Times of change: what drives the growth of work arrangements in Germany?
© Institut für Arbeitsmarkt- und Berufsforschung 2013
Published: 26 July 2013
Since the beginning of the 1990s, the composition of work arrangements has significantly changed. Whereas non-standard work arrangements such as part-time or temporary employment grew over time, standard work lost in importance. However, data from the German Labour Force Survey does—at least for the recent past—not show a clear indication for a much greater speed with respect to changes in the composition of work arrangements. In addition, developments are also driven by a long-term trend. Shift-share-analyses suggest that shifts in the demographic or industry composition of employment were only of minor importance as a driving force for the trend. This means that factors related to the behaviour of the parties involved have obviously played a decisive role. In this context it is important that Germany is a country with regulations creating incentives for an increased use of nonstandard work arrangements. Of relevance in this context are high social security contributions, a considerable level of employment protection, a stronger activation of unemployed due to recent labour market reforms and a still dominant male bread winner model.
Zeiten des Wandels: Was treibt das Wachstum atypischer Erwerbsformen in Deutschland?
Seit Anfang der 1990er Jahre hat sich die Zusammensetzung der Erwerbsformen grundlegend verändert. Während atypische Formen der Erwerbstätigkeit, wie Teilzeitarbeit oder befristete Beschäftigung, an Bedeutung gewannen, verlor das sog. „Normalarbeitsverhältnis“ dagegen an Boden. Jedoch legen Daten des Mikrozensus nahe, dass sich das Tempo des Wandels in der jüngeren Vergangenheit nicht wesentlich beschleunigt hat. Darüber hinaus zeigt sich, dass die Entwicklungen auch von einem längerfristigen Trend getragen werden. Shift-Share-Analysen deuten allerdings daraufhin, dass die veränderte Zusammensetzung der Erwerbstätigkeit nach Sektoren und soziodemographischen Merkmalen den Wandel der Erwerbsformen nur unwesentlich getrieben haben. Das bedeutet, dass Verhaltensänderungen der Wirtschaftssubjekte eine entscheidende Rolle für die Entwicklung gespielt haben. In diesem Zusammenhang ist wichtig, dass die Regulierungen in Deutschland spezifische Anreize zu Gunsten atypischer Beschäftigung setzen. Relevant sind hier relativ hohe Sozialversicherungsbeiträge, ein ausgeprägter Kündigungsschutz, eine zuletzt verstärkte Aktivierung von Arbeitslosen und eine noch immer bestehende Vorherrschaft des sog. „Ernährermodells“.
After the reunification Germany went through difficult times concerning its economic and employment situation. Comparatively long periods of economic slack and severe labour market problems were for a long time the order of the day. Since 2005 the picture has changed significantly. The German economy went back on track. Employment increased continuously and unemployment came down tremendously. Main reasons for the improvement were an increased competitiveness of manufacturing companies, ongoing moderate wage increases, and effective labour market reforms (Möller 2010; Burda and Hunt 2011; Merkl and Wesselbaum 2011; Akyol et al. 2013). The labour market reforms imply a comprehensive institutional switch including a stringent activation of unemployed and increased labour market flexibility.
The varying labour market development in Germany during the last two decades was accompanied by an altered composition of employment (Keller and Seifert 2011; Schmid 2011). In particular, we recognize a greater spread of work arrangements (Wingerter 2012). Certain types of nonstandard work such as part-time employment, fixed-term contracts, and agency work grew over time. By contrast standard work—usually defined as a permanent full-time employment, excluding temporary work agencies—lost in importance (Osterman 2000; Houseman and Osawa 2003).
However, these changes did not only take place in Germany but also in most other OECD countries (Eichhorst et al. 2010; Allmendinger et al. 2012). A comparison to countries in the Western world shows that Germany is a special and interesting case in this respect for two reasons. First, according to OECD and CIETT figures nonstandard work arrangements are strongly represented in Germany.1 In 2011, the share of part-time employment in Germany (22.1 %) lay well above the OECD average (16.5 %). The same is true for agency workers. The particular rate for Germany in 2011 amounted to 2.0 % whereas the average for the total world (which represents mostly industrial countries) was 1.5 %. Only the share of temporary employed prime-agers (25 to 54 years) was in 2011 close to the OECD average (Germany: 10.0 %; OECD: 9.9 %).
