25 Jahre IWH

25 Jahre IWH

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Intergenerational Transmission of Unemployment - Evidence for German Sons

M. Mäder, Steffen Müller, Caroline Schwientek, Regina T. Riphahn
Jahrbücher für Nationalökonomie und Statistik, Nr. 4, 2015
Abstract
This paper studies the association between the unemployment experience of fathers and their sons. Based on German survey data that cover the last decades we find significant positive correlations. Using instrumental variables estimation and the Gottschalk (1996) method we investigate to what extent fathers' unemployment is causal for offsprings' employment outcomes. In agreement with most of the small international literature we do not find a positive causal effect for intergenerational unemployment transmission. This outcome is robust to alternative data structures and to tests at the intensive and extensive margin of unemployment.
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Die Treiber der räumlichen Emergenz und Konzentration der Photovoltaik-Industrie in Deutschland

M. Breul, T. Broekel, Matthias Brachert
Zeitschrift für Wirtschaftsgeographie, Nr. 3, 2015
Abstract
The drivers of the spatial emergence and clustering of the photovoltaic industry in Germany. Following the relatedness literature, we explore to what extent related industries influenced the regional emergence of the photovoltaic (PV) industry. In addition, we shed light on factors explaining selective processes of clustering. We particularly argue that generic resources and resources of related activities have been crucial for the regional concentration in early phases of the industry life cycle. With increasing maturity, industry-specific resources became more important. Based on a unique dataset containing population dynamics of the German PV industry, the hypotheses are tested empirically. Our results partially confirm the assumed beneficial effects of related industries for the emergence of the PV industry. Moreover, we observe changes in the relative importance of factors supporting regional concentration, with industry-specific resources becoming dominant as the industry matures.
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The Levelling Effect of Product Market Competition on Gender Wage Discrimination

Boris Hirsch, Michael Oberfichtner, Claus Schnabel
IZA Journal of Labor Economics, Nr. 19, 2014
Abstract
Using linked employer–employee panel data for West Germany that include direct information on the competition faced by plants, we investigate the effect of product market competition on the gender pay gap. Controlling for match fixed effects, we find that intensified competition significantly lowers the unexplained gap in plants with neither collective agreements nor a works council. Conversely, there is no effect in plants with these types of worker codetermination, which are unlikely to have enough discretion to adjust wages in the short run. We also document a larger competition effect in plants with few females in their workforces. Our findings are in line with Beckerian taste-based employer wage discrimination that is limited by competitive forces.
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Do Better Pre-migration Skills Accelerate Immigrants' Wage Assimilation?

Boris Hirsch, Elke J. Jahn, Ott Toomet, Daniela Hochfellner
Labour Economics, 2014
Abstract
This paper analyzes wage assimilation of ethnic German immigrants to Germany using unique administrative data that include an administrative estimate of immigrants' expected wage in Germany at the time of migration. We find that a 10% higher wage potential translates into a 1.6% higher wage in Germany when also controlling for educational attainment, thus pointing at partial transferability of pre-migration skills to the host country's labor market. We also document that wage assimilation is significantly accelerated for immigrants with higher wage potentials. Our results are both in line with complementarities between pre-migration skills and host country-specific human capital and a U-shaped pattern of immigrants' job mobility with initial downgrading and subsequent upgrading.
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Determinants of Knowledge Exchange Between Foreign and Domestic Enterprises in European Post-transition Economies

Andrea Gauselmann
Journal Economia e Politica Industriale (Journal of Industrial and Business Economics), Nr. 4, 2014
Abstract
The aim of this paper is to contribute to the literature on internationalised research and development by investigating determinants of knowledge and technology transfer between foreign subsidiaries and the local economy in European post-transition economies. This inquiry leads to a better understanding of determinants that influence this knowledge and technology exchange. Applying a logit model, we find that, in particular, the foreign subsidiary’s corporate governance structure, its embeddedness in the multinational enterprise’s internal knowledge base, its own technological capacity, the growth of the regional knowledge stock and the regional sectoral diversification are all positively associated with the transfer of knowledge. Subsidiaries’ investment motives and the relative weight of the sector of investment in the region’s economy appear to be of less importance. The analysis focuses on European post-transition economies, using the example of five selected Central Eastern European countries and East Germany. We exploit a unique dataset, the IWH FDI Micro database, which contains information on one thousand two hundred forty-five foreign subsidiaries in this region.
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Ceremonial Encapsulation and the Diffusion of Renewable Energy Technology in Germany

