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Sectoral Transformation, Turbulence and Labor Market Dynamics in Germany

Author

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  • Bachmann Ronald

    (RWI Essen,Essen, Germany)

  • Burda Michael C.

    (Humboldt-Universität,Berlin, Germany)

Abstract

This paper analyzes the interaction between structural change and labor market dynamics in West Germany, during a period when industrial employment declined by more than 30% and service sector employment more than doubled. Using transition data on individual workers, we document a marked increase in structural change and turbulence, in particular since 1990. Net employment changes resulted partly from an increase in gross flows, but also from an increase in the net transition ‘yield’ at any given gross worker turnover. In growing sectors, net structural change was driven by accessions from nonparticipation rather than unemployment; contracting sectors reduced their net employment primarily via lower accessions from non-participation. German reunification and Eastern enlargement appear to have contributed significantly to this accelerated pace of structural change.

Suggested Citation

  • Bachmann Ronald & Burda Michael C., 2010. "Sectoral Transformation, Turbulence and Labor Market Dynamics in Germany," German Economic Review, De Gruyter, vol. 11(1), pages 37-59, February.
    • Handle: RePEc:bpj:germec:v:11:y:2010:i:1:p:37-59
    DOI: 10.1111/j.1468-0475.2009.00465.x
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    More about this item

    Keywords

    Gross worker flows; sectoral and occupationalmobility; turbulence;
    All these keywords.

    JEL classification:

    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion

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