Extent and structure of the hidden labour force in Western German

Abstract

"The article analyses how the hidden labour force has developed in the recent past and what role the far-reaching modifications ensuing from the labour market reforms of 2005 (Hartz IV) have played. Estimations published by IAB in 2005 are used as a starting point. On the basis of these estimation equations, the hidden labour force was calculated up to 2007 using topical data.<br> Against expectations, the present updated estimations show an increase in the hidden labour force in spite of the labour market reforms of 2005. The labour reserve increased strongly between 2004 and 2005 mainly among young people (under 25 years of age) and German women. In contrast, the number of elderly persons (over 50 years old) as well as the number of German men who were part of the hidden labour force dropped relatively sharply.<br> This surprising growth in the hidden labour force may be caused by several effects: on the one hand the Hartz IV reforms enforced a principle of 'encouragement plus obligations' and were expected to result in a greater number of persons registering at the employment offices - persons, that is, who were capable of and available for work and had so far neither registered as unemployed nor were gainfully employed. On the other hand it is possible that the very negative information on Hartz IV spread in the media caused many people not to register. Moreover, as a significant part of the hidden labour force participates in employment and training schemes, such people are thus already registered and therefore not affected by Hartz IV.<br> Altogether the updated estimations show that alongside official unemployment there is still a considerable hidden labour force of persons who are willing to work. Even after Hartz IV, the 'true' nature of underemployment is still considerably underrepresented by official data." (Author's abstract, IAB-Doku) ((en))

Cite article

Fuchs, J. & Weber, B. (2010): Umfang und Struktur der westdeutschen Stillen Reserve. Aktualisierte Schätzungen. (IAB-Forschungsbericht 11/2010), Nürnberg, 37 p.