Abstract

Enabling long-term unemployed individuals to re-enter employment and become self-sufficient has been a major policy challenge in recent years. At the same time, the ongoing digital transformation is altering the labour market, which poses new challenges for social and labour market policy. As a consequence of the digital transformation, the requirements, tasks and quality of jobs change. Furthermore, since the implementation of the last step of the Hartz reforms and the introduction of the new welfare benefit ‘unemployment benefit ii’ in Germany, welfare recipients are required to accept any reasonable job offer. This might result in many welfare recipients taking up jobs of low quality.
The paper studies determinants of unemployed welfare recipients’ transition into employment. The paper especially focuses on job quality, and investigates how determinants of entering jobs of varying quality differ. As one aspect of job quality, we consider the degree of digitalisation of the jobs, which can indicate job insecurity. Digitalisation is operationalised via the occupation-specific substitution potential, i.e. the extent to which occupational tasks can already be replaced by computers or machines today. Thus, jobs with a high substitution potential may be insecure, as they are substitutable by computers or computer-controlled machines. In addition, we also consider further dimensions of job quality: earnings, employment stability, working time and occupational exposure (e.g., lifting heavy loads or time pressure). Special consideration is given to the business cycle and to previous job quality as a determinants of the quality of jobs welfare recipients enter and. The analyses are based on a large sample of welfare recipients in Germany starting their episodes as non-employed welfare benefit recipients between 2007 and 2012. We use administrative data (Sample of integrated welfare benefit biographies) from the Federal Employment Agency prepared at the Institute for Employment Research and discrete-time hazard-rate models.