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.
Read press release
Is the 'Central German Metropolitan Region' Spatially Integrated? An Empirical Assessment of Commuting Relations
The 'Central German Metropolitan Region' is a network of cities and their surroundings, located in the three East-German states of Saxony, Saxony-Anhalt and Thuringia. It was founded to bring the bundled strengths of these cities into an inter-municipal cooperation, for making use of the possible advantages of a polycentric region. As theory claims, a precondition for gains from polycentricity is spatial integration of the region. In particular, markets for high skilled labour should be integrated. To assess how this precondition is fulfilled in Central Germany, in the framework of a doubly constrained gravity model the commuting relations between the functional regions of the (until 2013) 11 core cities of the network are analysed. In particular for higher educated employees, the results display that commuting relations are determined not only by distance, but also by the state borders that cross the area.
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.
Read press release
03.12.2015 • 44/2015
Migration Affects Labour Market in Eastern Germany
Migration increasingly affects the labour market in Eastern Germany, having effects on employment and unemployment figures as well as the number of recipients of social assistance benefits under the SGB II regulations. Particularly with countries in Middle and Eastern Europe, countries affected by the European debt and confidence crisis and with people seeking asylum, there are large increases meeting the dimensions in Western Germany. However, migrants overall still form a significantly smaller percentage of the population and other labour market parameters in Eastern Germany, since migration was a lot stronger in Western Germany during the last decades. While on the short run negative effects on unemployment have to be expected, there are also chances, in the medium- and long-term, to soften the expectable demographic problems, if integration and qualification are supported.
Read press release
Labor Market Volatility, Skills, and Financial Globalization
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.
The Skills Balance in Germany’s Import Intensity of Exports: An Input-Output Analysis
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.
Cost of Transaction and the Search for Skilled Workers: A Theoretical Explanation Based on the Theory of Institutions
IWH Discussion Papers,
Germany will have an increasing need of qualified staff across regions and economical sectors. Not only does this concern highly qualified of so-called MINT-professions (mathematics, IT, natural sciences and technology), but expands to qualified laborers of the health business and the arts and crafts sector. This demand cannot be met through the employment of jobless people from within the country, as the demographic change of a shrinking and ageing population works against it. Societal responsibility thus demands to attract qualified laborers as immigrants. In order to improve Germany’s image as a country of immigration for qualified staff, so-called soft-criteria should be strengthened aside hard facts, like income or employment opportunities. Such a policy actively needs to communicate to migrants that they and their family members are welcome to stay for good. Such an approach has recently been discussed as “Willkommenskultur” (“culture of welcoming”). It signals a change of paradigm in German immigration policy. A policy of „Willkommenskultur“ does not yet exist in Germany, at least it has not yet reached a satisfying level to be recognized and accepted as such by potential immigrants. Based on the theoretical conception of the Institutional Economy, approaches of a political change and its implementation are outlined. Those changes would imply governmental, societal and micro-economical shifts and changes.
Skill Content of Intra-european Trade Flows
European Journal of Comparative Economics,
In recent decades, the international division of labor has expanded rapidly in the wake of European integration. In this context, especially Western European high-wage countries should have specialized on (human-)capital intensively manufactured goods and should have increasingly sourced labor-intensively manufactured goods, especially parts and components, from Eastern European low wage countries. Since this should be beneficial for the high-skilled and harmful to the lower-qualified workforce in high-wage countries, the opening up of Eastern Europe is often considered as a vital reason for increasing unemployment of the lower-qualified in Western Europe. This paper addresses this issue by analyzing the skill content of Western European countries’ bilateral trade using input-output techniques in order to evaluate possible effects of international trade on labor demand. Thereby, differences in factor inputs and production technologies have been considered, allowing for vertical product differentiation. In this case, skill content of bilateral exports and imports partially differs substantially, especially in bilateral trade between Western and Eastern European countries. According to the results, East-West trade should be harmful particularly to the medium-skilled in Western European countries.
Increasing Pressure on East German Labor Market for Skilled Labor
Wirtschaft im Wandel,
After a short break, the discussion of a possible labor market shortage for skilled and high skilled workers revived in the public debate. The paper evaluates the results of the latest IAB establishment survey for East German industrial firms with respect to planned employment within the next two years and the associated problems expected by the firms. The analysis distinguishes between the location of the firm, the size of the firms, measured by the number of employees, as well as with respect to the branch of industry the firm belongs to.. The results can be interpreted in a sense that actually there is no severe shortage of skilled labor at a large scale, but in the near future it will become more difficult for firms to find qualified employees.