A New Measure of Wage Risk: Occupation-Specific Evidence for Germany

Helmut Herwartz (), David Rodriguez-Justicia and Bernd Theilen ()
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Helmut Herwartz: Georg-August-University
Bernd Theilen: Universitat Rovira i Virgili

Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, 2022, vol. 164, issue 3, No 17, 1427-1462

Abstract: Abstract This study proposes a new measure of wage risk based on estimated probabilities to earn an hourly wage that is below some specific lower quantile of the wage distribution. Using the German SOEP as an information rich data base, we determine wage risks overall and for nine job categories during the period from 1992 until 2015. We find that the low-wage workers in Germany are worse off after the Hartz reforms. In Western Germany this evidence stems from both a reduction of low wages and an increase of wage risk. In Eastern Germany, it is largely due to increased wage risk. Moreover, overall evidence hides important developments at the occupational level.

Keywords: Wage risk; German labor market; Job-specific wage risk; German SOEP; Probit models (search for similar items in EconPapers)
JEL-codes: C25 D31 J31 (search for similar items in EconPapers)
Date: 2022
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DOI: 10.1007/s11205-022-02995-6

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