The Changing Situation of Labor Market Entrants in Germany: A Long-Run Analysis of Wages and Occupational Patterns

Mario Reinhold () and Stephan Thomsen
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Mario Reinhold: NIW Hannover, Leibniz Universität Hannover
Authors registered in the RePEc Author Service: Mario Reinhold

No 10334, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Concurrently with a steady increase of the supply of college educated workers, recent evidence for the U.S. indicated a decline in the demand for and the real wages of this group after 2000. We investigate empirically, whether there has been a similar trend in Germany. Based on comprehensive, long-run administrative data for the years 1975 to 2010, we use a set of employment indicators to analyze labor market patterns of job market entrants. Besides consideration of the developments of education attainment and wages over time, we put a particular focus on changes of the task composition, the chances of entering top-paying jobs, entry wages and wage growth, and skill premia over time. To allow for a detailed analysis, we distinguish four education groups. The empirical picture shows that since the year 2000 job entrants with higher education have experienced decreasing employment shares in top-paying positions. Moreover, starting wages and wage growth have both decreased, too. A reason for this has been the substitution of jobs that were formerly executed by lower qualifications. Our findings reveal similarities between Germany and the U.S. in terms of some declining fortunes of the young. However, whereas in the U.S. college educated workers have been affected, the results indicate that in Germany the medium-skilled and low-skilled have been particularly impaired.

Keywords: occupational sorting; labor supply; labor demand; wages; education groups (search for similar items in EconPapers)
JEL-codes: J21 J23 J24 (search for similar items in EconPapers)
Pages: 24 pages
Date: 2016-10
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Citations: View citations in EconPapers (3)

Published - published in: Journal for Labour Market Research , 2017, 50 (1), 161–174

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Journal Article: The changing situation of labor market entrants in Germany: a long-run analysis of wages and occupational patterns (2017)
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