Secondly, Germany is also of interest from an international comparison point of view because the share of nonstandard work grew faster than in most other countries of the Western World. The part-time employment rate in Germany rose by 7.9 percentage points from 1995 to 2011 compared to 4.9 percentage points of the OCED average for the corresponding period, the rate of German temporary employed prime agers by 3.5 percentage points in relation to 1.6 percentage points of the OECD average, and the rate of German agency workers by 1.5 percentage points compared to 0.8 percentage points of industrial countries.2
In view of recent developments the general question arises why nonstandard work grew over time. Most of the relevant literature mentioned a whole bunch of more or less interrelated reasons for the change (Houseman and Osawa 2003). A first explanation might be that growth in nonstandard work may reflect changes in the demographic or industry composition of employment. For example, it is argued that an increase in the labor force participation of women may explain a considerable part of the increase in part-time employment in certain countries (Gustafsson et al. 2003). In addition, a complex set of factors related to the economic and employment situation, to the level and the types of government taxes, to regulations dealing with employment protection, to competitive pressures on companies to increase workforce flexibility is seen as important for the growth of nonstandard work (Rubery 2005).
This paper will particularly deal with the changing composition of work arrangements in Germany. Its contribution lies in the examination of the main drivers of the ongoing developments. In this respect we will focus on the impact of changes in employment by industries, gender, age groups and skill levels. In addition, we will discuss how far relevant labor market institutions in Germany may have created specific incentives for using non-standard work. In this context we will have a closer look at the period following the comprehensive labor market reforms and investigate how far this may have induced a greater speed with respect to changes in the composition of work arrangements.
The paper is organized in six sections. Section two identifies potential driving forces by referring to the literature. The third section focuses on long-term trends in work arrangements in Germany. It covers developments of certain work arrangements as well as of particular categories such as standard and nonstandard work and focuses on the development during the last two decades. The analyses are mainly based on the German Labour Force Survey. Section four raises the question how far shifts in the demographic and industry composition of employment were of any importance for the ongoing changes. The results in this section are based on shift-share-analyses. The fifth section offers information about the institutional background in Germany and tries to find hints how far the regulatory framework and particularly recent reforms might be of relevance for (changes in) the behaviour of the parties involved. Finally, section six is going to summarize the main results and to draw conclusions also with respect to possible future developments.
2 Work arrangements and potential driving forces
Work arrangements can be distinguished by several characteristics (Osterman 2000; Houseman and Osawa 2003). A first differentiation can be made by separating employment into self-employed and dependent employed. The group of self-employed consists of those self-employed who employ workers (employers), one-person-businesses and related family workers. Main elements of employment relationships are the number of working hours, the level of employment security, the degree of assignment to a particular employer and how far they allow access to the social security system (Mückenberger 1985a, 1985b). (Dependent) Workers can therefore be engaged full-time or part-time, with permanent or fixed-term contracts, being directly employed or through a temporary work agency, and with unlimited or limited access to different areas of social security such as pensions, health insurance or unemployment benefits.
Often two main categories of work arrangements are formed: standard and nonstandard work (Osterman 2000; Houseman and Osawa 2003; Mückenberger 1985a, 1985b, 2010). Standard work is usually considered as working full-time in a permanent job which in addition offers full access to the social security system and implies a clear assignment to a certain employer (Rubery 2005). Consequently, deviations from this type of employment are classified as nonstandard. Empirical findings show that compared to standard workers there is a greater risk for nonstandard workers to lose employment, to be part of the low wage sector, of being excluded from additional (also fringe) benefits as well as from firm based-training (Autor 2001; Dütsch 2011; Kalleberg 2011; Mertens and McGinnity 2004; Jahn and Pozzoli 2011).
Nevertheless, if such a rather simple categorization is related to the concept of decent work there are limits. Some examples may illustrate this. In certain periods of the life course such as education or family work, part-time employment might be of particular interest for individuals because it offers an opportunity to reconcile different activities in an appropriate manner (Holler and Trischler 2010; Addabbo and Favaro 2012). Furthermore, in some cases flexible jobs may offer even more employment security than permanent jobs, e.g. if a fixed-term contract implying a certain probability of transition into permanent employed is compared with a permanent job bearing a high risk of being dismissed (Boockmann and Hagen 2008). In addition, standard work does not necessarily guarantee a decent income. Hourly wages can be rather low and therefore even full-time workers may be dependent on benefits to make their living (Dietz et al. 2009).
