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Comparison of German data on second-generation immigrants' educational attainment and those of similarly aged natives showed that foreign-born parents' schooling played no role in children's educational choices. For Germans, educational achievement of parents, especially fathers, influences children's schooling. (SK)

We analyse the reservation wages of first- and second-generation migrants, based on rich survey data of the unemployed in Germany. Our results confirm the hypothesis that reservation wages increase over migrant generations and over time, suggesting that the mobility benefit of immigration may be limited in time. [ABSTRACT FROM AUTHOR]

This paper examines whether the subjective well-being of migrants is responsive to fluctuations in macroeconomic conditions in their country of origin. Using the German Socio-Economic Panel for the years 1984 to 2009 and macroeconomic variables for 24 countries of origin, we exploit countryyear variation for identification of the effect and panel data to control for migrants' observed and unobserved characteristics. We find strong evidence that migrants' well-being responds negatively to an increase in the GDPof their home country. That is, migrants seem to regard home countries as natural comparators, which grounds the idea of relative deprivation underlying the decision to migrate. The effect declines with years-since-migration and with the degree of assimilation in Germany. [ABSTRACT FROM AUTHOR]

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Germany's recovery from an unemployment disease and its resilience to the Great Recession is remarkable. Its success story makes it a showcase for labor policy and labor market reforms. This paper assesses the potential of the German experience as a model for effective, evidence-based policymaking. Flexible management of working time (through overtime and short-time work, time accounts, and labor hoarding), social cohesion and controlled unit labor costs, combined with a rigid, incentive-oriented labor policy supported by effective program evaluation, define the characteristics of a strong reference model. Austerity, sometimes seen as core to the German model, is not viewed as a key element. [ABSTRACT FROM AUTHOR]

. At the height of the economic crisis in mid-2009, the number of Germany's short-time workers peaked at 1.5 million. Unemployment would otherwise have increased by approximately twice as much as it did. But while short-time work certainly helped to cushion the labour market impact of the crisis, the authors caution that the country's specific circumstances preclude simple generalizations regarding its global effectiveness. Moreover, they argue, subsequent amendments to the regulatory framework made the scheme vulnerable to abuse, as reflected in the significant numbers of short-term workers in industries unaffected by the crisis and the emergence of a pattern of 'long-term' short-time work. [ABSTRACT FROM AUTHOR]

Résumé. Dans le courant de l'année 2009, au plus fort de la crise économique, on dénombrait 1,5 million de salariés au chômage partiel en Allemagne. Sans le recours à ce dispositif, le taux de chômage aurait doublé. Le chômage partiel a sans aucun doute contribuéà atténuer l'impact de la crise sur le marché du travail allemand, mais les auteurs tiennent à rappeler qu'il a été utilisé dans des circonstances particulières, propres à l'Allemagne, et qu'il n'est dès lors pas possible de procéder à des généralisations quant à son efficacité. Par ailleurs, ils soulignent que les récentes modifications du régime du chômage partiel ont ouvert la voie à certains abus, comme en témoigne le nombre important de bénéficiaires du dispositif dans des secteurs d'activité qui n'ont pas été touchés par la crise et la constitution d'un chômage partiel de longue durée. [ABSTRACT FROM AUTHOR]

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This article studies repeat or circular migration between the host and home countries using panel data for Germany, distinguishing between factors generating single moves, circular migration, and absorption. Migrants are more likely to leave early after their first arrival in Germany, and when they have social and familial bonds in the home country, but less likely when they have a job in Germany and speak the language well. Once out-migrated, the return probability is mainly affected by remittances and family considerations. Circular migration is fostered by vocational training in the host country and older age. Whereas male migrants are 9 percent more likely to return to their home country than female migrants, gender is not significant for predicting the return to move back to Germany. [ABSTRACT FROM AUTHOR]

