Enzo Weber

A new look at the discouragement and the added worker hypotheses: applying a trend–cycle decomposition to unemployment

This article proposes an unobserved components approach to disentangle the influence of unemployment on labour participation into a permanent and a cyclical part, connected to discouragement and added worker effect, respectively. By splitting up the participation effect of changes in the unemployment rate, our analysis differs profoundly from previous studies that present the net of both or only a single effect. The results for Germany confirm that both the discouragement and the added worker effect exist, but different age groups respond differently to permanent and transitory changes in the unemployment rate.

Long-term unemployment and labour force participation: a decomposition of unemployment to test for the discouragement and added worker hypotheses

ABSTRACT We sharpen tests for ‘discouragement’ and ‘added worker’ effects by splitting the explanatory variable – the unemployment rate – into a short-term component and a long-term component. While short-term unemployment (STU) might not result in additional workers on a large scale, long-term unemployment (LTU) reduces household income more, increasing the need for additional income. On the other hand, it may discourage older workers for psychological and sociological reasons. Applying our model to the German labour market, these hypotheses could be confirmed. Even for men, about whom only a few empirical studies on this issue are available, distinguishing between STU and LTU reveals added worker as well as discouragement effects.

Wirtschaft 4.0 und die Folgen für Arbeitsmarkt und Bildung

Der Einsatz neuer Technologien, die eine interaktive Vernetzung zwischen Produkt, Maschine und Arbeitskraft, aber auch eine horizontale (zwischen Unternehmen, Zulieferern und Kunden) und vertikale Integration (zwischen den Einheiten innerhalb des Betriebs) ermoglichen, wird als Chance fur den industriellen Sektor gesehen. Hier werden die Ergebnisse einer Studie vorgestellt, die die Wirkungen der 4.0-Digitalisierung auf Wirtschaft und Arbeitsmarkt in einem umfassenden Szenario analysiert. Hierbei wird der Blickwinkel gegenuber der „Industrie 4.0“-Vorgangerstudie geweitet und die Umsetzung einer „Wirtschaft 4.0“ inklusive der Digitalisierung im Dienstleistungssektor betrachtet.

Stochastic Forecasting of Labor Supply and Population: An Integrated Model

This paper presents a stochastic model to forecast the German population and labor supply until 2060. Within a cohort-component approach, our population forecast applies principal components analysis to birth, mortality, emigration, and immigration rates, which allows for the reduction of dimensionality and accounts for correlation of the rates. Labor force participation rates are estimated by means of an econometric time series approach. All time series are forecast by stochastic simulation using the bootstrap method. As our model also distinguishes between German and foreign nationals, different developments in fertility, migration, and labor participation could be predicted. The results show that even rising birth rates and high levels of immigration cannot break the basic demographic trend in the long run. An important finding from an endogenous modeling of emigration rates is that high net migration in the long run will be difficult to achieve. Our stochastic perspective suggests therefore a high probability of substantially decreasing the labor supply in Germany.