P7

Project Team:
Prof. Dr. Dr. h.c. mult. Wolfgang Franz, ZEW Mannheim
PD Dr. Bernhard Boockmann, ZEW Mannheim
Dipl.-Volksw. Susanne Steffes, ZEW Mannheim

In this project, we analyse the differences in employment durations of workers within the same enterprise. Apart from well-established theoretical approaches, such as human capital theory or search and matching models, we consider recently developed models of segmented labour markets. Furthermore, we assess the role of institutions and whether they contribute to a division of the labour market into segments of permanent and unstable employment.

The objectives of the project are the following. First, the extent to which short-term and long-term employment relationships coexist within firms is investigated. Second, it is analysed whether this form of coexistence is concentrated in certain areas of the labour market, and whether any changes over time can be observed in this respect. Third, the driving factors (individual versus firm level factors) behind the observed differences in job stability and worker mobility are identified. Fourth, the extent to which German labour market regulations (in particular, protection against dismissal regulations and fixed-term employment contracts) may induce segmentation is analysed, focussing on differences in job stability between different parts of the employment duration (job tenure) distribution in different firms.

The analysis of employment durations is related to studies concerning the reasons for individual job mobility. As in many studies on this subject, we account for different destination states for workers leaving firms.

The project fits closely into the overall objectives of the new DFG Priority Programme. First, job stability is one important dimension of job heterogeneity. Second, the topic is directly related to labour market flexibility, as it is likely that there may be an inverse relationship between firms� flexibility and the job stability of its workforce. Finally, the role of labour market institutions possibly affecting flexibility is taken into account.