This article studies repeat or circular migration between the host and home countries using panel data for Germany, distinguishing between factors generating single moves, circular migration, and absorption. Migrants are more likely to leave early after their first arrival in Germany, and when they have social and familial bonds in the home country, but less likely when they have a job in Germany and speak the language well. Once out-migrated, the return probability is mainly affected by remittances and family considerations. Circular migration is fostered by vocational training in the host country and older age. Whereas male migrants are 9 percent more likely to return to their home country than female migrants, gender is not significant for predicting the return to move back to Germany. [ABSTRACT FROM AUTHOR]

Purpose -- Labor market programs may affect unemployed individuals' behavior before they enroll. The aim of this paper is to study whether such ex ante effects differ according to ethnic origin. Design/methodology/approach -- The authors apply a method that relates self-reported perceived treatment rates and job search behavioral outcomes, such as the reservation wage or search intensity, to each other. German native workers are compared with migrants with a Turkish origin or Central and Eastern European (including Russian) background. Job search theory is used to derive theoretical predictions. The ex ante effect of the German active labor market program (ALMP) system is examined using the novel IZA Evaluation Data Set which includes self-reported assessments of the variables of interest as well as an unusually detailed amount of information on behavior, attitudes and past outcomes. Findings -- It is found that the ex ante threat effect on the reservation wage and search effort varies considerably among the groups considered. Originality/value -- The study is the first to investigate whether migrants and natives react similarly to the expectation of participating in an ALMP, and whether migrants of different regions of origin react similarly or not. [ABSTRACT FROM AUTHOR]

Purpose -- The aim of this paper is to study the economic effects of risk attitudes, time preferences, trust and reciprocity and to compare natives and second generation migrants. Design/methodology/approach -- This paper is based on the IZA Evaluation Dataset, a recently collected survey of a representative inflow sample into unemployment in Germany. The data include a large number of migrant-specific variables as well as information about economic preferences and attitudes. This allows an assessment of whether and how unemployed second generation migrants differ from unemployed natives in terms of economic preferences and attitudes. Findings -- Differences are found between the two groups mainly in terms of risk attitudes and positive reciprocity. Second generation migrants have a significantly higher willingness to take risks and they are less likely to have a low amount of positive reciprocity when compared to natives. It was also found that these differences matter in terms of economic outcomes, and more specifically in terms of the employment probability about two months after unemployment entry. Research limitations/implications +-- The findings offer interesting perspectives, e.g. with regard to the design and targeting of active labor market policy. It may be reasonable to specifically focus on less risk averse individuals with measures such as job search requirements and monitoring. Originality/value -- This paper provides novel and direct evidence on the relationship between economic preferences, attitudes and labor market reintegration of natives and second generation migrants. [ABSTRACT FROM AUTHOR]

Purpose -- This paper seeks to shed further light on the native-migrant differences in economic outcomes. The aim is to investigate labor market reintegration, patterns of job search, and reservation wages across unemployed migrants and natives in Germany. Design/methodology/approach -- The paper is based on the IZA Evaluation Dataset, a recently collected rich survey of a representative sample of entrants into unemployment in Germany. The data include a large number of migration variables, allowing us to adapt a recently developed concept of ethnic identity: the ethnosizer. The authors analyze these data using the OLS technique as well as probabilistic regression models. Findings -- The results indicate that separated migrants have a relatively slow reintegration into the labor market. It can be argued that this group exerts a relatively low search effort and that it has reservation wages which are moderate, yet still above the level which would imply similar employment probabilities as other groups of migrants. Research limitations/implications -- The findings indicate that special attention heeds to be paid by policy makers to various forms of social and cultural integration, as it has significant repercussions on matching in the labor market. Originality/value -- The paper identifies a previously unmapped relationship between ethnic identity and labor market outcomes. [ABSTRACT FROM AUTHOR]

Purpose -- This paper aims to present the IZA Evaluation Dataset, a newly created data source allowing for the evaluation of active labor market policies in Germany. Design/methodology/approach -- The paper's approach is a description of the sampling and contents of the IZA Evaluation Dataset and an outline of its research potential. Findings -- The evaluation of active labor market policies is often confronted with a lack of adequate empirical data. The IZA Evaluation Dataset may serve as a role model for the provision of such data. Research limitations/implications -- The scope of active labor market policy instruments that can be analyzed with the IZA Evaluation Dataset is mainly restricted to measures for unemployed individuals. Originality/value -- In recent years, many countries have opened their administrative databases for evaluation studies. However, information that might be relevant for economic modeling is often absent. The IZA Evaluation Dataset aims to overcome such limitations for Germany by complementing administrative data from the Federal Employment Agency with innovative survey data. [ABSTRACT FROM AUTHOR]

