Kiel Working Papers, Kiel Institute for World Economics
No 959:
Structural Change of the Production Process and Unemployment Duration in Germany
Axel Schimmelpfennig
Abstract: Based on a Cox Proportional Hazard analysis of German
unemployment spells, structural change of the production process is
identified as a major explanation for long-term unemployment. Other
important covariates capture labor market institutions, macroeconomic
stress factors, and individual characteristics. Structural change of the
production process has resulted in a shift in labor demand across
occupations and skills. For individuals laid off from declining parts of
the economy, this implies a devaluation of their human capital. They need
to acquire new skills for positions in expanding parts of the economy, or
spend a longer time in unemployment searching for the few remaining jobs
for which they possess adequate skills.
Keywords: Unemployment duration, Cox Proportional Hazard model, structural change; (follow links to similar papers)
JEL-Codes: J62; J64; C41; (follow links to similar papers)
37 pages, December 1999
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