Volume 227, Issue 2

Equilibrium search theory suggests that the wage distribution in a cross section of workers is closely related to labor market transitions and associated wage changes. Accordingly, job-to-job transitions are central in explaining the wage distribution. This paper uses the IAB employment subsample 1975-2001 to describe the empirics of labor market transitions and the wage structure in Germany. Motivated by search theory, we use the data to explore descriptively labor market transitions and features of the wage structure. We find that labor market transition rates vary substantially over the business cycle and with individual characteristics. Regarding job-to-job transitions, we find huge wage changes. Most job changes involve considerable gains, but a sizeable number of individuals incurs a remarkable loss. Regarding the wage structure, we find strong effects of job-to-job transitions, age, and education on wage mobility. Based on our descriptive analysis, we conclude that indeed a close relationship exists between wages and labor market transitions as predicted by search theory. However, the noticeable share of wage losses following job-to-job changes contradicts a simple search-theoretic perspective.

The number of self-employed workers in Europe has been in decline since the 1990s. At the same time unemployment has decreased and GDP per capita increased. In this study we analyse macroeconomic causes of these trends for the EU 15. We use data from the European Labour Force Survey for the period from 1991 to 2003. Our panel data analyses suggest that the number of self-employed workers in the EU 15 decreases with falling unemployment, while GPD per capita at first augments but later on diminishes self-employment. Rising real interest rates and rising tax rates decrease self-employment. Unemployment and tax rates seem to enhance especially the number of single entrepreneurs and not the number of self-employed with employees. The findings for Europe suggest that self-employment in itself is not necessarily an appropriate economic policy objective when considering the strong effects on single entrepreneurs and the nonlinear correlation between self-employment and GDP per capita.

In the aftermath of Germany’s reunification, redesigning their product range was a major challenge for East-German enterprises. At the same time, there were growing signs that Western enterprises reacted to globalization and European integration by increasingly pursuing strategies of specialization. Using representative micro data from Germany’s system of register based, official firm surveys, this paper studies how manufacturing enterprises from both parts of the country reshaped their product policies in recent years. Our analysis reveals a common trend towards greater specialization during the period from 1995 to 2001. This process of focusing on their core competencies and reducing their range of products was more pronounced in the East - most likely as a result of the increased integration of Eastern firms into international markets. We apply a nonparametric decomposition that yields estimates of the structural and regional components of the West-East gap. We find that in 2001 no significant gap remains among Eastern and Western enterprises of a similar, comparable type. However, there still exist pronounced structural differences. In particular, in 2001 East Germany is still lacking the large firms in many industries that push up the level of West German product diversification and economic performance.

In this paper, we investigate the informational content of citation-based research evaluations. To illustrate our analysis we refer to the 2005 Handelsblatt ranking of German academic economists. We make extensive use of the recently developed Hirsch-index and relate citation incidence to publication success, career age, and the topicality of the individual researchers’ field of specialization. We arrive at the conclusion that citation-based indicators provide a very incomplete picture of research performance. To obtain acceptable bibliometric research evaluations, citation based indicators need to be complemented with indicators that measure publication success more directly.