Browsing by Subject "Unemployment"

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Essays in health economics
(2018) Kaiser, Micha; Sousa-Poza, Alfonso
In economic theory a lot of attention is given to the understanding and modelling of consumption decisions of individuals. Usually, most models assume that individuals consume different markets goods and maximize their utility with respect to certain constraints. These constraints can be of various kinds. Besides monetary constraints health related constraints are vitally important during the maximization process of individuals. In such a paradigm, individuals would therefore benefit indirectly from being in a good health state, since this would imply that they are less constrained and could therefore shift their individual utility to a higher level. Moreover, health can also be treated as a good itself. Such an approach would assign a direct effect of different health states to an individuals utility rather than incorporating health states by including them as a source for binding constraints. Apart from the different strategies in modelling the consumption decisions, both ways of thinking have in common that the achievement as well as the maintenance of a good health state is – to some extent - a necessary condition to foster the utility maximization process. Additionally, health outcomes of individuals are highly sensitive to economic circumstances and different policy interventions. For instance, a change in the individuals income will lead to an adjustment of the optimal consumption decision and therefore also to an adjustment of the health outcome (either in a direct or indirect way). Therefore a profound understanding of the impact of changes in economic and political processes helps to assess their effects on the health outcomes of individuals. Hence, this thesis investigates the impact of different economic factors and policy interventions on health. In particular, the thesis contributes to the literature in the following way: Chapter two uses 22 years of data from the German Socio-Economic Panel and information on plant closures to investigate the effects of unemployment on four indicators of unhealthy lifestyles: diet, alcohol consumption, smoking, and (a lack of) physical activity. The main goal is to assess possible causal effects of unemployment on risky behaviors. In fact, in contrast to much of the existing literature the empirical identification strategy used in this analysis, is able to clearly identify exogenous effect and therefore avoids endogeneity, which may result from reversed causality. The main results provide little evidence that unemployment gives rise to unhealthy lifestyles. Chapter three evaluates the relation between preschool care and the well-being of children and adolescents in Germany by using data from the German Health Interview and Examination Survey of Children and Adolescents. Analyzing this relationship is important to provide conclusive knowledge for parents as well as policy-makers due to several reasons. While parents are interested in providing the best health outcomes for their children, policy-makers need to balance a possible trade-off between economic as well as social costs and benefits related to preschool care. Additionally, the chapter examines differences in outcomes based on child socioeconomic background by focusing on the heterogeneous effects for migrant children. The findings suggest that children who have experienced child care have a slightly lower well-being overall. For migrant children, however, the outcomes indicate a positive relation. The fourth chapter analyzes how a nationwide population-based skin cancer screening program (SCS) implemented in Germany in 2008 has impacted the number of hospital discharges following malignant skin neoplasm diagnosis and the malignant melanoma mortality rate per 100,000 inhabitants. Therefore, panel data from the Eurostat database, which covers subregions in 22 European countries is analyzed for the years 2000-2013. By using fixed-effects methods, the causal relationship between the skin cancer screening program and the change in diagnosis and mortality rates are identified and a policy implication is derived. While the results indicate that Germany’s nationwide SCS program is effective in terms of a higher diagnosis rate for malignant skin neoplasms and thus may contribute to an improvement in the early detection of skin cancer, there is no significant influence on the melanoma mortality rate. Chapter five analyzes how closely different income measures conform to Benford’s law, a mathematical predictor of probable first digit distribution across many sets of numbers. Because Benford’s law can be used to test data set reliability, a Benford analysis is applied to assess the quality of six widely used health related survey data sets. This is of particularly importance for health economists, since the majority of empirical work in this field relies on information from survey data. The findings indicate that although income generally obeys Benford’s law, almost all the data sets show substantial discrepancies from it, which can be interpreted as a strong indicator of reliability issues in the survey data. This result is confirmed by a simulation, which demonstrates that household level income data do not manifest the same poor performance as individual level data. This finding implies that researchers should focus on household level characteristics whenever possible to reduce observation errors.
