Worker Reallocation across Occupations in Western Germany

Aysen Isaoglu

No 319, SOEPpapers on Multidisciplinary Panel Data Research from DIW Berlin, The German Socio-Economic Panel (SOEP)

Abstract: This paper analyzes the determinants of annual worker reallocation across disaggregated occupations in western Germany for the period 1985-2003. Employing data from the German Socio-Economic Panel, the pattern of average occupational mobility is documented. Worker reallocation is found to be strongly procyclical. Its determinants at the individual level are then investigated while controlling for unobserved worker heterogeneity. A dynamic probit fixed effects model is estimated to obtain coefficients and marginal effects. The incidental parameter bias is reduced by the method proposed in Hahn and Kuersteiner (2004). An interesting finding is that workers changing occupation are about 8 to 9 percent less inclined to experience occupational mobility in the subsequent year than workers who do not change. Except for workers with only compulsory education, the impact of age on the probability of occupational change is declining in the level of education. The unemployment rate has a negative effect on the probability of occupational changes, especially for female foreigners.

Keywords: Dynamic binary choice models; fixed effects; incidental parameter bias; occupational mobility; Panel data (search for similar items in EconPapers)
JEL-codes: C23 C25 C81 J24 J44 J62 (search for similar items in EconPapers)
Pages: 39 p.
Date: 2010
New Economics Papers: this item is included in nep-eur and nep-lab
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Persistent link: https://EconPapers.repec.org/RePEc:diw:diwsop:diw_sp319

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