Nonstandard work should also not necessarily be treated equal as precarious work. The latter is usually associated with a comparatively high risk of achieving or maintaining a permanent income as a basis of an individual’s or household’s livelihood (Fudge and Owens 2006). Often cumulated risks are involved in this context such as insecure employment, low hours, poor pay and a limited access to the social security system are of relevance here too (Keller et al. 2011). Of particular importance in this respect is how far individual workers are in a precarious status or in a precarious biography and less whether a certain work arrangement can be considered as potentially precarious. Moreover, in order to assess precariousness of work a broader view is necessary. It needs to involve the individual’s household and also how far more flexible jobs offer opportunities of transition into a more decent job (Schäfer 2010; Grün et al. 2010; Dieckhoff 2011; Caliendo et al. 2012a).
The identification of potential driving forces for the changes in the composition of work arrangements would, first of all, require a convincing theoretical foundation. However, there is nothing rather comprehensive available yet. We can make use of some rudimentary fragments which may help to identify relevant issues in this context. In order to explain changes in the composition of work arrangements Neubäumer and Tretter (2008) carry out a transaction cost approach. The choice of work arrangements by the parties involved would then be dependent on the benefits of a single work arrangement for the particular party compared to other alternatives.
While using nonstandard work arrangements employers are confronted with a trade-off because they need to take into account costs and benefits of certain work arrangements (Houseman 2001; Sesselmeier 2007). Direct wages, additional costs for social security and costs of hiring and firing need to be weighed against the workers’ productivity. Nonstandard work usually has certain (cost) advantages compared to other alternatives in this respect. Firstly, it can be used to safe labour costs. This might, e.g., be the case if a firm employs agency workers which are not covered by its particular pay agreement. Secondly, nonstandard work arrangements may also lead to lower labour costs for regular workers because extra payments to regular workers for overtime might not be necessary to the same extent. Thirdly, particularly fixed-term contracts and temporary agency work reduce costs of hiring and firing. Such an option is of particular relevance in an institutional framework in which dismissal protection legislation applying to standard workers is comparatively strict. The different types of temporary employment can be used as a recruiting device and may therefore increase the efficiency of matching labour supply and demand (Osterman and Burton 2005; Boockmann and Hagen 2008). Fourthly, nonstandard work arrangements offer more flexibility to adapt available personal resources to variations in product demand (Bentolila and Saint-Paul 1992; Nunziata and Staffolani 2007; Nienhüser 2008; Picchio 2012). And finally nonstandard work arrangements can be seen as a kind of buffer to protect core workers. In doing so, firms can combine both the advantages of internal labour markets and flexible labour (Alewell 1993; Osterman and Burton 2005; Pfeifer 2009).
Another possible source of shifts in work arrangements might be changing preferences of workers. Although we can assume that for most individuals nonstandard work will not be their first choice, one can imagine situations in the course of life in which preferences might switch to a more flexible type of employment. Workers may have an (increasing) interest to combine work with other activities such as education and training, family work or with periods of inactivity such as retirement (Addabbo and Solinas 2012; Bratti and Staffolani 2012). Also risk preferences may change over time. Sometimes a fixed-term contract with a well known employer might be recognized as a kind of stepping stone for a successful working career. The same may be true for unemployed for whom flexible employment may offer an easier access to the labour market (Hagen 2003).
A peculiarity of the labour market is that preferences of employers and workers may not always go in line. Therefore, the interaction between the parties involved is another potential driving force for changes in the composition of work arrangements. An important issue in this respect is the relative market power of the parties involved (Houseman and Osawa 2003). Of relevance in this context is how far there is a surplus of applicants related to the available jobs in a certain labour market segment or vice versa. Periods of economic slack and high unemployment can therefore push nonstandard work at the expense of standard work. During such periods of excess supply at the labour market, employers can more easily enforce nonstandard work arrangements.