The article discusses research on the history of labor relations in Germany from the nineteenth to the early twenty-first century. Key elements investigated in this project include: strict employment protection policies, high wage-associated costs of social security, restricted income flexibility owing to labor contracts, and state measures such as early retirement that restrict the labor force vacancies. The resultant skewing of "normal" labor relations and employment contracts in Germany over time is analyzed.

Immigrants are much less likely to own their homes than natives, even after controlling for a broad range of life-cycle and socioeconomic characteristics and housing market conditions. This paper extends the analysis of immigrant housing tenure choice by explicitly accounting for ethnic identity as a potential influence on the homeowner-ship decision, using a two-dimensional composite index of ethnic identity that incorporates attachments to both origin and host cultures. In the case of Germany, the evidence suggests that immigrants with a stronger commitment to the host country are more likely to achieve homeownership for a given set of socioeconomic and demographic characteristics, regardless of their level of attachment to their home country. [ABSTRACT FROM AUTHOR]

Purpose -- The purpose of this paper is to study the determinants of naturalization of non-EU immigrant household heads with a fresh look at the role of integration and ethnicity. Design/methodology/approach -- Employing data on immigrant household heads from the German Socioeconomic Panel differentiation is made among those who already have been naturalized, those who plan to take citizenship, and those who do not have citizenship and do not want it, using multinomial probit models. The subject scope includes literature on naturalization, ethnicity, and integration. Findings -- A robust finding is that German citizenship is very valuable to female immigrant household heads and the generally better educated, but not to those educated in Germany. The degree of integration into German society has a differential effect on citizenship acquisition. While a longer residence in Germany has a negative influence on actual or future naturalization, arriving at a younger age and having close German friends are strong indicators of a positive proclivity to citizenship acquisition. Likewise, ethnic origins and religion also influence these decisions. Muslim immigrants in Germany are more willing to become German citizens than non-Muslim immigrants, but there are also fewer German citizens among Muslims than among non-Muslims. Research limitations/implications -- Future research should also investigate the second-generation naturalization proclivities and those of illegals. Practical implications -- Allowing for dual citizenship helps generate more naturalizations among Muslims. Originality/value -- The paper provides a test of the relative importance of the integration approach in comparison with the ethnicity model; demonstrating that integration in German society has a stronger effect on naturalization than ethnic origin and religion. [ABSTRACT FROM AUTHOR]

This paper focuses on the entrepreneurial endeavours of immigrants' and natives in Germany, concentrating on Turks, Germany's largest immigrant group and one under-studied in the literature. Self-employed Turks in Germany represent about 70 per cent of all Turkish entrepreneurs in the European Union. We use data from the German Socio-economic Panel to study patterns of self-employment. First, we identify the characteristics of the self-employed individuals and understand their underlying drive into self-employment. Next we investigate how immigrant entrepreneurs fare in the labour market and compare their earnings to those of the natives. It is important for decision makers to understand entrepreneurial patterns so that they can shape policy that better fosters entrepreneurial activities. This paper presents several findings that can inform better policymaking. First, our investigation indicates that education is not decisive in determining whether one will choose self-employment over salaried work nor in explaining earnings. The estimated age-earnings profiles are the same for natives and immigrants, while the proclivity to become self-employed is concave with respect to age for both groups. Immigrants' start with a higher probability to work than natives but have a slower increase in the self-employment probabilities thereafter. The earnings of self-employed immigrants' are higher initially, but their earnings path crosses eventually that of the natives. Second, we find some suggestion of ethnic entrepreneurial spirit. Turks are 70 per cent more likely to be self-employed than any other immigrant group, although they do not necessarily earn more. These patterns should be further explored. [ABSTRACT FROM AUTHOR]

