Skill premiums and the supply of young workers in Germany

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• dc.contributor.author Glitz, Albrecht Christian Ekkehard, 1978-
• dc.contributor.author Wissmann, Daniel
• dc.date.accessioned 2022-05-19T06:40:48Z
• dc.date.available 2022-05-19T06:40:48Z
• dc.date.issued 2021
• dc.description.abstract In this paper, we study the development and underlying drivers of skill premiums in Germany between 1980 and 2008. We show that the significant increase in the medium-to-low skill premium since the late 1980s was almost exclusively concentrated among workers aged 30 or below. Using a nested CES production function framework which allows for imperfect substitutability between young and old workers, we show that changes in relative labor supplies can explain these patterns very well. A cohort-level analysis reveals that distinct secular changes in the educational attainment of the native population are the primary source of the declining relative supply of medium-skilled workers in Germany. Low-skilled immigration, in contrast, only plays a secondary role in explaining the rising lower-end wage inequality in Germany over recent decades.
• dc.description.sponsorship Albrecht Glitz gratefully acknowledges financial support from the Spanish Ministry of Economy and Competitiveness (through the Severo Ochoa Programme for Centres of Excellence in R&D, SEV-2015-0563) and the Ministry of Science, Innovation and Universities (through the National Programme for the Promotion of Talent and Its Employability, the Ramón y Cajal grants, MINECO-RYC-2015-18806, and Project No. ECO2017-83668-R (AEI/FEDER, UE)). He also thanks the German Research Foundation (DFG) for funding his Heisenberg Fellowship (GL 811/1-1) and Alexandra Spitz-Oener for hosting him at Humboldt University Berlin. Daniel Wissmann acknowledges funding through the International Doctoral Program “Evidence-Based Economics” of the Elite Network of Bavaria and the LMU Forschungsfonds. This study uses the factually anonymous Sample of Integrated Labour Market Biographies (version 1975-2010). Data access was provided via a Scientific Use File supplied by the Research Data Centre (FDZ) of the German Federal Employment Agency (BA) at the Institute for Employment Research (IAB), Project No. 101003.
• dc.format.mimetype application/pdf
• dc.identifier.citation Glitz A, Wissmann D. Skill premiums and the supply of young workers in Germany. Labour Economics. 2021 Oct;72:102034. DOI: 10.1016/j.labeco.2021.102034
• dc.identifier.doi http://dx.doi.org/10.1016/j.labeco.2021.102034
• dc.identifier.issn 0927-5371
• dc.identifier.uri http://hdl.handle.net/10230/53161
• dc.language.iso eng
• dc.publisher Elsevier
• dc.relation.ispartof Labour Economics. 2021 Oct;72:102034
• dc.rights © 2021 The Author(s). Published by Elsevier B.V. This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/).
• dc.rights.accessRights info:eu-repo/semantics/openAccess
• dc.rights.uri http://creativecommons.org/licenses/by-nc-nd/4.0/
• dc.subject.keyword Cohorts
• dc.subject.keyword Baby boom
• dc.subject.keyword Labor supply
• dc.subject.keyword Labor demand
• dc.subject.keyword Skill-biased technological change
• dc.subject.keyword Wage distribution
• dc.subject.keyword Wage differentials
• dc.title Skill premiums and the supply of young workers in Germany
• dc.type info:eu-repo/semantics/article
• dc.type.version info:eu-repo/semantics/publishedVersion