Another important driver of changes in the composition of work arrangements may be the institutional framework. It defines the scope of opportunities for firms and workers. Regulatory changes with respect to certain types of work arrangements influence their attractiveness in absolute terms as well as in relation to other work arrangements. For example, a strict dismissal protection may favor nonstandard work such as fixed-term contracts because it may cause an incentive to circumvent permanent jobs (Kahn 2010; Dieckhoff and Steiber 2012; Garz 2012, 2013). The same is true if social security contributions for specific types of dependent employment are high. Such non-wage labour costs can be seen as a push factor for nonstandard types of work which are not fully or not at all covered by social security such as self-employment (Osterman and Burton 2005). Direct incentives towards nonstandard work may, in addition, stem from a deregulation aiming at a more intensive use of nonstandard work arrangements or from labour market policies providing and pushing low-level gateways into the labour market.
Finally, a changing composition of work arrangements may also take place without any changes in worker’s and employer’s preferences, without any variations of market power between the parties involved and without any institutional reforms. This can be the case if employment grows in particular segments of the labour market and nonstandard work can be found in these segments more or less often. Of relevance in this context are changes in the composition of employment such as a higher participation of female workers, the continuous aging of the workforce, an increase in the demand of skilled workers and the growth of employment in services. The importance of such changes as a potential driver of changes in the composition of work arrangements can be investigated by the use of shift-share-analyses (see for more details Sect. 4).
3 Long-term trends in work arrangements
Firstly, a specific type of part-time employment, the so-called “marginal” part-time employment, has been and is still under-reported in the German Labour Force Survey. This is particularly true in the 1990s and less in the first decade of the 21st century. The peculiarities of “marginal” part-time employment in the German case are twofold. On the one hand, there is a certain tax-free wage threshold which was fixed during the period 2003 to 2012 at 400 Euros. On the other hand, although employers have to pay a flat rate to the social security system, “marginal” part-time workers earning a wage below this threshold will not necessarily receive benefits from the social security system. During the two decades under investigation concepts of recording “marginal” part-time employment in the German Labour Force Survey were changed which need to be taken into account while interpreting the trends (Körner 2011).
Secondly, agency work is for most of the period under investigation (1991 to 2005) not covered by the German Labour Force Survey at all. Therefore, data from a particular agency survey provided by the Federal Employment Agency (Bundesagentur für Arbeit) is incorporated in the analyses. The latter does offer a time series from 1991 to 2011 for total numbers of agency workers as well as decompositions by gender, age and skill level. Because agencies and not their users are covered in the survey the data source does not give any information about the industry distribution of agency workers. At least for the recent past the data offer information about the share of part-timers amongst agency workers. However, this is not the case for the period 1991 to 1996. The particular share during this time has therefore been estimated by a fixed percentage of 2 %. Finally, there is no information available about the share of agency workers employed on a fixed-term basis. Because of this, representatives of the agency industry were asked and provided rough estimates about the share of agency workers with a temporary contract. On the basis of this information, the share has been fixed by one quarter for the period 1991 to 2003 and one third for the period since 2004.
The German Labour Force Survey offers the opportunity to categorize work arrangements. Using this data we can define and distinguish three main types: standard work arrangements, nonstandard work arrangements and specific work arrangements (see for more information Table 2 in the Appendix).
Just as standard work arrangements also specific work arrangements decline during the last two decades. The reduction amounted to 0.43 million or 16.5 %. Most of the decrease concerning this category of work arrangements refers to the second decade. This is mainly due to a decline of related family workers particularly in agriculture and a reduction in military and alternative services. By contrast, the number of apprentices kept rather constant over time.
4 Shifts in employment and their Impact
As mentioned above one possible reason for a long-term trend towards nonstandard work may be considerable changes in the composition of employment. Of relevance in this context are a higher participation of female workers, the continuous aging of the workforce, an increasing demand of skilled workers, and a stronger role of employment in services (Rubery 2005; Holman and McClelland 2011).3
First of all, we will look at the incidence of work arrangements by different characteristics. Then we will carry out shift-share-analyses in order to assess the role of a changing composition of employment for the development of work arrangements.
4.1 Work arrangements by different characteristics
Concerning the distribution of certain types of nonstandard work arrangements by industries we observe that marginal part-time employment, regular part-employment (less than 32 hours a week) and fixed-term contracts (>31 hours a week) are strongly represented in services. In agriculture (primary sector) self-employed and family workers play an important role. Whereas the German Labour Force Survey does not give any information about the industry distribution of agency work, the IAB establishment panel suggests a strong incidence of this type of employment in production, particularly in manufacturing (Crimmann et al. 2009).
