Reversed Roles? Wage and Employment Effects of the Current Crisis

Lutz Bellmann and Hans-Dieter Gerner

A chapter in Who Loses in the Downturn? Economic Crisis, Employment and Income Distribution, 2011, pp 181-206 from Emerald Group Publishing Limited

Abstract: In Germany, the economic crisis 2008/09 was restricted to export-oriented industries such as automotive, chemistry, and mechanical engineering and hence to industries with a high proportion of qualified employees. Therefore, we expect the most current crisis to have a reversed effect on the relative earnings position between more and less qualified in contrast to a development that favored the more qualified since the beginning of the 1980s. Our empirical study is based on the Institute for Employment Research (IAB) Establishment Panel, a representative German establishment level panel data set that surveys information from almost 16,000 personal interviews with high ranked managers. Despite the “German Job Miracle,” conditional difference-in-differences estimations to control for observed and unobserved heterogeneity reveal substantial employment reductions in establishments affected by the economic crisis. Falls in employment are strongest in plants with a relatively low proportion of qualified workers. Furthermore, our results indicate that the economic crisis is associated with a decline in wages, but only in those establishments that do not operate working time accounts. In sum, we do not find evidence for the current crisis having a reversed effect on the relative earnings position. Obviously once again, the higher qualified are better off than the lower qualified.

Keywords: Wage structure; turnover; layoffs; public policy (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (49)

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Persistent link: https://EconPapers.repec.org/RePEc:eme:rleczz:s0147-9121(2011)0000032009

DOI: 10.1108/S0147-9121(2011)0000032009

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