Antje Mertens

Overeducation, Undereducation, and the Theory of Career Mobility

The theory of career mobility (Sicherman and Galor, Journal of Political Economy, 98(1), 169–92, 1990) claims that wage penalties for overeducated workers are compensated by better promotion prospects. Sicherman (Journal of Labour Economics, 9(2), 101–22, 1991) was able to confirm this theory in an empirical study using panel data. However, the only retest using panel data so far (Robst, Eastern Economic Journal, 21, 539–50, 1995) produced rather ambiguous results. In the present paper, random effects models to analyse relative wage growth are estimated using data from the German Socio-Economic Panel. It is found that overeducated workers in Germany have markedly lower relative wage growth rates than adequately educated workers. The results cast serious doubt on whether the career mobility model is able to explain overeducation in Germany. The plausibility of the results is supported by the finding that overeducated workers have less access to formal and informal on-the-job training, which is usually found to be positively correlated with wage growth even when controlling for selectivity effects (Pischke, Journal of Population Economics, 14, 523–48, 2001).

Are fixed-term jobs bad for your health?: A comparison of West-Germany and Spain

ABSTRACT In this paper we analyse the health effects of fixed-term contract status for men and women in West-Germany and Spain using panel data. This paper asks whether changes in the employment relationship, as a result of the liberalisation of employment law, have altered the positive health effects associated with employment (Jahoda 1982; Goldsmith et al. 1996). Using information on switches between unemployment and employment by contract type we analyze whether transitions to different contracts have different health effects. We find that unemployed workers show positive health effects at job acquisition, and also find the positive effect to be smaller for workers who obtain a fixed-term job. We also establish surprising differences by gender and country, with women less likely to report positive health effects at job acquisition. For West-Germany, this was found to be a function of the dual-burden of paid and unpaid care within the home.

The Cost of Flexibility at the Margin. Comparing the Wage Penalty for Fixed-term Contracts in Germany and Spain using Quantile Regression

Germany and Spain are typically regarded as rigid economies, yet both have had different experiences of fixed-term jobs. Using quantile regression we find that in West Germany the earnings of permanent and fixed-term workers are most similar among high earners and most dissimilar among low earners. In Spain, the wage penalty shows little variation across the distribution of wages. This pattern was also found for different occupational groups, although there are clear differences in the absolute wage penalty across occupations. In conclusion we caution against generalizing findings from Spain to other rigid European labor markets.

Training and industrial restructuring: Structural change and labour mobility in West Germany and Sweden

While the structural changes that have taken place in the labour markets of the industrialised world over the past decades are well documented, less is known about how individuals respond to this changing environment. This includes the extent of intersectoral mobility during the work career, skill differentials in mobility, the impact of the type of training on mobility and changes in mobility patterns over a long period of time. Against this backdrop, the purpose of this paper is to examine intersectoral labour mobility during the first 15 years of working careers in Sweden and West Germany. The analyses show that individuals in both countries tend to move away from industry into other sectors during their careers, but that this tendency is rather weak. While there are some mobility differences among educational categories, the differences between transition probabilities of German apprentices and Swedish vocational school students are insignificant. In the face of the massive transformation of employment structures, the importance of variation in the curricula is probably minuscule.

Job stability trends and labor market (re-)entry in West Germany 1984 - 1997

This paper investigates whether job stability in western Germany shows any signs of decline and compares the findings to evidence for the US and the UK. Cross sectional data and calendar information from the German Socioeconomic Panel 1984-1997 are combined allowing to check possible influences of oversampling long jobs in cross sectional data. Three different measures are looked at. All indicate that there is a decline in job stability, not fully explained by the business cycle: median elapsed tenure of male workers declined from around 10 years to 8.5, the probability to be in short jobs seems to increase relatively steadily for both males and females, and the hazard for job ending has become increasingly higher despite the fact that the economy experienced the post-unification boom and the current recession. Cox proportional hazard models for different groups in the labor market show that men and women are equally affected. Part-time workers, although generally more likely to end their job, have suffered less. As outsiders are more likely to have difficulties finding stable jobs in rough times separate analyses are carried out those who have entered the job directly from unemployment or non-participation and workers who enter the labor market having just finished their highest degree. These are compared to the insiders who switch jobs directly. While insiders are less likely to leave their new job, outsiders face increasing risks of job termination.

Befristete Verträge und Berufseinstieg

Seit Mitte der 1980er Jahre konnen in Deutschland befristete Vertrage von bis zu zwei Jahren Dauer ohne Angabe von Befristungsgrunden fur erstmalige Beschaftigungen abgeschlossen werden. Im Zuge dieser Lockerung des Kundigungsschutzes wurde oftmals befurchtet, dass befristete Vertrage nicht nur zu schlechteren Karriereaussichten, sondern auch zu einer relativ geringen Bezahlung im Vergleich zu unbefristeten Arbeitsverhaltnissen fuhren wurden. Trafe dies zu, so ware in der Tat zu befurchten, dass Arbeitnehmer in einer unendlichen Schleife von wiederkehrenden Phasen der Arbeitslosigkeit und kurzfristigen Jobs gefangen wurden. Optimistischere Prognosen erhofften sich von solchen Vertragen allerdings eher eine Bruckenfunktion in regulare Beschaftigung, vermehrte Einstellungen und sinkende Arbeitslosigkeit. Obwohl seitdem in der offentlichen Debatte befristete Vertrage als eine Art von verschiedensten „atypischen“ Beschaftigungsformen haufig diskutiert werden, wissen wir noch relativ wenig uber die tatsachlichen Auswirkungen befristeter Beschaftigung auf individuelle Erwerbsverlaufe. Dieses Kapitel versucht einen Teil dieser Forschungslucke zu schliesen. Der vorliegende Beitrag ist unseres Wissens nach die erste Untersuchung, die den Einfluss befristeter Vertrage auf den weiteren Karriereverlauf von Berufsanfangern analysiert.

Fixed-term contracts in East and West Germany

Amid lively debate on the consequences of temporary employment, the paper examines the wages and transitions of temporary employees in Germany using socio-economic panel data from the late 1990s. Compared to simple OLS estimates, using a fixed effects model decreases wage differentials between permanent and temporary workers. A two-step instrumental variables estimator leads to insignificant estimates, suggesting that the contract type is an endogenous variable. Moreover, about 1/5 of male temporary employees experience significantly higher 2 and 10 year wage growth than workers on permanent contracts. Using multinomial logistic regression models we find that many temporary workers move into permanent jobs, often with the same employer. For some temporary employment leads to unemployment, particularly those with low human capital. Positioning ourselves between arguments on the positive and negative consequences of temporary employment, we develop the idea of a two-tier labour market for temporary employment in Germany.