Die Dis cus si on Pape rs die nen einer mög lichst schnel len Ver brei tung von neue ren For schungs arbei ten des ZEW. Die Bei trä ge lie gen in allei ni ger Ver ant wor tung der Auto ren und stel len nicht not wen di ger wei se die Mei nung des ZEW dar.Dis cus si on Papers are inten ded to make results of ZEW research prompt ly avai la ble to other eco no mists in order to encou ra ge dis cus si on and sug gesti ons for revi si ons. The aut hors are sole ly respon si ble for the con tents which do not neces sa ri ly repre sent the opi ni on of the ZEW.Download this ZEW Discussion Paper from our ftp server:ftp://ftp.zew.de/pub/zew-docs/dp/dp10024.pdf Non-technical summaryDeclining labour shares in a large number of countries, particularly in continental Europe, have renewed the academic and political debate about the factors which explain these downward trends. While the share accruing to labour in the division of national income was long being seen as constant over time, this stylised fact has recently been challenged. Several explanations for temporal and persistent movements of the labour share have been brought forward in the debate: effects of structural and technological change, influences of globalisation and increased product market integration, and the importance of institutional settings, often with a focus on wage bargaining structures.The aim of this paper is to take a structured empirical approach at assessing the relative importance of those factors across countries. In particular, we focus on proper dynamic model specification and test the validity of the homogeneity assumption of slope coefficients frequently implied in previous studies. We employ fixed effect estimators as well as pooled mean group and mean group estimators, the latter two in a dynamic heterogeneous panel framework.In a sample of OECD countries, we find negative effects for two explanatory variables of the labour share: the capital output ratio and trade openness. Furthermore, we are not able to reject the homogeneity assumption on the slope coefficients. This first finding lends important support to the standard theory on labour share movements. However, as far as other explanatory variables often found in the literature go, the picture is more mixed. Total factor productivity, in particular, is found to exert heterogeneous effects across countries and no clear support for the pooling assumption of slope coefficients in a linear dynamic model is found.In order to add more detail to our analysis and to address the role of institutional arrangements, in particular with respect to the bargaining process, we split the sample into two groups of countries characterised by differently strong unions. We find important differences in the coefficient values and levels of significance. For more marketoriented countries with lower union density, we see the labour share being driven down by variables capturing technological change and shifts in the relative usage of factors of production. For countries with strong unions, however, we find ...

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Jens Wrona * * * Terms of use: Documents in University of TübingenNovember 13, 2013 AbstractWe offer a theoretical explanation and empirical evidence for a positive link between increased offshoring and individual skill upgrading. Skill upgrading takes the form of on-thejob training, complementing the existing literature, which mainly focuses on the retraining of workers after a direct job displacement through offshoring. To establish a link between offshoring and on-the-job training, we introduce an individual skill upgrading margin into the small-open-economy version of the Grossman and Rossi-Hansberg (2008) model of offshoring. In our model offshoring, by scaling up workers' wages, creates previously unexploited skill upgrading possibilities and, thus, leads to more on-the-job training. Using data from German manufacturing, we find strong empirical support for the prediction that increased offshoring is positively related to individual on-the-job training participation. JEL-Classification: F10, F16, F61

Die Dis cus si on Pape rs die nen einer mög lichst schnel len Ver brei tung von neue ren For schungs arbei ten des ZEW. Die Bei trä ge lie gen in allei ni ger Ver ant wor tung der Auto ren und stel len nicht not wen di ger wei se die Mei nung des ZEW dar.Dis cus si on Papers are inten ded to make results of ZEW research prompt ly avai la ble to other eco no mists in order to encou ra ge dis cus si on and sug gesti ons for revi si ons. The aut hors are sole ly respon si ble for the con tents which do not neces sa ri ly repre sent the opi ni on of the ZEW.Unemployment and labor reallocation in Europe * Jan Hogrefe * * ZEW MannheimAndreas Sachs * * * ZEW MannheimOctober 20, 2014 AbstractWe ask whether sectoral shocks and the subsequent labor reallocation are responsible for unemployment within selected European economies. Our measure of sectoral labor reallocation is adjusted for aggregate influences and the remaining variation is linked to unemployment in country specific dynamic models. For Spain, the ADL-model estimation reveals a significant impact of sectoral reallocation on unemployment that goes beyond usual business cycle patterns. In Italy, there is weaker yet detectable evidence for this mechanism. In Ireland, Portugal and France, no significant influence of sector level shocks on unemployment is found. The results emphasize the potential structural supply side policies have for reducing unemployment in Spain.JEL-Classification: E24, J62, J64

Die Dis cus si on Pape rs die nen einer mög lichst schnel len Ver brei tung von neue ren For schungs arbei ten des ZEW. Die Bei trä ge lie gen in allei ni ger Ver ant wor tung der Auto ren und stel len nicht not wen di ger wei se die Mei nung des ZEW dar.Dis cus si on Papers are inten ded to make results of ZEW research prompt ly avai la ble to other eco no mists in order to encou ra ge dis cus si on and sug gesti ons for revi si ons. The aut hors are sole ly respon si ble for the con tents which do not neces sa ri ly repre sent the opi ni on of the ZEW. Non-technical summarySince trade is becoming more of a task-related phenomenon due to the increase in offshoring activities by firms, the pattern of effects across workers is changing as well. In particular, the skill-based characterization of differentially affected groups falls short of comprehensively capturing the effects. Offshoring occurs based on relocation cost for single occupations, which do not necessarily reflect skill intensities. This paper puts this claim to a test by analyzing industry level relative labor demand from a task perspective. First, a model is developed to describe the mechanisms underlying the link between offshoring and shifts in employment and cost shares of tasks. This model explicitly treats occupations as fixed bundles of tasks which are, as a whole, subject to the offshoring decision. This is a crucial difference to skill-based approaches, in which individuals either supply high-skilled or low-skilled labor, with complete mobility across industries or stages of production. Furthermore, the model highlights the between-occupation dimension in task share changes in the economy. The model introduces a sorting mechanism of individuals across occupations, which relies on a trade off between occupations specific wages and individual abilities in terms of effort needed for the execution of certain tasks. In such a setting, an overall fall in offshoring costs can shift the cut-off occupation, which separates home from foreign production, such that the range of occupations at home shrinks. Crucially, this remaining range of occupations is characterized by a higher non-routine and interactive task content. Since workers whose jobs have gone offshore optimally re-sort into these occupations, average employment shares and cost shares of routine and non-interactive tasks fall in the home economy.Introducing occupations as bundles of tasks provides a new and consistent way of theoretically sound estimation of relative labor demand for tasks. Second, the theoretical predictions are tested with industry level data from German manufacturing. A clear and robust result emerges. An increase in offshoring significantly reduces home country relative demand for routine and non-interactive tasks -in particular if this offshoring is directed towards non-OECD countries. This result is robust to various alterations and the use of instrumental variable methods. The additional value compared to skill related measures is demonstrated by the fact that this d...

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