This paper uses the concept of ethnic self-identification of immigrants in a two-dimensional framework. It acknowledges that attachments to both the country of origin and the host country are not necessarily mutually exclusive. There are three possible paths of adjustment from separation at entry, namely the transitions to assimilation, integration, and marginalization. We analyze the determinants of ethnic self-identification in this process using samples of first-generation male and female immigrants, and controlling for pre- and post-immigration characteristics. While we find strong gender differences, a wide range of pre-immigration characteristics like education in the country of origin are not important. [ABSTRACT FROM AUTHOR]

The German labor market reforms seem to be on the right track. However, they need to be adjusted especially on the organizational side to make them more effective. The labor market instruments can be concentrated on temporary company wage subsidies, training measures and financial incentives for business start-ups. It is essential to increase incentives, intensify competitive structures and to ensure clear-cut responsibilities. [ABSTRACT FROM AUTHOR]

The paper analyses the determinants of household work contracted in the German shadow economy. The German socio-economic household panel, which enumerates casual domestic employment, is used to estimate the demand for such household work. The regressors include regional wage rates, household income and several control variables for household composition. It is found that the demand for household work in the shadow economy is very income elastic. This suggests that targeted wage subsidies, linked to household work agencies, would be very effective in raising the legal demand for domestic help. A wage subsidy of 50% of wage costs could thus establish up to 500  000 new jobs for previously unemployed or non-working low skilled workers. The net fiscal costs of such a scheme are about 6.200 Euro per full-time job. In addition, society benefits from more law enforcement and from a raised female labour supply, especially by highly qualified mothers. [ABSTRACT FROM AUTHOR]

This paper uses a state of the art three-stage estimation technique to identify the determinants of the self-employed immigrant and native men in Germany. Their making is surprisingly alike. Employing data from the German Socioeconomic Panel 2000 (GSOEP) release we find that self-employment is not significantly affected by exposure to Germany or by human capital. But this choice has a very strong intergenerational link and it is also related to homeownership and financial worries. While individuals are strongly pulled into self-employment if it offers higher earnings, immigrants are additionally pushed into self-employment when they feel discriminated. Married immigrants are more likely to go into self-employment, but less likely when they have young children. Immigrants with foreign passports living in ethnic households are more likely self-employed than native Germans. The earnings of self-employed men increase with exposure to Germany, hours worked and occupational prestige; they decrease with high regional unemployment to vacancies ratios. Everything else equal, the earnings of self-employed Germans are not much different from the earnings of the self-employed immigrants, including those who have become German citizens. However, immigrants suffer a strong earnings penalty if they feel discriminated against while they receive a premium if they are German educated. [ABSTRACT FROM AUTHOR]

The labor market performance of Portuguese workers in Germany is analyzed in this article. While previous work has compared wages and characteristics of migrants to natives only, this study also matches the data set with an equivalent survey from the sending country. The findings show that Portuguese migrants as a whole are negatively selected, with the exception of blue-collar workers, the largest group among the movers. The finding that Portuguese migrants earn more than comparable Germans indicates that they have higher unobservable skills. [ABSTRACT FROM AUTHOR]

There is no simple solution to the German unemployment dilemma. Neither too high wages, nor unionized central bargaining, nor the evidence of the effects of the welfare state deliver a simple explanation. The East German experience confirms this view. A solution needs to combine flexibility with economic growth. More flexible product markets could help to generate the higher demand for unskilled labour that is so badly needed. [ABSTRACT FROM AUTHOR]

The speed at which immigrants assimilate is the subject of debate. Human capital formation plays a major role in this discussion. The authors compare second generation immigrants' educational attainments to those of similarly aged natives. Evidence from German data suggests ethnicity matters: ethnic network size has a positive effect on educational attainment, and a clear pattern is exhibited between countries-of-origin and education even in the second generation. For children of the foreign-born, parental schooling plays no role in educational choices. For Germans, contrary to the literature's general findings, there is a statistically significant difference in favor of father's over mother's education. [ABSTRACT FROM AUTHOR]

Examines determinants and compensation of overtime work in Germany. Skill differences in overtime hours; Problems on the proposal to reduce overtime work to allow employment of more people; Demand for skilled workers in the labor market; Loss of the importance of paid overtime work; Effect of high overtime premiums and low standard weekly hours.