4.2 Demographic and industry shifts as a possible driver for changes in the composition of work arrangements
The question is now, how far the described changes in the composition of employment may have influenced the growth of nonstandard work arrangements. To deal with this, shift-share analyses are carried out providing the opportunity to decompose trends in employment (Perloff et al. 1960; Hoffmann and Walwei 2003). They can be used in order to explore how far changes in the composition of employment or behavioural aspects have driven the development of work arrangements. Such an approach is promising because also multivariate analyses dealing with a decomposition of trends in work arrangements confirm previous findings of descriptive shift-share analyses (Klinger and Wolf 2011).
Decomposition of trends in work arrangements by demographic and industry characteristics Shift-share analyses 1991–2011; shift, share and interaction terms in percent of the total change (percent of total change in brackets)
Work arrangements by industries
Work arrangements by gender
Work arrangements by age groups
Work arrangements by skill levels
Nonstandard work arrangementsa
Part-time workersb (32 hours and less)
“Marginal” part-time workers
Fixed-term contractsc (>31 hours a week)
Agency workd , e (>31 hours a week)
Shift-share analyses were also carried out to assess the effect of changes in the gender composition of employment on the increase in certain types of nonstandard work arrangements. The question here is whether growth in nonstandard work arrangements goes along with changes in the female proportion of total employment (shift effect) or more from the changing rates of nonstandard work arrangements amongst both sexes (share effect). However, the results of these analyses indicate that it is again the share effect that can mainly be associated with the growth of nonstandard work arrangements (Table 1). This means that, if the female proportion of employment had remained unchanged over time, nonstandard work arrangements would have developed as it did to almost at the same extent. Thus, a changing propensity to be employed in a nonstandard work arrangement is associated with most of the increase in certain types of work. Nevertheless, shift effects at least play a role in one respect. Concerning the increase in regular part-time employment (less than 32 hours during a week) the analyses show a considerable, but minor impact of the increase female labour market participation: At least a fourth of the total increase of this work arrangement can be associated with a changing composition of employment towards females.
The shift-share-analyses dealing with the age and skill distribution of employment do not tell a completely different story. Shift effects are again in most cases rather small or even negative. This means that aging and rising skill levels in employment are obviously not main drivers of the changing composition of work arrangements. Nevertheless, three interesting findings should be mentioned (see Table 1). Firstly, aging obviously pushes at least to some extent the share of self-employed, particularly one-person-businesses. Secondly, aging is negatively associated with fixed-term contracts. This means that a working population which is getting older may potentially reduce the incidence of fixed-term contracts. Such temporary employment relationships may be needed less because fewer young people are entering the labour market for the first time. Thirdly, the rise in skill levels is positively associated with fixed-term contracts indicating that this type of employment is important for entering the labour market. However, there are findings that particularly for skilled workers (academics and apprentices) the probability of remaining in a fixed-term contract is diminishing significantly over time (Achatz et al. 2012).
The results of shift-share-analyses carried out suggest that nonstandard work arrangements have developed largely independently of shifts in the demographic and industry composition of employment. Thus, even without the increases in services, in women’s labour market participation, in aging and in skill levels, the trend of nonstandard work arrangements would have evolved roughly as it did. It is mainly increased rates of nonstandard work arrangements within certain industries and within demographic groups of the workforce that have driven the increased rates of nonstandard work arrangements. There are only few exemptions which indicate that shift effects have played an important role (industry change with respect to part-time employment) or at least a certain role (female labour market participation with respect to part-time employment; aging with respect to one-person businesses and with respect to fixed-term contracts; rise in skill levels with respect to fixed-term contracts).
5 The role of German institutions with respect to changes in the composition of work arrangements
In section three we identified significant changes in the composition of work arrangements which were to a considerable extent part of a long-term trend. The previous section shows that the role of shifts in the industry or demographic composition of employment as a driver for such changes should not be overestimated. Moreover, the results of the analyses suggest that changes in employers’ and/or employees’ behaviour were obviously of significant importance for the growth of nonstandard work arrangements.
In general, the opportunities of firms and workers depend to a large extent on the institutional setting and its development over time (Rubery 2005). In the following a brief overview about relevant institutions in Germany and their changes over time will be given. It will be discussed whether the German institutional regime may have created incentives towards the use of nonstandard work arrangements.