Iciar Dominguez Lacasa
Journal of Economic Issues, Nr. 4, 2014
Abstract
This inquiry employs ideas advanced by institutionalist thinker Paul Dale Bush to shed light on technology diffusion in Germany’s electrical generation and distribution industry. Research findings suggest that what Bush labeled as ceremonial dominance affects outcomes in technology selection. Evidence suggests that fossil fuel and nuclear technologies have remained favored by power producers despite the externalized environmental costs to society associated with their implementations. Advances in government policy have indeed created a framework that favorably accommodates renewable energy technologies. However, what Bush labeled ceremonial dominance is shown to persist and to contribute to ceremonial encapsulation. Consequently, renewable energy technologies have diffused only to the point that the powers behind the industry remain in dominant positions. Although there is measurable, incremental technological change in the electrical power industry, in light of the urgency of climate change problems, technologies supporting the electrical power system need to be selected more judiciously.
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Lingering Illness or Sudden Death? Pre-exit Employment Developments in German Establishments

Daniel Fackler, Claus Schnabel, J. Wagner
Industrial and Corporate Change, Nr. 4, 2014
Abstract
Using a large administrative data set for Germany, this article compares employment developments in exiting and surviving establishments. Applying a matching approach, we find a clear “shadow of death” effect reflecting lingering illness: in both West and East Germany establishments shrink dramatically already several years before closure, employment growth rates differ strongly between exiting and surviving establishments, and this difference becomes stronger as exit approaches. Moreover, we provide first evidence that prior to exit the workforce becomes on average more skilled, more female, and older in exiting compared to surviving establishments. These effects are more clearly visible in West than in East Germany.
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A Community College Instructor Like Me: Race and Ethnicity Interactions in the Classroom

Robert W. Fairlie, Florian Hoffmann, Philip Oreopoulos
American Economic Review, Nr. 8, 2014
Abstract
Administrative data from a large and diverse community college are used to examine if underrepresented minority students benefit from taking courses with underrepresented minority instructors. To identify racial interactions we estimate models that include both student and classroom fixed effects and focus on students with limited choice in courses. We find that the performance gap in terms of class dropout rates and grade performance between white and underrepresented minority students falls by 20 to 50 percent when taught by an underrepresented minority instructor. We also find these interactions affect longer term outcomes such as subsequent course selection, retention, and degree completion.
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What Can We Learn from Bargaining Models about Union Power? The Decline in Union Power in Germany, 1992–2009

Boris Hirsch, Claus Schnabel
The Manchester School, Nr. 3, 2014
Abstract
Building on the right-to-manage model of collective bargaining, this paper tries to infer union power from the observed results in wage setting. It derives a time-varying indicator of union strength taking account of taxation, unemployment benefits, and the labour market situation and confronts this indicator with annual data for Germany. The results show that union power did not change much from 1992 to 2002 but fell markedly (by about one-third) from 2002 to 2007 in the aftermath of substantial labour market reforms.
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The Regional Distribution of Foreign Investment in Russia: Are Russians more Appealing to Multinationals as Consumers or as Natural Resource Holders?

K. Gonchar, Philipp Marek
Economics of Transition, Nr. 4, 2014
Abstract
This article conducts a plant-level study of the factors affecting foreign direct investment (FDI) inflow to a large opening economy endowed with specific factor advantages. We conclude that the distribution of FDI in Russian regions depends on market access and can be most notably described by the knowledge-capital framework. Factor endowments built by natural resources are more successful in explaining the location decisions of export–platform affiliates. The impact of natural resources depends on how the availability of these resources is measured. The results reject the crowding out effects of resource FDI and prove co-location mode, when service investments are attracted to resource-rich regions. Labour cost advantages better explain the preferences of non-trading service affiliates.
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