Abstract
This paper addresses trends in education-specific unemployment risks at labor market entry in West Germany from the mid-1970s to the present. In line with previous research it shows that vocationally qualified school-leavers have relatively lower unemployment risks than school-leavers with general education. Over time, the gap in unemployment risks between the low-educated and medium- and highly educated labor market entrants substantially widened for both sexes. The literature identifies two different mechanisms for this trend: structural or cyclical crowding out. While in the former scenario low-educated become increasingly unemployed due to an oversupply of tertiary graduates and displacement from above, in the latter their relative unemployment risk varies with the business cycle. The results provide evidence for cyclical rather than structural crowding-out in West Germany. Since macroeconomic conditions became generally worse over time, this strongly explains the widening unemployment gap between the low-educated and all other education groups.
| Language | English |
|---|---|
| Pages | 110-125 |
| Number of pages | 16 |
| Journal | Social Science Research |
| Volume | 50 |
| Early online date | 27 Nov 2014 |
| DOIs | |
| State | Published - 1 Mar 2015 |
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Keywords
- returns to education
- unemployment
- low-educated
- crowding out
- fixed effects
Cite this
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The increasing unemployment gap between the low and high educated in West Germany : structural or cyclical crowding-out? / Klein, Markus.
In: Social Science Research, Vol. 50, 01.03.2015, p. 110-125.Research output: Contribution to journal › Article
TY - JOUR
T1 - The increasing unemployment gap between the low and high educated in West Germany
T2 - Social Science Research
AU - Klein,Markus
N1 - Copyright © 2014 Elsevier Inc. All rights reserved.
PY - 2015/3/1
Y1 - 2015/3/1
N2 - This paper addresses trends in education-specific unemployment risks at labor market entry in West Germany from the mid-1970s to the present. In line with previous research it shows that vocationally qualified school-leavers have relatively lower unemployment risks than school-leavers with general education. Over time, the gap in unemployment risks between the low-educated and medium- and highly educated labor market entrants substantially widened for both sexes. The literature identifies two different mechanisms for this trend: structural or cyclical crowding out. While in the former scenario low-educated become increasingly unemployed due to an oversupply of tertiary graduates and displacement from above, in the latter their relative unemployment risk varies with the business cycle. The results provide evidence for cyclical rather than structural crowding-out in West Germany. Since macroeconomic conditions became generally worse over time, this strongly explains the widening unemployment gap between the low-educated and all other education groups.
AB - This paper addresses trends in education-specific unemployment risks at labor market entry in West Germany from the mid-1970s to the present. In line with previous research it shows that vocationally qualified school-leavers have relatively lower unemployment risks than school-leavers with general education. Over time, the gap in unemployment risks between the low-educated and medium- and highly educated labor market entrants substantially widened for both sexes. The literature identifies two different mechanisms for this trend: structural or cyclical crowding out. While in the former scenario low-educated become increasingly unemployed due to an oversupply of tertiary graduates and displacement from above, in the latter their relative unemployment risk varies with the business cycle. The results provide evidence for cyclical rather than structural crowding-out in West Germany. Since macroeconomic conditions became generally worse over time, this strongly explains the widening unemployment gap between the low-educated and all other education groups.
KW - returns to education
KW - unemployment
KW - low-educated
KW - crowding out
KW - fixed effects
UR - http://www.sciencedirect.com/science/article/pii/S0049089X14002166
U2 - 10.1016/j.ssresearch.2014.11.010
DO - 10.1016/j.ssresearch.2014.11.010
M3 - Article
VL - 50
SP - 110
EP - 125
JO - Social Science Research
JF - Social Science Research
SN - 0049-089X
ER -