnings of agency employees were. The findings highlight the importance of strong enforcement of labour standards for informally employed home care workers in the United States.     

Industrial disputes in France,West Germany,Italy and the United Kingdom: measurement and incidence

In this article the author draws on research commissioned by the European Community into a detailed examination of the difference in the measurement of disputes in all the member countries before Greece's accession. The findings are presented over the period 1970–80 for the four largest members—France, West Germany, Italy and the United Kingdom.     

Managing multiple forms of employment in the construction sector: implications for HRM

The construction industry is one of the largest and most complex industrial sectors in the UK. The industry's failure to adopt progressive human resource (HR) practices is routinely blamed on the challenges of operating in a fragmented, project‐based environment reliant on subcontracting. This research examines the extent to which existing HR theory accounts for the particular employment context of project‐based organisations operating in volatile markets. Drawing upon case study research from two different divisions within a large contracting firm, this article explores the extent to which different contracting arrangements impinge on attempts to reposition human resource management (HRM) as a strategic function along the business partnering model. Elevating the role of the HR function is found to be difficult to reconcile with the concurrent demands of managing multiple forms of employment arrangements. The research reveals a need for HRM models that account for the specificities of complex, differentiated organisations that operate in multiple environments.     

A change in the earnings penalty for British men with working wives: Evidence from the 1980's and 1990's

Using pooled cross-sectional data from 1984–1989 and 1990–1995, two-stage (Tobit/OLS) regressions show that the penalty on male earnings for working wives, found in earlier research for British males in the early 1980's in managerial and other occupations, is not present in the second half of the 1980's and is largely reversed by the 1990's; in most occupational clusters, managers most notably, it is replaced by an earnings premium. The results are consistent with a view that increases in married women's labor force participation in Britain, coupled with positive assortative mating, have overwhelmed any forces tending to reduce male salaries when their wives work.     

Life-cycle variations in the association between current and lifetime earnings: Evidence for German natives and guest workers

In many economic models a central variable of interest is lifetime or permanent income which is not observed in survey data sets and typically proxied by annual income information. To assess the quality of such approximations, we use a unique source of lifetime earnings — the German pension system — and focus on two important issues that have been largely ignored in the existing literature. The first is how to deal with zero income observations in the analysis of women. The second is whether these approximations differ between natives and guest workers. For female earners, we find that estimates of the associations between current and lifetime income are highly sensitive to the treatment of zero earnings. The reason turns out to be the highly cyclical nature of the labor supply behavior of mothers. Furthermore, immigrants' income proxies are prone to significantly larger attenuation biases over the entire life-cycle. This result is explained by the larger share of annual income variance attributable to the transitory income component for immigrants. Averaging income over up to 15 years alleviates the attenuation bias as well as the difference in biases between natives and guest workers.     

Urban agglomeration, wages and selection: Evidence from samples of siblings

The large and significant relationship between city population and wages has been well-established in the agglomeration literature, and the influence of selection effects on this wage premium is important. This paper contributes new evidence to the understanding of this premium by using two different data sets of siblings in order to estimate the agglomeration premium while controlling for unobserved heterogeneity with a family-specific fixed effect. The inclusion of a familial fixed effect into the regression framework makes the city size wage premium insignificant, and there is a large return to a variable representing the correlation between familial ability and residence in an urban area in all of the data sets used in the analysis. The results are discussed in the context of the existing literature, and they demonstrate the importance of family background and selection effects for interpreting the agglomeration premium, which is small in the fixed effects regression.     

The Composition of the Human Capital Stock and the Factor Content of Trade: Evidence from West(ern) Germany

This study reports the results of a factor content analysis of the sources of West Germany's comparative advantage in 1976, 1980 and 1984, using highly disaggregated skill variables. The county is found to be most abundant in certain skilled manual occupations and a very limited number of professional and technical occupations. The results differ markedly from those reported in similar studies for the UK and the US. The importance of intercounty productivity diferences and the implications of using only a subset of the economy, i.e. manufacturing, in the calculations are assessed. While using only a subset of the economy might have been appropriate in the past when services trade was relatively unimportant, this is no longer the case, especially for Germany with its diferent performance in goods and services trade. It is argued that the explanatory power of comparative advantage as a basis for trade among similarly developed countries is much higher than is commonly perceived when human capital is disaggregated into detailed skill categories that allow the recognition of different skill mixes between countries. The use of a disaggregated ‘labour-based’ neoclassical trade theory is advocated.