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This paper compares the sources of wage growth of young male workers in two countries with very different labor market institutions, the United States and Germany. The author first develops a simple method for decomposing wage growth into components due to general human capital accumulation, firm-specific human capital accumulation, and job search. The empirical analysis uses data from administrative records (Germany) and the National Longitudinal Survey of Youth (United States) for cohorts entering the labor market in the late 1970s and early 1980s. Although the two countries differed substantially in mobility rates, they were similar in the sources of wage growth, with general human capital accumulation being the most important single source and job search accounting for an additional 25% or more of total wage growth. There is no evidence that returns to firm-specific human capital accumulation were higher for German apprentices than for U.S. high school dropouts or graduates. [ABSTRACT FROM AUTHOR]

Data from the German Socio-Economic Panel are used to examine the experiences of German workers following job displacement due to plant closure. In the year of displacement, annual earnings declined by about 13.5%, and the typical worker experienced between 6 and 10 additional days of annual unemployment. Two years later, annual earnings were only 6.5% less than before displacement, and the largest estimated increase in annual unemployment was 4 days. These estimated effects lie near the lower end of the range of similar estimates for U.S. workers. [ABSTRACT FROM AUTHOR]

This article compares how the United States and Germany deregulated labor markets between the 1980s and 2010s in response to the rise of neoliberalism. Building on literature with a focus on ideas and national knowledge regimes, the authors argue that the trajectories of labor market deregulation across the two countries are explained by the distinct social organization of ideas. The latter refers to the actors and institutions involved in the production and dissemination of ideas (including think tanks and public research institutes), their access and ways of communicating to political elites and electorates, levels of shared academic standards across the political divide, and related degrees of competition or cooperation in the production of new knowledge and policy ideas. Moving beyond previous employment relations literature with a focus on institutions and power, the article breaks new theoretical ground by demonstrating how the social organization of ideas is a key intermediary in explaining employment relations change and continuity. [ABSTRACT FROM AUTHOR]

The author analyzes the effects of further training subsidies for low-skilled employees on individual labor market outcomes in Germany. Using detailed administrative data, the author exploits cross-regional variation in the policy styles of local employment agencies to identify causal effects of program participation. Findings show that training subsidies significantly increase cumulative employment duration and earnings in the short run and middle run for compliers, that is, those workers who additionally participate due to a more generous policy style in their agency. These gains are particularly pronounced for certain subgroups, such as women. A rough cost-benefit analysis, however, suggests that the program overall is not beneficial for the public budget. [ABSTRACT FROM AUTHOR]

The authors investigate whether a cut in unemployment benefit payout periods enacted in Germany in 2006 affected older workers' labor market transitions. The authors use rich administrative data and exploit a difference-in-differences approach. During 2004–2007, using monthly observations, they compare a reference group of 40–44 year olds with constant benefit payout periods to older treatment groups with reduced payout durations. Compared to the reference group, those groups with reduced payout periods had lower job exit rates, higher rates of finding a job, higher propensity to remain employed, and lower propensity to remain unemployed. These patterns suggest that the reform may have contributed to the recent rise in old-age employment in Germany. [ABSTRACT FROM AUTHOR]

Western countries have experienced a large influx of Muslim immigrants, and concomitantly the Muslim headscarf has become the subject of major controversy. Drawing on theories of stigma, social identity, and multiple discrimination/intersectionality, this study examines the effect of wearing this headscarf in the German labor market. The author applies the method of correspondence testing that allows measuring discrimination in a controlled field setting. Findings show that when applying for a job in Germany, women with a Turkish migration background are less likely to be invited for an interview, and the level of discrimination increases substantially if the applicant wears a headscarf. The results suggest that immigrant women who wear a headscarf suffer discrimination based on multiple stigmas related to ethnicity and religion. [ABSTRACT FROM AUTHOR]

This article confronts monopsony theory’s predictions regarding workers’ wages with observed wage patterns over the business cycle. Using German administrative data for the years 1985 to 2010 and an estimation framework based on duration models, the authors construct a time series of the labor supply elasticity to the firm and estimate its relationship to the unemployment rate. They find that firms possess more monopsony power during economic downturns. Half of this cyclicality stems from workers’ job separations being less wage driven when unemployment rises, and the other half mirrors that firms find it relatively easier to poach workers. Results show that the cyclicality is more pronounced in tight labor markets with low unemployment, and that the findings are robust to controlling for time-invariant unobserved worker or plant heterogeneity. The authors further document that cyclical changes in workers’ entry wages are of similar magnitude as those predicted under pure monopsonistic wage setting. [ABSTRACT FROM AUTHOR]

