The Economic Development of Saxony-Anhalt since 1990
Oliver Holtemöller, Axel Lindner
Abstract
This article describes the economic development of Saxony-Anhalt since 1990 in the context of the East German transition from a centrally planned economy to a market economy. In the early 1990s the economy of Saxony-Anhalt caught up quickly with West Germany, mainly because the capital stock was modernized and expanded. Convergence, however, has almost come to a halt for some time now and gross domestic product per employed person is still about 20% below the West German level. The challenge for economic policy is to further the catching-up process by fostering research and innovation and improving the skills of the workforce.
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Produktivitätsunterschiede zwischen West- und Ostdeutschland und mögliche Erklärungsfaktoren. Ergebnisse aus dem IAB-Betriebspanel 2016
Steffen Müller, Eva Dettmann, Daniel Fackler, Georg Neuschäffer, Viktor Slavtchev, Ute Leber, Barbara Schwengler
IAB-Forschungsbericht 16/2017,
2017
Abstract
After several years of prosperity, the economic situation of German establishments improved further in 2016. Though the productivity in East German establishments converged slightly to the West German level, a significant productivity gap between both parts of Germany still remains. Differences in the economic structure can only explain a small part of this persistent gap: a Blinder-Oaxaca decomposition suggests that the different sector composition, lower exports and lower capital intensity of East German establishments explain only about one-fifth of the backlog. The observed positive economic development is associated with a further increase in firm profitability and total employment in the establishments in both parts of Germany. It is reflected also in a further increase in the demand for skilled personnel. Even though the majority of the demand could be met in 2016, one-third of all offered jobs remained vacant. As in the past, especially establishments in construction and business services as well as very small establishments, particularly in East Germany, faced considerable recruitment problems. The occupational skill requirements increased slightly over time. The proportion of jobs for skilled workers is on average higher in East German establishments than in West Germany, suggesting a higher formal qualification level of employees in East Germany. Looking at the personnel structure, a significant increase in the share of atypical employment, particularly part-time jobs and marginal employment, over the last years become visible. The participation of establishments in vocational training remains relatively stable: about half of the enterprises that are authorized to provide vocational training do actually train apprentices. However, the corresponding fraction in East Germany is significantly lower since the economic crisis. In contrast, the share of vacant apprenticeship positions there is much higher than in West German establishments, pointing to major problems in finding suitable applicants. The share of employees participating in further training is about one third for several years. As in the past workers in low-skilled occupations participate only about half as often in training as employees in qualified jobs.
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Complex-task Biased Technological Change and the Labor Market
Colin Caines, Florian Hoffmann, Gueorgui Kambourov
Review of Economic Dynamics,
April
2017
Abstract
In this paper we study the relationship between task complexity and the occupational wage- and employment structure. Complex tasks are defined as those requiring higher-order skills, such as the ability to abstract, solve problems, make decisions, or communicate effectively. We measure the task complexity of an occupation by performing Principal Component Analysis on a broad set of occupational descriptors in the Occupational Information Network (O*NET) data. We establish four main empirical facts for the U.S. over the 1980–2005 time period that are robust to the inclusion of a detailed set of controls, subsamples, and levels of aggregation: (1) There is a positive relationship across occupations between task complexity and wages and wage growth; (2) Conditional on task complexity, routine-intensity of an occupation is not a significant predictor of wage growth and wage levels; (3) Labor has reallocated from less complex to more complex occupations over time; (4) Within groups of occupations with similar task complexity labor has reallocated to non-routine occupations over time. We then formulate a model of Complex-Task Biased Technological Change with heterogeneous skills and show analytically that it can rationalize these facts. We conclude that workers in non-routine occupations with low ability of solving complex tasks are not shielded from the labor market effects of automatization.
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09.09.2016 • 38/2016
The Perception of Financial Inferiority Nurtures Negative Attitudes Towards Foreigners
When people feel that their own economic status is inferior to the economic status of a relevant peer group, it becomes more likely that they develop negative attitudes towards foreigners. This link was found in a new study of the Halle Institute for Economic Research (IWH) – Member of the Leibniz Association. The effect is particularly strong with respect to foreigners from low-wage countries.