The macro evidence of increased adjustment pressure since the early 1970s suggests that job mobility should have increased. Hence, retrospective and spell data from the German Socio-Economic Panel are combined in order to test the hypothesis that job stability for German workers declined between 1974 and 1994. Using count data regression models in which we control for labour market experience, various demographic factors, and occupation, we find that job stability did not decrease, but if anything increased, between 1974 and 1994. Our finding suggests that labour market inflexibility is an important factor in explaining the European unemployment problem. [ABSTRACT FROM AUTHOR]

The article investigates empirically the way firms respond to self-perceived disequilibrium. Underlying the analysis is a model of markets in which both buyers and sellers have incomplete information. Because buyers are not fully informed about the price charged by each seller, even small firms face a negatively sloped demand function. The article states that despite the amount of attention devoted in economics to the study of equilibria, the process by which equilibrium can be attained is not well understood. Economist Stephen Smale called this "the fundamental problem of economic theory." This article explores microeconomics of the adjustment process by examining empirically the disequilibrium behavior of firms. Implications for microeconomic foundations of macroeconomics are stressed. The data, from German industry, describes month-by-month price and output changes of individual firms, as well as firms' own assessments of levels of their inventories and unfilled orders. Section I of the article discusses the underlying model of firm behavior and the significance of the inquiry for macroeconomics. In Section II, econometric techniques are briefly described. In Section III, empirical results are summarized and interpretations of results are offered in Section IV.

Migration has become a major concern of European development policies. By improving socio-economic and political conditions through development cooperation, a reduction of South-North migration flows is envisaged. This new approach is examined by analyzing the causes of asylum migration from developing countries to Germany. The econometric findings suggest that support of democracy, economic development and trade will not reduce migration, at least not in the medium-run. However, restrictive legal measures work. Migration control by international development cooperation therefore seems to need a long-term perspective. [ABSTRACT FROM AUTHOR]

A dynamic monthly consumer expenditure system is estimated for an aggregate household and three household types using recent German data. The results tend to support the long-run restrictions of homogeneity and symmetry for the aggregate household, but only when short-run dynamics are modelled following the method of Anderson and Blundell. The required lags are short. However the results for the partially-disaggregated data are markedly different; in particular the integrability restrictions can be rejected for the sample of high-income workers. Therefore contrary to the usual presumption, the less aggregated data seem more at variance with the restrictions of utility maximization. [ABSTRACT FROM AUTHOR]

The purpose of this paper is to examine whether price expectations satisfy the rationality hypothesis in Muth's sense, using direct observations on price expectations included in the IFO business survey data. The IFO Institute of Munich has been conducting monthly panel surveys for over 5000 manufacturing establishments. They are asked, for one thing, whether their selling prices will increase, remain the same or decrease over the next three months. The question about the actual price changes is also included in the survey. If the problems arising due to the qualitative nature of the data are solved, this unique set of data should provide valuable information for the study of price expectations.
First, the data construction is explained in Section II. Then, Section III contains the development of several statistical measures of forecasting performance for the qualitative data. In Section IV the accuracy and consistency of prediction, are examined. Section V investigates the validity of the rational expectation hypothesis by testing the unbiasedness and efficiency of price expectations. The main empirical findings and their implications are discussed in Section VI. [ABSTRACT FROM AUTHOR]