In addition, labour market policy in a more narrow sense is of interest in this context, particularly regarding the frequency and composition of labour market programs as well as the design of benefit regulations in case of unemployment. Labour market programs may be relevant for the spread of non-standard work arrangements because they potentially ease the access to the labour market. Examples are programs fostering public employment which imply fixed-term contracts for those involved or programs particularly supporting unemployed to start up a business. Germany always made frequent use of these types of programs and spent comparatively large financial resources in those areas (OECD 2012). Of particular importance here is that during the first decade after the millennium programs to foster self-employment like Me Inc. played an enormous role in quantitative terms (Caliendo et al. 2012b). They pushed one-person-businesses to a considerable extent. In addition, labour market reforms (the so-called “Hartz reforms”) significantly changed the benefit system. This has lead to lower benefits for long-term unemployed as well as a stronger focus on activation which both push workers even more to take up any kind of employment, including nonstandard work.
Parts of the change in the composition of work arrangements can also be associated with the consequences of reunification. In the early 1990s non-standard work arrangements were not so largely distributed in Eastern Germany compared to Western Germany (Hoffmann and Walwei 2003). Due to the economic transformation the Eastern part of Germany also caught up in this respect. All types of non-standard work arrangements grew faster in Eastern Germany than in Western Germany. However, the level of regular part-time employment (excl. marginal employment) is still lower in the East compared to the West (Wanger 2011). This indicates that particularly womens’ attitudes regarding working hours still differ between the two parts of Germany (Vogel 2009; Rainer and Bauernschuster 2010).
The changes in the composition of work arrangements suggest a rather stable long-term trend towards non-standard work arrangement (see Sect. 3). In general, there is no clear evidence that growth in nonstandard work has fastened recently. A possible reason for a greater speed of changes could, e.g., have been induced by comprehensive rearrangements of the institutional setting. At the beginning of the first decade after the Millennium Germany implemented such a far reaching labour market reform (“Hartz-reforms”). However, there is no obvious hint that the comprehensive reform had generally pushed the overall change in the composition of nonstandard work arrangements further. Nevertheless, there are obviously two exemptions. Evidence indicates that particularly agency work and marginal part-time employment increased sharply during the first years after reform. This increase may at least partly be related to legal changes (Antoni and Jahn 2006; Fertig and Kluve 2006; Burda and Kvasnicka 2006; Jacobi and Schaffner 2008; Garz 2012, 2013). However, after these immediate effects of the reform on certain work arrangements the speed of its growth decreased or even found an end. One explanation for this might be that additional (institutional) incentives were partly or even fully compensated by an improvement of the overall labour market situation implying a rebalancing of market power and limits of growth.
Although German institutions create certain incentives to use nonstandard work arrangements, possible behavioural changes of the parties involved also need to be taken into account. It may be argued that possible advantages of nonstandard work arrangements may have got a stronger weight over time (Neubäumer and Tretter 2008). This means, that companies’ needs with respect to a more flexible use of staff and cost reductions for labour referring to all industries might be of more relevance in the recent past than they had been two decades ago. In addition, we also observe significant changes in the composition of labour supply. New groups of workers are participating in the labour market such as students and pensioners who—through nonstandard work arrangements—did find an easier access to the labour market.
Since the beginning of the 1990s, the composition of work arrangements has significantly changed. On the one hand, standard work arrangements lost in importance in relative and absolute terms. On the other hand, nonstandard work arrangements grew over time. The latter are particularly represented amongst less qualified and young workers, women and within the service sector. Analyses based on the German Labour Force Survey show an almost continuous upward trend of nonstandard work arrangements.
The main finding of this paper is that the impacts of changes in the composition of employment should not be overestimated as possible drivers for the growth in nonstandard work arrangements. Shift-share analyses suggest that most of the development would also have taken place without any structural shifts in employment. This means, that changes within certain industries or demographic groups of the workforce were of greater importance than between them. In this context it is important that Germany can be seen as a country with regulations that create incentives for the use of non-standard work arrangements. Of relevance here are the comparatively high level of social security contributions, the rather strict employment protection legislation, the recently quite strong activation of unemployed, and the still dominant male bread winner model. The findings imply that a mix of factors such as the institutional framework, the relative market power of the parties involved, as well as changes in behaviour of employers and workers obviously played a decisive role for the long-term trend. One task for future research will therefore be to disentangle the mix of institutions on the one hand and the role of market forces on the other hand.