Walter Hyll
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16.12.2015 • 45/2015
German Economy: Strong domestic demand compensates for weak exports
The upturn of the German economy is expected to gain further momentum as a consequence of strong domestic demand. Real gross domestic product is expected to increase by 1.6% in 2016. Consumer prices are expected to rise by 0.9%. Unemployment is expected to rise slightly because it will take time to integrate refugees into the labour market.
Oliver Holtemöller
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Was wissen wir über Betriebsschließungen? Erkenntnisse für West- und Ostdeutschland
Daniel Fackler, Claus Schnabel
Wirtschaftsdienst,
No. 2,
2015
Abstract
This paper reports the results of several investigations into the determinants of company shutdowns using administrative data for Germany. We show that between 1975 and 2008, the average shutdown rate has risen considerably in western Germany. For most of the time, shutdown rates in eastern Germany were higher, but they have converged to the western level recently. The shutdown risk falls with company size and is substantially higher for young companies. Shutdown rates initially decline as companies age, reaching a minimum at ages 15 to 18, and then rise again. Companies begin to shrink several years before closure, and the remaining workforce becomes on average more skilled, more female and older in companies about to close compared to surviving ones.
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Labor Market Volatility, Skills, and Financial Globalization
Claudia M. Buch, C. Pierdzioch
Macroeconomic Dynamics,
No. 5,
2014
Abstract
We analyze the impact of financial globalization on volatilities of hours worked and wages of high-skilled and low-skilled workers. Using cross-country, industry-level data for the years 1970–2004, we establish stylized facts that document how volatilities of hours worked and wages of workers with different skill levels have changed over time. We then document that the volatility of hours worked by low-skilled workers has increased the most in response to the increase in financial globalization. We develop a dynamic stochastic general equilibrium model of a small open economy that is consistent with the empirical results. The model predicts that greater financial globalization increases the volatility of hours worked, and this effect is strongest for low-skilled workers.
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How Can Skill Mismatch be Measured? New Approaches with PIAAC
Daniela Ackermann-Piek, Anja Perry, Simon Wiederhold
Methods, Data, Analyses,
No. 2,
2014
Abstract
Measuring skill mismatch is problematic, because objective data on an individual skill level are often not available. Recently published data from the Program for the International Assessment of Adult Competencies (PIAAC) provide a unique opportunity for gauging the importance of skill mismatch in modern labor markets. This paper systematically compares existing measures of skill mismatch in terms of their implications for labor market outcomes. We also provide a new measure that addresses an important limitation of existing measures, namely, assigning a single competency score to individuals. We find that the importance of skill mismatch for individual earnings differs greatly, depending on the measure of mismatch used.
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The Skills Balance in Germany’s Import Intensity of Exports: An Input-Output Analysis
Udo Ludwig, Hans-Ulrich Brautzsch
Intereconomics,
No. 2,
2014
Abstract
In the decade prior to the economic and financial crisis, Germany’s net exports increased in absolute terms as well as relative to the growing level of import intensity of domestically produced export goods and services. This article analyses the direct and indirect employment effects induced both by exports as well as by of the import intensity of the production process of export goods and services on the skills used. It shows that Germany’s export surpluses led to positive net employment effects. Although the volume of imports of intermediate goods increased and was augmented by the rise in exports, it could not undermine the overall positive employment effect.
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Has Labor Income Become More Volatile? Evidence from International Industry-Level Data
Claudia M. Buch
German Economic Review,
No. 4,
2013
Abstract
Changes in labor market institutions and the increasing integration of the world economy may affect the volatility of capital and labor incomes. This article documents and analyzes changes in income volatility using data for 11 industrialized countries, 22 industries and 35 years (1970–2004). The article has four main findings. First, the unconditional volatility of labor income has declined in parallel to the decline in macroeconomic volatility. Second, the industry-specific, idiosyncratic component of labor income volatility has hardly changed. Third, cross-sectional heterogeneity is substantial. If anything, the labor incomes of high- and low-skilled workers have become more volatile relative to the volatility of capital incomes. Fourth, the volatility of labor income relative to the volatility of capital income declines in the labor share. Trade openness has no clear-cut impact.
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