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New Extimates of the Duration and Risk of Unemployment for West-Germany

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  • Ralf A. Wilke

Abstract

This paper analyzes changes in the risk of unemployment and changes in the distribution of unemployment duration for the 26 to 41 years old working population in West-Germany during the 1980ties and 1990ties. The comprehensive IAB employment subsample 1975-1997 is used for the analysis. It contains employment and unemployment trajectories of about 500.000 individuals from West-Germany. The application of flexible nonparametric estimators yields results which are less sensitive to specification errors but they have only a descriptive nature. By conditioning on several observable variables such gender, education, marital status etc. we identify significant differences in the first three quintiles of the unemployment duration distribution. A large share of long term unemployment with only few exits to employment is observed in almost any of the segments. The analysis also considers general evolutions over time and variations along the business cycle. The paper therefore provides a collection of detailed stylized facts about the risk of becoming unemployed and the distribution of unemployment durations in West-Germany during the past two decades.

Suggested Citation

  • Ralf A. Wilke, 2005. "New Extimates of the Duration and Risk of Unemployment for West-Germany," Schmollers Jahrbuch : Journal of Applied Social Science Studies / Zeitschrift für Wirtschafts- und Sozialwissenschaften, Duncker & Humblot, Berlin, vol. 125(2), pages 207-237.
    • Handle: RePEc:aeq:aeqsjb:v125_y2005_i2_q2_p207-237
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    References listed on IDEAS

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    1. Fitzenberger Bernd & Wilke Ralf A., 2010. "Unemployment Durations in West Germany Before and After the Reform of the Unemployment Compensation System during the 1980s," German Economic Review, De Gruyter, vol. 11(3), pages 336-366, August.
    2. Lauer, Charlotte, 2003. "Education and Unemployment: A French-German Comparison," ZEW Discussion Papers 03-34, ZEW - Leibniz Centre for European Economic Research.
    3. Van den Berg, Gerard J., 2001. "Duration models: specification, identification and multiple durations," Handbook of Econometrics, in: J.J. Heckman & E.E. Leamer (ed.), Handbook of Econometrics, edition 1, volume 5, chapter 55, pages 3381-3460, Elsevier.
    4. Hunt, Jennifer, 1995. "The Effect of Unemployment Compensation on Unemployment Duration in Germany," Journal of Labor Economics, University of Chicago Press, vol. 13(1), pages 88-120, January.
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    Cited by:

