Structural change of the production process and unemployment duration in Germany

Axel Schimmelpfennig

No 959, Kiel Working Papers from Kiel Institute for the World Economy

Abstract: Based on a Cox Proportional Hazard analysis of German unemployment spells, structural change of the production process is identified as a major explanation for long-term unemployment. Other important covariates capture labor market institutions, macroeconomic stress factors, and individual characteristics. Structural change of the production process has resulted in a shift in labor demand across occupations and skills. For individuals laid off from declining parts of the economy, this implies a devaluation of their human capital. They need to acquire new skills for positions in expanding parts of the economy, or spend a longer time in unemployment searching for the few remaining jobs for which they possess adequate skills.

Keywords: Unemployment duration; Cox Proportional Hazard model; structural change (search for similar items in EconPapers)
JEL-codes: C41 J62 J64 (search for similar items in EconPapers)
Date: 1999
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:ifwkwp:959

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