The German labor market response in the world recession – de-mystifying a miracle

Journal for Labour Market Research

Table 3 Regression of the change in unemployment rates on the level of the unemployment rate (413 German NUTS 3 regions)

	Dependent variable: Δ unemployment rate
	OLS	Weighted OLS	Weighted OLS	Weighted OLS
	Coef.	t-stat.	Coef.	t-stat.	Coef.	t-stat.	Coef.	t-stat.
Unemployment rate	−0.094	−7.990	−0.078	−3.890	−0.064	−3.490	−0.009	−0.400
ln (export share)	–	–	–	–	0.307	4.060	0.347	4.390
Employment share secondary sector	–	–	–	–	–	–	0.031	5.050
Constant	2.068	15.760	2.237	7.690	−0.142	−0.390	−1.823	−4.070
N	413	335
R ²	0.145	0.117	0.107	0.136

Notes: Data source: Authors' own calculations using data from the statistical department of the Federal Labor Agency and from the INKAR database of the Federal Office for Building and Regional Planning (BBR), Bonn. The change of the unemployment rate is calculated from October 2008 to October 2009. The unemployment rate is for October 2009 (following a  uggestion of Cannon and Duck (2000) to avoid Galton's fallacy). t-statistics are calculated using heteroscedasticity consistent standard errors. Weighted OLS: Least Squares Estimates with the regional number of unemployed persons in October 2009 as analytical weights. Due to limited data availability for the export shares and the share of employment in the secondary sector, the corresponding regression could be run only for 335 NUTS 3 regions. The latter two variables are 2004/2005 averages.