Neue Schätzungen für die Stille Reserve - erstmalig Anwendung des IAB-Konzepts auf Gesamtdeutschland

Abstract

"This report presents unified estimations of the hidden unemployment for the first time for the whole of Germany by implementing the IAB-approach that was only before applied for West Germany. The fundamental and internationally established hypothesis of the IAB-approach is that the labour participation is influenced by the labour market performance, for example the unemployment rate. Therefore, a regression equation is estimated, with the labour participation rate as the dependent variable and an unemployment indicator as an independent variable. We use labour participation rates by age, gender and nationality, based on the German Microcensus. The estimations are restricted to 15 to 64 years olds. For methodological reasons, the labour participation rates are transformed into logits. For the influence of the labour market indicator, we tested different variables, e.g. the overall unemployment rate, the unemployment rate or women, or the vacancy rate. The labour market indicators are obtained from the statistic of the Federal Employment Agency. Furthermore, the estimations consider several covariates, like wages, retirement age, etc. All in all, regressions for 40 subpopulations were conducted with time series that covers the period 1991 to 2019. The estimations support the thesis of a discouragement effect for each subpopulation, which outperforms any added worker effect. This means labour participation will shrink in case of rising unemployment figures. In order to calculate hidden unemployment rates, and absolute figures of the hidden unemployed, we applied a regional benchmark approach. For each labour market indicator the best figure was identified across the federal states in Germany. The difference of the real figure to this benchmark leads to the hidden unemployment rate. The level of the estimated hidden unemployment is close to former calculations, combined for East and West Germany. Relevant deviations occur only in the first years after the German unification, presumably caused by an extreme increase in East Germany. As many data will not be available separate for East and West, our current approach might be a good, forward-looking base for future estimations. After the Hartz-reforms, hidden unemployment in Germany shrinks from 1.72 million in 2006 to less than 900,000 in 2019. The sex ratio was balanced in the near past. Almost a quarter of the hidden unemployed were non-German, which is far more as their population share." (Author's abstract, IAB-Doku) ((en))

Cite article

Fuchs, J. & Weber, B. (2021): Neue Schätzungen für die Stille Reserve - erstmalig Anwendung des IAB-Konzepts auf Gesamtdeutschland. (IAB-Forschungsbericht 06/2021), Nürnberg, 60 p.