Drawing on case studies in the German metal and chemical sectors, this article addresses trade unions’ behavior toward employers’ labor market segmentation strategies and, in particular, their use of outsourcing. Findings illustrate that, contrary to the expectations of the dualization literature, trade unions do not always give priority to their core constituency over the interests of temporary or peripheral workers. Union actions are not solely determined by the aim of defending the interests of their current members but depend instead on the interrelationship between unions’ identity and their members’ and organizational interests. [ABSTRACT FROM AUTHOR]

The authors analyze a randomized field experiment in two German labor market agencies that provide public and private provision of intensive job placement services. The findings, based on analysis of administrative agency data over 18 months in 2009–2010, show that assignment to public employment services reduced accumulated days in unemployment by one to two months, compared to an assignment to a private provider. The effects, however, were short-lived. Moreover, two-thirds of the effect is attributable to labor force withdrawals. Finally, several important differences in the modes of service provision are only partially attributable to inherent aspects of in-house production and contracting out. [ABSTRACT FROM AUTHOR]

The author uses German linked employer-employee data to estimate the impact of intra-firm wage dispersion on the probability that establishments pay for further training. About half of all establishments in the estimation sample cover all direct and indirect training costs, which contradicts the standard human capital approach with perfect labor markets. The main finding of cross-section, panel, and instrumental variable probit estimations is that establishments with larger intra-firm wage compression are more likely to cover all direct and indirect training costs, which is consistent with theoretical considerations of the “new training literature” about imperfect labor markets. [ABSTRACT FROM AUTHOR]

A policy change tightened job search requirements regarding geographical mobility for unemployment insurance–benefit recipients in Germany. Those affected by the policy change were individuals without family ties and whose reemployment prospects were low in their home labor market region. The author finds that after one year the policy change led to a 4.6 percentage point increase in employment among women without children who lived in regions with relatively high unemployment. Women responded to the policy change by taking up jobs in their home labor market region as well as outside of that region. The author does not find any effects of the tightened mobility requirements for men. [ABSTRACT FROM AUTHOR]

The authors investigate immigrants’ and natives’ labor supply to the firm within an estimation approach based on a dynamic monopsony framework. Applying duration models that account for unobserved worker heterogeneity to a large administrative employer–employee data set for Germany, they find that immigrants supply labor less elastically to firms than do natives. Under monopsonistic wage setting, the estimated elasticity differential predicts a 7.7 log points wage penalty for immigrants thereby accounting for the entire unexplained native–immigrant wage differential of 5.8 to 8.2 log points. When further distinguishing immigrant groups differing in their time spent in the German labor market, their immigration cohort, and their age at entry, the authors find that the observed unexplained wage differential is larger for those groups that show a larger elasticity differential relative to natives. These findings not only suggest that search frictions are a likely cause of employers’ more pronounced monopsony power over their immigrant workers but also imply that employers profit from discriminating against immigrants. [ABSTRACT FROM PUBLISHER]

In this article, the author proposes a new method for measuring wage discrimination that builds on the methodology first developed by Hellerstein and Neumark (1999). The author's method has three main advantages: It is robust to labor market segregation, it does not impose linearity on the wage-setting equation, and it is not only a test for discrimination but also produces a measure of discrimination. Using matched employer-employee data from Germany, the author finds that immigrants are being discriminated against. They receive wages that are 13% lower than native workers in the same firm. [ABSTRACT FROM AUTHOR]

The authors present a detailed case study of the evolution of apprenticeships in German banking over the past two decades to analyze why employers continue to be willing to invest in these programs that provide workers with transferable skills. They explain employers' motivation in terms of two 'logics.' Some considerations stemming from the logic of consequences, such as recruitment cost savings and enhanced workplace flexibility, encourage retention of the apprenticeship system. On balance, however, the cost calculus that is at the heart of the logic of consequences would, if unopposed, encourage head-hunting for apprentices trained by other firms, eventually undermining the system. The countervailing logic of appropriateness, however, discourages defections from the system by fostering trust among employers, encouraging new firms to participate in the system, supporting the strong reputational effect associated with training, and creating mechanisms with which banks can have a hand in keeping the system efficient. [ABSTRACT FROM AUTHOR]

Using data from the German Socio-Economic Panel for 1984-90, the author analyzes the entrance of young individuals into the German labor market, comparing the experience of apprenticeship graduates to that of graduates from universities, full-time vocational schools, and secondary schools. Apprentices experienced fewer unemployment spells in the transition to their first full-time employment than did non- apprentices. Among apprentices, those trained in large firms had the smoothest transition to employment; once employed, however, apprentices (whether they stayed in their training firm or not) and non- apprentices had similar job stability (as measured by tenure). An estimated 70% of apprenticeship trainees left their training firm within a five-year period. These findings are consistent with the view that apprenticeship training develops general, portable skills rather than firm-specific skills. [ABSTRACT FROM AUTHOR]