Fairness considerations in labor union wage setting : a theoretical analysis
(2012) Strifler, Matthias; Beißinger, Thomas
We consider a theoretical model in which unions not only take the outside option into account, but also base their wage-setting decisions on an internal reference, called the fairness reference. Wage and employment outcomes and the shape of the aggregate wagesetting curve depend on the weight and the size of the fairness reference relative to the outside option. If the fairness reference is relatively high compared to the outside option, higher wages and lower employment than in the standard model will prevail. If hit by an adverse technology shock, the economy will then react with a stronger downward adjustment in employment, whereas real wages are more rigid than in the standard model. With a low fairness reference the opposite results are obtained. An increase in the fairness weight amplifies the deviations of wages and employment from those of the standard model. It also leads to an increase in the degree of real wage rigidity if the fairness reference is high and an increase in the degree of real wage flexibility if the fairness reference is low. Thus, higher wages go hand in hand with more pronounced wage stickiness.
Matching und Zeitarbeit : Theoretische Analysen zu den Auswirkungen der Leiharbeit auf den Arbeitsmarkt
(2012) Pfleger, Stefan; Beißinger, Thomas
Since 1990 temporary agency work has increased rapidly in most western countries. Despite that fact, the academic research about this trend is still at the beginning. This dissertation contributes to the theoretical field of research by investigating the effects of the existence of temporary work agencies on the labor market. Using different kinds of matching-models, the analysis focuses on the identification of the growth-determinants of temporary agency work and the various kinds of effects that temporary agency work can have on the performance of the labor market. Chapter 2 gives an overview about the phenomenon ?temporary agency work?, its legal framework in Germany and the motives of firms and individuals, which use the services of temporary work agencies. In addition, some data of the structure and development of temporary agency work in Germany is presented. An introduction into (standard) matching-models of the labor market is given in chapters 3 to 5. Afterwards, the traditional matching-framework is used to analyze the intermediation-function of temporary work agencies. In Chapter 6 to 8 a modification of the traditional matching-framework is made by explicitly incorporating temporary agency work as an additional labor market segment. By doing so, it is possible to analyze the interaction with other kinds of labor market institutions, such as employment protection. The model presented in Chapter 6 investigates whether the deregulation of temporary agency work has contributed to its rapid growth. Furthermore it is discussed under which circumstances the expansion of the temporary work sector leads to the growding-out of regular jobs. Afterwards, an empirical analysis examines the effects of the deregulation process on the growth of temporary agency work in Germany. Chapter 7 shows that there are also factors outside the temporary work sector that can explain its growing importance. The model developed in this chapter is used to analyze the effects of firing-costs on the temporary work sector. Furthermore it is asked which effects the existence of the temporary work sector has on labor market performance when the regular sector becomes more rigid. The model developed in chapter 8 analyzes the wage-effects of temporary work. Initially, the analysis focuses on the effects of a change of the wage-differential between regular and temporary agency work. Finaly it is shown what effects the growth of the agency work sector can have on the wages of temporary and regular workers.
Offshoring and labour market reforms : modelling the German experience
(2015) Hellier, Joël; Beißinger, Thomas; Chusseau, Nathalie
A usual interpretation of the high performance of the German economy since 2005 is that the Hartz labour market reforms have boosted German competitiveness, resulting in higher exports, higher production and lower unemployment. This explanation is at odds with the sequence of observed facts. We propose and model an alternative scenario in which offshoring explains the gains in competitiveness but increases unemployment and inequality, and the subsequent labour market reforms lower unemployment by lessening the reservation wage and expanding the non-tradable sector. The model replicates the developments of the German economy since 1995: 1) Germany offshores more intensively than other advanced countries; 2) The increase in competitiveness and in the exports/production ratio occurs before the implementation of the labour market reform, and this comes with both higher inequality and higher unemployment; 3) The implementation of the reform reduces unemployment, but also decreases the exports/production ratio and increases inequality. The model also predicts that the reduction in unemployment in Germany would have occurred without the Hartz reforms, but later and less intensively. We finally discuss the possible extension of this ‘strategy’ to other Eurozone countries, and alternative policies that activate similar mechanisms without increasing inequality.