• We estimate the effect of ethnic capital on human capital investment decisions. • We exploit a rare immigrant settlement policy in Germany. • Children of low-educated parents benefit from high-educated co-ethnic parental peers. • High-educated parental peers from other ethnicities have no impact. Estimating the effect of ethnic capital on human capital investment decisions is complicated by the endogeneity of immigrants' location choice, unobserved local correlates and the reflection problem. We exploit the institutional setting of a rare immigrant settlement policy in Germany, that generates quasi-random assignment across regions, and identify the causal impact of heterogeneous ethnic capital on educational outcomes of children. Correcting for endogenous location choice and correlated unobservables, we find that children of low-educated parents benefit significantly from the presence of high-educated parental peers of the same ethnicity. High educated parental peers from other ethnicities do not influence children's learning achievements. Our estimates are unlikely to be confounded by the reflection problem since we study the effects of parental peers' human capital which is pre-determined with respect to children's outcomes. Our findings further suggest an increase in parental aspirations as a possible mechanism driving the heterogeneous ethnic capital effects, implying that profiling peers or ethnic role models could be important for migrant integration policies. [ABSTRACT FROM AUTHOR]

This article focuses on the issue of working hours. According to the author, in the past decades, there has been a steady trend towards shorter working time in Germany, but now the dispute is over extending working time. Weekly working time is under discussion, as is annual working time and working life as a whole. The most recent efforts by the trade unions to shorten the working week foundered in a useless conflict in eastern Germany, and this marked the start of a debate over lengthening the working week. In fact, it is beginning to dawn on many decision-makers in business and politics that weeding out large numbers of older workers by offering a golden pre-retirement handshake is a dead end for social policy. It simply drives up expenditure on social insurance and with it wage costs, which are linked to social insurance. The fat cushion of annual leave and public holidays, excessive by international comparison, has destroyed the image of the Germans as a hard-working nation. It was learned that people in Europe work less than people in the U.S., and a good part of the difference has only developed in the past 20 to 30 years. In Holland, part-time work has increased enormously, and this has also brought the average working hours down. That is the direction in which Germany will have to go if it is to tackle its unemployment problem effectively.

The article focuses on the German Labour Market. The problems of the German labour markedly. In the 1960s, labour market problems seemed lo have been solved. Full employment was defined as an unemployment rate of close to zero. Economic growth - at an impressive average of four percent - guaranteed a high standard of living and encouraged the creation of a comprehensive social welfare system on the basis of seemingly secure growth prospects. Early warnings that this was merely a fair-weather system were ignored. Even as global crises and impending demographic changes caused the first disruptions of the system in the 1980's, nothing was done lo change course. Distracted by the subsequent positive trend in global economic development, and later by German reunification, labour market polity has been dominated by social polity objectives throughout the past two decades. The Christian socialism of the Kohl era continued to shape national policy during Schroeder's first term. In this kind of situation, marginal changes in labour market policy are useless. The only way out of the current dilemma is a complete reorganization of labour market policy and the social security system. This can only be done, however , if the government initiates the necessary steps.

It is estimated in a media friendly fashion that proposals related to Federal Labour Office's Reform Commission, have been put in place, unemployment can be at least halved. Not only does this raise high expectations, it also reminds the failed promises of two German Chancellors. The calculations offered upto now to underpin this potential for improvement are based as far as one can discern, on simple suppositions rather than on a scientifically rigorous examination of the proposed measures. The proposals centre around expanding temporary work agencies, increasing the speed of employee placementl, and making it easier lo be self-employed. The paper provides a wealth of interesting approaches with regard to these points. For example, by means of early registration for work, improved assistance and support, and tougher requirements, work is lo be found more quickly for the unemployed. The lack of clarity begins with the revival of the dream of an omnipotent public employment agency.

In this article the author presents his viewpoint on the economic slowdown that hit Germany severely. This is partly a result of the slowdown in the U.S., and partly a consequence of rising costs fueled by higher petrol and food prices. The Southeast Asian economies also fail to demand German exports in sufficient quantities to help maintain full order books and confidence in German industry. With weakening world-wide growth and the threat of a recession in Germany, the government should, however, re-assess its medium-term policy mix and examine to implement the next steps of its tax reform much earlier. This could imply substantial tax reductions in 2002. It would improve the incentive structure in Germany and send a clear signal that the government is committed to growth. Furthermore, the European Central Bank should recognize the short-term nature of the inflationary pressure and lift the monetary constraint on European economic growth. The EU should hence lower interest rates to stimulate demand and signal its belief in the long term price stability of the euro.