Katja Wolf

Cultural Diversity and Local Labour Markets

Suedekum J., Wolf K. and Blien U. Cultural diversity and local labour markets, Regional Studies. The diversity of nationalities of foreign workers in the German labour market has increased considerably over the period 1995–2006. This paper investigates the effects of this diversity for native employees at the local level. The higher is high-skilled foreign employment, the higher are local wages and employment levels for natives. These effects are reinforced the more diverse is the group of high-skilled foreigners. For low-skilled foreigners benefits from diversity are also found, but only conditional on the overall size of this group. These results suggest that cultural diversity benefits native workers by raising local productivity.

The East German wage curve 1993-1998

Abstract This paper examines the East German wage curve using the employment statistics of the Federal Employment Services of Germany (Bundesanstalt fur Arbeit) over the period 1993–1998. The six waves of this panel include a total of 32,188,684 individual employment spells. The statistics comprise the entire population of people gainfully employed and included in the social insurance system. These are classified into 114 administrative districts (Landkreise). Taking into account the endogeneity of unemployment as well as controlling for region and time effects, this paper finds support for the wage curve in East Germany. The overall unemployment elasticity estimate is −0.15 and is higher for female workers than male workers.

NEW EVIDENCE ON THE WAGE CURVE

Following Blanchflower and Oswald, a “wage curve” describes the wage level as a downward-sloping convex curve of the regional unemployment rate. This article makes two major contributions in the analysis of the wage curve. First, it is recognized that potential endogeneity of the regional unemployment rate should be subject to testing not only in combination with regional-specific effects but also in combination with time-specific effects. For this purpose, the authors develop a new estimator, the spatial first difference 2SLS estimator. Second, it is recognized that wages may not only respond to the regional but also to the national unemployment rate. In the empirical analysis, the wage curve for East Germany is estimated using a comprehensive database that provides panel data classified into 114 administrative districts during the 1993 to 1999 period.

Estimating the macroeconomic effects of active labour market policies using spatial econometric methods

Purpose - The paper aims to present an analysis of the indirect and direct effects of active labour market policy measures at the regional level for Western Germany. Design/methodology/approach - Most evaluation studies of active labour market policy focus on the microeconometric treatment effect using individual data and do not account for possible indirect effects like deadweight and substitution effects. The present study uses a dynamic specification of the augmented matching function at the regional level. A dynamic panel data model is estimated using monthly and regional variation of different labour market programmes as explanatory variables. Furthermore, spatial interactions are taken into account by adding a spatially correlated error term. Findings - Almost no significant negative effects are found of the stock of participants in programmes of labour market policy on the number of outflows from unemployment into regular jobs. Thus, contrary to findings at the individual level, no lock-in effect is found. The number of programme participants does not reduce the number of outflows from unemployment. On the other hand when looking not at the stocks but on the outflows from programmes, no positive effects on outflows from unemployment at the regional level are found. Research limitations/implications - Because of data limitations only a period up to six months after completing a programme is used. Originality/value - The authors distinguish between the effects of the stock of programme participants and of the outflows from programmes. Furthermore, the authors account for spatially correlated error terms by using a GM estimator proposed by Mutl in 2006.

Disentangling sector and status effects in German employment growth

From 1992 to 2006, part-time employment in western Germany has grown by 83%, whereas full-time employment has shrunk by 15%. In addition, employment schemes vary substantially across industries and industries which are themselves developed differently. The paper analyses the extent to which the divergence of status-specific employment can be explained by factors inherent in full-time or part-time employment (status effect) or by changes in the sectoral composition (sector effect). A regression-analogue shift–share model is estimated. Economic variables like unit labour costs and output gap are controlled. As a dynamic panel data model is specified, a bias-corrected least squares dummy variable estimator is used. In a second step, the fixed effects of the estimation into parameters for employment status and 16 sectors are decomposed. The results show that status-specific characteristics dominantly explain changes in employment patterns.

Do Lower Caseloads Improve the Performance of Public Employment Services? New Evidence from German Employment Offices

The caseworker-to-clients ratio is an important, but understudied, policy parameter that affects both the quality and cost of public employment services that help job seekers find employment. We exploit a large-scale pilot by Germanys employment agency that hired 490 additional caseworkers in 14 of its 779 offices. We find that lowering caseloads caused a decrease in the rate and duration of local unemployment as well as a higher re-employment rate. Disentangling the mechanisms that contributed to this improvement, we find that offices with lowered caseloads increased monitoring and imposed more sanctions but also intensified search efforts and registered additional vacancies.

Dynamic Panel Data Models with Spatial Correlation

Summary This paper presents an overview of recently developed estimation methods for dynamic panel data models with spatial correlation. We discuss the specification, the main assumptions and the implications of the model. The most important estimation strategy is the application of Generalized Method of Moments (GMM). The focus lies on the derivation of the moment conditions, the estimation of the degree of spatial correlation and the specification of the optimal weighting matrix. Finally we estimate an augmented matching function to analyze the effects of active labour market policy programs in Germany using two different weighting schemes.

Active labour-market policies in Germany: do regional labour markets benefit?

ABSTRACT This article examines on a regional level whether active labour market policies (ALMP) improve the matching process. To take the fact of heterogeneous search effectiveness during programme participation into account, we distinguish between current and former programme participants. Our findings based on a regional augmented matching function show that higher search effectiveness due to ALMP is not outweighed by indirect effects on nonparticipants. The total number of matches in a region increases with a higher share of former programme participants among the jobseekers. However, these effects largely differ between programme types. Abbreviation OECD (Organisation for Economic Co-operation and Development)ALMP (active labour market policy)

Do Lower Caseloads Improve the Performance of Public Employment Services? New Evidence from German Employment Offices: Do lower caseloads improve public employment services?

The caseworker‐to‐clients ratio is an important, but understudied, policy parameter that affects both the quality and cost of public employment services that help job seekers find employment. We exploit a large‐scale pilot by Germanys employment agency, which hired 490 additional caseworkers in 14 of its 779 offices. We find that lowering caseloads caused a decrease in the rate and duration of local unemployment as well as a higher re‐employment rate. Disentangling the mechanisms that contributed to this improvement, we find that offices with lowered caseloads increased monitoring and imposed more sanctions but also intensified search efforts and registered additional vacancies.

Do Regions Benefit from Active Labour Market Policies? A Macroeconometric Evaluation Using Spatial Panel Methods

Dauth W., Hujer R. and Wolf K. Do regions benefit from active labour market policies? A macroeconometric evaluation using spatial panel methods, Regional Studies. The effect of active labour market policies on all job seekers in a region is assessed using the variation in the participation in these programmes across regions over time. The starting point is an augmented regional matching function, which is extended by allowing for a heterogeneous search effectiveness parameter for current participants and job seekers who finished a measure recently. A spatial dynamic panel data model is estimated by using a quasi-ML estimation procedure. It is found that job schemes in the non-profit sector, wage subsidies and advancement of apprenticeships significantly increase the regional number of matches.