    1. Brown, Alessio J.G. & Merkl, Christian & Snower, Dennis J., 2011. "Comparing the effectiveness of employment subsidies," Labour Economics, Elsevier, vol. 18(2), pages 168-179, April.
    2. Faia, Ester & Lechthaler, Wolfgang & Merkl, Christian, 2009. "Labor Turnover Costs, Workers' Heterogeneity, and Optimal Monetary Policy," IZA Discussion Papers 4322, Institute of Labor Economics (IZA).
    3. Nina Westerheide & Goran Kauermann, 2014. "Unemployed in Germany: Factors Influencing the Risk of Losing the Job," Research in World Economy, Research in World Economy, Sciedu Press, vol. 5(2), pages 43-55, September.
    4. Thomas Post & Helmut Gründl & Hato Schmeiser, 2006. "Portfolio management and retirement: what is the best arrangement for a family?," Financial Markets and Portfolio Management, Springer;Swiss Society for Financial Market Research, vol. 20(3), pages 265-285, September.
    5. Elke Lüdemann & Ralf Wilke & Xuan Zhang, 2006. "Censored quantile regressions and the length of unemployment periods in West Germany," Empirical Economics, Springer, vol. 31(4), pages 1003-1024, November.
    6. Merkl, Christian & Snower, Dennis J., 2008. "Escaping the unemployment trap: The case of East Germany," Journal of Comparative Economics, Elsevier, vol. 36(4), pages 542-556, December.
    7. Faia, Ester & Lechthaler, Wolfgang & Merkl, Christian, 2010. "Fiscal multipliers and the labour market in the open economy," Kiel Working Papers 1592, Kiel Institute for the World Economy (IfW Kiel).
    8. Lechthaler, Wolfgang & Merkl, Christian & Snower, Dennis J., 2010. "Monetary persistence and the labor market: A new perspective," Journal of Economic Dynamics and Control, Elsevier, vol. 34(5), pages 968-983, May.
    9. Bernd Fitzenberger & Alfred Garloff, 2008. "Unemployment, Labor Market Transitions, And Residual Wage Dispersion," Scottish Journal of Political Economy, Scottish Economic Society, vol. 55(5), pages 561-590, November.
    10. Frosch, Katharina, 2006. "Reemployment rates over the life course: Is there still hope after late career job loss?," Thuenen-Series of Applied Economic Theory 64, University of Rostock, Institute of Economics.
    11. Snower, Dennis J. & Merkl, Christian, 2006. "The caring hand that cripples: The East German labor market after reunification (detailed version)," Kiel Working Papers 1263, Kiel Institute for the World Economy (IfW Kiel).
    12. Johannes F. Schmieder & Till von Wachter & Stefan Bender, 2013. "The Causal Effect of Unemployment Duration on Wages: Evidence from Unemployment Insurance Extensions," NBER Working Papers 19772, National Bureau of Economic Research, Inc.
    13. Ammermueller, Andreas & Kuckulenz, Anja & Zwick, Thomas, 2009. "Aggregate unemployment decreases individual returns to education," Economics of Education Review, Elsevier, vol. 28(2), pages 217-226, April.
    14. Haisken-DeNew, John P. & Vorell, Matthias, 2009. "Killing them with Kindness: Negative Distributional Externalities of Increasing UI Benefits," Ruhr Economic Papers 121, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    15. Lechthaler, Wolfgang & Snower, Dennis J., 2006. "Minimum wages and firm training," Kiel Working Papers 1298, Kiel Institute for the World Economy (IfW Kiel).
    16. Merkl, Christian & Schmitz, Tom, 2011. "Macroeconomic volatilities and the labor market: First results from the euro experiment," European Journal of Political Economy, Elsevier, vol. 27(1), pages 44-60, March.
    17. Dennis J. Snower & Christian Merkl, 2006. "The Caring Hand that Cripples: The East German Labor Market after Reunification," American Economic Review, American Economic Association, vol. 96(2), pages 375-382, May.
    18. Wilke, Ralf A. & Arntz, Melanie, 2008. "How Weather-Proof is the Construction Sector? Empirical Evidence from Germany," ZEW Discussion Papers 08-105, ZEW - Leibniz Centre for European Economic Research.
    19. Johannes F. Schmieder† & Till von Wachter & Stefan Bender, 2011. "The Effects Of Extended Unemployment Insurance Over The Business Cycle: Evidence From Regression Discontinuity Estimates Over Twenty Years," Boston University - Department of Economics - Working Papers Series WP2011-063, Boston University - Department of Economics.
    20. Bruder, Jana & Frosch, Katharina, 2006. "Foreign nationality and age: A double drawback for reemployment in Germany?," Thuenen-Series of Applied Economic Theory 63, University of Rostock, Institute of Economics.
    21. Lechthaler, Wolfgang & Snower, Dennis J., 2008. "Minimum wages and training," Labour Economics, Elsevier, vol. 15(6), pages 1223-1237, December.
    22. repec:bla:germec:v:11:y:2010:i::p:336-366 is not listed on IDEAS
    23. Oskamp, Frank & Snower, Dennis J., 2007. "Interactions between employment and training policies," Kiel Working Papers 1389, Kiel Institute for the World Economy (IfW Kiel).
    24. Haisken-DeNew, John P. & Schmidt, Christoph M., 2009. "Nickel and Dimed German Style: The Working Poor in Germany," Ruhr Economic Papers 122, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.

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    More about this item

    JEL classification:

    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings

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