The dynamics of wages, employment and unemployment

The dynamics of wages, employment and unemployment will be investigated using a newly available data set comprising individual information on all Austrian workers for the last 25 years. Using this exceptional panel data set, I propose to look at policy-relevant questions from a new angle. The advantage of this perspective is that it allows to investigate more carefully the causal effects of economic policies and other events. Some questions are: What costs in terms of lost income prospects and unemployment have workers who are separated from their jobs? The data set allows me to follow displaced workers over 10 years who were displaced because of a plant closure. What happens to jobs that are created in a specific phase of the business cycle? How long do these jobs survive? What happens to jobs created by newly founded firms? Absenteeism and sickness leave episodes have been found to vary over the business cycle. What are the reasons for this phenomenon? The Austrian workforce is characterized by a preponderance of apprenticeship training. What are the returns to this training for apprentices themselves? What are the reasons for the reduced supply of apprenticeship positions in Autria? How does the apprenticeship training relate to the youth labor market in general, and job mobility in particular? The pay structure in Austria is characterized by a significant return to work experience as well as job seniority. What are the effects of these seniority pay scales on employment of marginal labor market groups, like the young and the elderly? The research project is international in scope, because I plan to collaborate with researchers from the UK, the US, Germany, Italy and Switzerland.

The project is concerned with the dynamics of wages and employment in Austria, effects of schooling and apprenticeship and an evaluation of social security regulations. Has unexpected unemployment long-term consequences? In a case study of layoffs due to plant closures we can show, that those affected by a plant closure have substantially lower employment rates as well as lower earnings - even ten years after displacement - everything compared to a group of control persons who share all the characteristics of the treated persons. This is particularly so for elderly workers, who have big problems to secure a new job. In other studies we show how the regulation of unemployment benefits interacts with the duration of measured unemployment: negative effects of higher benefit payments are much lower as those stemming from a prolonged potential duration of such benefits. The Austrian apprenticeship system is widely considered as a role model: in our studies we measure the efficacy of the system - more or less apprenticeship training for persons with generally low education - by looking at labor market integration. It can be shown that apprenticeship training does not further earnings growth much, but it does a good job in preventing the young workers from being unemployed in the future. Further aspects concern wage differentials with regard to education as well as questions of wage mobility over time: i.e. how do individual incomes evolve over time, how volatile are they.