NBER Working Papers by Wolfgang Franz

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Working Papers

October 1997Young and Out in Germany: On the Youths' Chances of Labor Market Entrance in Germany
with Joachim Inkmann, Winfried Pohlmeier, Volker Zimmermann: w6212
This paper deals with the labor market entrance of young people in the Federal Republic" of Germany. The main focus is on failures during this stage. First, an overview of the youth" labor market in Germany is given. Then, the transition from vocational training to work is" analyzed: The duration of the first spell of non-employment after completion of formal" vocational training is analyzed by means of a proportional hazard function approach. Besides the" strong influence of the human capital variables there is a striking effect of the family background" of the youths. The following section addresses the extent to which early failures in the work" history have long-lasting effects on future incomes. There is some evidence for a permanent" income reduction.
March 1993German and American Wage and Price Dynamics: Differences and Common Thenes
with Robert J. Gordon: w4292
The evolution of unemployment in West Germany and the U. S. stands in sharp contrast, with German unemployment much lower from 1960 to the early 19705 but substantially higher from 1984 to 1988. This paper provides a framework for examining the relationship between inflation and unemployment that sheds light on these developments. The theoretical section develops a new nonstructural model of wage and Price adjustment that integrates severa! concepts that have often been treated separately, including Phillips curve "level effects," hysteresis "change effects," the error-correction mechanism, and the role of changes in labor's share that act as a supply shock. The empirical analysis reaches rwo striking conclusions. First, during 1973-90coefficients in our German wage equations arc remarkabl...
November 1980The Reservation Wage of Unemployed Persons in the Federal Republic of Germany: Theory and Empirical Tests
This study examines the determinants of the reservation wage of unemployed persons in the Federal Republic of Germany in 1976. The theoretical section presents the derivation of an optimal reservation wage and shows the source of an ambiguity of some explanatory variables. The data basis are unemployed persons leaving the unemployment register within a given sample week. For a subset of them, we know their reservation wage and a set of personal characteristics. Other variables, such as the wage offer distribution and demand side variables, are obtained by employing other data. Methodological problems, such as as a sample selection bias, are taken into account. As a result, individual characteristics and the wage offer distribution are dominant causes of the reservation wage, but demand sid...
October 1979The Duration of Youth Unemployment in West Germany: Some Theoretical Considerations
This paper presents a theoretical model dealing with the duration of youth unemployment in West Germany. Duration can be expressed in terms of the underlying hazard function. After a brief discussion of a reasonable shape of the hazard function a distinction is made with respect to the probabilities of receiving a job offer and accepting it. Determinants of the latter decision are developed using a unified model of consumption, leisure, and job search. Uncertainty and some restrictions such as standard work time and entitlement to unemployment compensation are taken into account. The probability of receiving a job offer depends, among other factors, on the screening process undertaken by the firms .

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