The research department “Labour market processes and institutions” focuses on labour market processes underlying the macroeconomic labour market development. Particular emphasis is given to market imperfections, such as rigidities and frictions, and their interactions with labour market institutions. Institutions of interest include e.g. collective bargaining, codetermination, minimum wages and wage replacement benefits. Approaching these issues and their macroeconomic consequences from a microeconomic perspective, the department’s work addresses outcomes, such as job flows, hirings and separations, individual (un)employment dynamics, the quality of labour market matches as well as wage dynamics.

A key focus of the department is the "IAB Job Vacancy Survey,“ which provides a unique representative establishment-level data base on the number and structure of vacancies as well as rich information on the hiring process. In running this survey, the department is able to offer rigorous scientific policy advice on questions such as skill demand, skill shortages and the degree of labour market tightness in various segments of the labour market. The survey further includes wave-specific items on specific labour market issues, in order to inform decision makers on current topics of policy interest, as e.g. the job prospects of elderly workers, the long-term unemployed and migrants, amongst others.

To address these questions, the department combines its expertise in data collection and the analysis of large-scale survey and administrative data sets with a sound knowledge of quantitative – mainly micro-econometric - methods.