Perspectives of workers with low qualifications in Germany under the pressures of globalization and technical progress
(2007) Rukwid, Ralf; Hagemann, Harald
This paper gives a detailed analysis of the perspectives of workers with low qualifications in Germany under the twofold pressures of globalization and technological change. First, alternative explanations for the skill-bias in the development of labour demand are discussed, with particular emphasis on the ?trade versus technology? debate. The consequences of the demand shift away from low-skilled labour in Germany are examined in a detailed empirical analysis of the development of (un)employment problems differentiated for qualification groups. Compared to other advanced economies, Germany shows a higher unemployment rate among less-qualified workers which is generally associated with a lack of flexibility in the German wage structure. However, an analysis of German, U.S. and British wage data based on the Cross National Equivalent File (CNEF) does not confirm the assumption of a simple monocausal relationship between wage disparity and the intensity of group-specific unemployment. Finally, some political approaches for an improvement of the job prospects of less-qualified persons in Germany are outlined briefly and evaluated against the background of the empirical results.
Technological unemployment revisited : automation in a searchand matching framework
(2018) Prettner, Klaus; Cords, Dario
Will low-skilled workers be replaced by automation? To answer this question, we set up a search and matching model that features two skill types of workers and includes automation capital as an additional production factor. Automation capital is a perfect substitute for low-skilled workers and an imperfect substitute for high-skilled workers. Using this type of model, we show that the accumulation of automation capital decreases the labor market tightness in the low-skilled labor market and increases the labor market tightness in the high-skilled labor market. This leads to a rising unemployment rate of low-skilled workers and a falling un- employment rate of high-skilled workers. In addition, automation leads to falling wages of low-skilled workers and rising wages of high-skilled workers.
Trade and unemployment : what do the data say?
(2009) Felbermayr, Gabriel; Prat, Julien; Schmerer, Hans-Jörg
This paper documents a robust empirical regularity: in the long-run, higher trade openness is causally associated to a lower structural rate of unemployment. We establish this fact using: (i) panel data from 20 OECD countries, (ii) cross-sectional data on a larger set of countries. The time structure of the panel data allows to deal with endogeneity concerns, whereas cross-sectional data make it possible to instrument openness by its geographical component. In both setups, we carefully purge the data from business cycle effects, include a host of institutional and geographical variables, and control for within-country trade. Our main finding is robust to various definitions of unemployment rates and openness measures. The preferred specification suggests that a 10 percent increase in total trade openness reduces unemployment by about one percentage point. Moreover, we show that openness affects unemployment mainly through its effect on TFP and that labor market institutions do not appear to condition the effect of openness.
Unemployment in an interdependent world
(2009) Felbermayr, Gabriel; Larch, Mario; Lechthaler, Wolfgang
We introduce search and matching unemployment into a model of trade with differentiated goods and heterogeneous firms. Countries may differ with respect to size, geographical location, and labor market institutions. Contrary to the literature, our single-sector perspective pays special attention to the role of income effects and shows that bad institutions in one country worsen labor market outcomes not only in that country but also in its trading partners. This spill-over effect is conditioned by trade costs and country size: smaller and/or more centrally located nations suffer less from inefficient policies at home and are more heavily affected from spill-overs abroad than larger and/or peripheral ones. We offer empirical evidence for a panel of 20 rich OECD countries. Carefully controlling for institutional features and for business cycle comovements between countries, we confirm our qualitative theoretical predictions. However, the magnitude of spill-over effects is larger in the data than in the theoretical model. We show that introducing real wage rigidity can remedy this problem.