"Blanchflower and Oswald [Blanchflower, David G. and Oswald, Andrew J., 1994a, The Wage Curve, (Cambridge, MA, MIT Press), Blanchflower, David G. and Oswald, Andrew J., 1994b, Estimating a Wage Curve for Britain 1973–90, The Economic Journal 104, 1025–1043. Eine praktische Einführung, Nürnberg] reported that they have found an ‘empirical law of economics’ — the Wage Curve. Our paper reconsiders the western German Wage Curve using disaggregated regional data and is based on almost one million employees drawn from the Federal Employment Services of Germany over the period 1980–2004. We find that the wage equation is highly autoregressive but far from unit root. The unemployment elasticity is significant but relatively small: only between − 0.02 and − 0.04. We also check the sensitivity of this elasticity for different population groups (young versus old, men versus women, less educated versus highly educated, German native versus foreigner), confirming that it is stronger the weaker the bargaining power of the particular group."
"We analyse whether wage differences between cities and rural areas in western Germany are due to unobserved differences in regional price levels. Since regional prices are available for only 10% of the regions we use multiple imputation to generate prices for all regions. Our results show that the nominal agglomeration wage differential is 25%, whereas the real differential is 19%. If we control for the composition of the labour force and jobs, the real wage differential is 4%. If we additionally control for differences in regional building land prices the agglomeration wage differential vanishes."
"In many countries regional disparities are fairly large and persistent. Often classification systems are needed to provide succinct information on these disparities. This paper presents a model-based classification system which is designed to assess labour market conditions which influence the outcomes of active labour market policy. The innovation in this paper is the development of a procedure that combines a theory-guided analysis of determinants of regional disparities with standard classification approaches. The procedure is designed to resolve two limitations inherent in many existing classification schemes: first, their purely descriptive nature and second, the lack of a theoretically meaningful organization of the variable selection process." (Author's abstract, IAB-Doku)
"A problem encountered in many contexts is the estimation of matrices or tables from aggregate, heterogeneous, incomplete and contradictory information. In this paper the Adeton method is presented which can be used for this estimation task under quite general conditions. The Adeton method was originally developed to estimate flow matrices of regional labour markets in the Multi-Accounting System (MAS). However, it is applicable for many purposes, e.g. to estimate contingency tables or input-output and other flow matrices. Adeton is based on a Bayesian inference model: Given a prior probability distribution on the set of possible matrices and information about the actual matrix consisting of a set of linear equality and inequality constraints, the complete matrix with highest posterior probability is calculated. The advantage of the Adeton approach is that it is possible to specify soft constraints which are obeyed only up to a certain degree. It is shown that Adeton is an estimation method of entropy optimization type and in this respect is a generalization of the well known Iterative Proportional Fitting Algorithm (used in log-linear models) or of the equivalent RAS method (used in input-output analysis)."
"The wage curve postulates that the wage level is a decreasing function of the regional unemployment rate. In testing this hypothesis, most studies have not taken into account that differences in the institutional framework may have an impact on the existence (or the slope) of a wage curve. Using a large-scale linked employer–employee dataset for Western Germany, this article provides a first direct test of the relevance of different bargaining regimes (and of works councils) for the existence of a wage curve. In pooled regressions for the period 1998 to 2006, as well as in worker-level or plant-level fixed-effects estimations, we obtain evidence for a wage curve for plants with a collective bargaining agreement at firm level. The point estimates for this group of plants are close to the −0.1 elasticity of wages with respect to unemployment postulated by Blanchflower and Oswald. In this regime, we also find that works councils dampen the adjustment of wages to the regional unemployment situation. In the other regimes of plants that either do not make use of collective contracts or apply sectoral agreements, we do not find a wage curve."
"Recent years have seen a tendency towards larger migration flows between many countries. Due to this development the population in the most developed countries in particular is growing increasingly diverse. People with very different cultural backgrounds are living and working together. The social, political and economic implications of this situation are far-reaching, complicated and not completely understood. This paper addresses an important aspect of these implications by looking at the effects of cultural diversity on the labour market. In principle, negative effects can arise from communication problems between people of different cultural backgrounds, from hidden discrimination and even from open clashes. On the other hand, positive effects are possible, since workers from different cultures and nations may possess complementary skills and problem-solving abilities. The intensive interaction of people from different backgrounds can generate ideas and solutions that would not have been developed in culturally homogeneous environments."