The comprehensive labour market reforms (“Hartz-reforms”) at the beginning of the first decade after the Millennium obviously had not generally pushed the change in the composition of nonstandard work arrangements further. For this reason institutional changes should also not be overestimated as a potential driving force. Nevertheless, there are obviously two exemptions where we did observe temporary effects. Immediately after implementing the new legislation in 2003, agency work and marginal part-time employment increased sharply which can be mainly related to the institutional changes. However, after these immediate effects of the reform the speed of growth decreased or came to an end. One explanation might be that the additional (institutional) incentives were partly or even fully compensated by an improvement of the overall labour market situation implying a rebalancing of market power and limits of growth.
Finally, two rather difficult questions remain. The first one deals with the overall assessment of the changes. In this respect the heterogeneity of nonstandard work arrangements forbids an unambiguous statement. The problem here is that we do have to find an answer to the question what would have happened if such changes in work arrangements did not take place. In this respect research offers only preliminary and mixed results. On the one hand, there is evidence for Germany that nonstandard work arrangements such as agency work or “marginal” part-time employment have created an easier access to the labour market (Lehmer 2012). On the other hand, research also shows that transitions from nonstandard work to standard work are visible, but they are rather small (Steiner 2008; Jahn and Pozzoli 2011; Caliendo et al. 2012a; Gebel 2013). This may have to do with two facts. Firstly, workers may not intend to switch to a standard job (e.g. in the case of combining employment with family work or education). Secondly, they may not be able to find a better job due to their lacking skills and are, therefore, a continuous part of revolving doors between unemployment and nonstandard work (Sala et al. 2012).
The second question deals with the possible future development of work arrangements. Developments are not at all determined which is due to the various factors which may possibly drive the change. Such determinants do not only include further institutional reforms, e.g. regarding the role of the male bread winner model, but also ongoing changes in the relative market power of the parties involved. Due to the improved labour market performance in Germany in recent years firms are increasingly confronted with a higher competition regarding highly educated youngsters and, in general, highly skilled workers. This may strengthen the role of standard work arrangements in the long run for these groups of workers (if they indeed prefer this type of employment). However, for less competitive workers nonstandard work arrangements may also in future often function as a kind of gateway to the labour market. Of importance here is how far those workers are more or less locked in or can make use of upward mobility through transition from a less to a more secure job and thereby achieve a rise in their wages. In this respect efforts to strengthen the employability of flexible workers such as incentives towards more training-on-the-job accompanied by an intensified job search are crucial issues to improve the labour market situation of less competitive workers.
After reunification Germany went through difficult times concerning its economic and employment situation. Comparatively long periods of economic slack and severe labour market problems were for a long time the order of the day. Since 2005 the picture has changed significantly. The German economy went back on track. Employment increased continuously and unemployment came down tremendously. However, the labour market development in Germany during the last two decades was accompanied by a greater spread of work arrangements. Certain types of nonstandard work such as part-time employment, fixed-term contracts, and agency work grew over time. By contrast standard work—usually defined as a permanent full-time employment, excluding temporary work agencies—lost in importance.
A comparison to countries in the Western world shows that Germany is an interesting case in this respect for two reasons. First, according to internationally available data nonstandard work arrangements are strongly represented in Germany. Secondly, Germany is also of interest because the share of nonstandard work grew faster than in most other countries of the Western World.
In view of recent developments the general question arises why nonstandard work grew so fast over time in Germany. The contribution of the paper lies in the examination of the main drivers of the ongoing developments. In this respect it focuses on the impact of changes in employment by industries, gender, age groups and skill levels. In addition, the paper discusses how far relevant labor market institutions in Germany may have created incentives for using non-standard work. In this context we will have a closer look at the period following the comprehensive labor market reforms and investigate how far this may have induced a greater speed with respect to changes in the composition of work arrangements.
The main finding of this paper is that the impacts of changes in the composition of employment should not be overestimated as possible drivers for the growth in nonstandard work arrangements. Shift-share analyses do suggest that most of the development would also have taken place without any structural shifts in employment. This means, that changes within certain industries or demographic groups of the workforce were of greater importance than between them. Moreover, factors related to the behaviour of the parties involved have obviously played a decisive role. In this context it is important that Germany can be seen as a country with regulations that create incentives for the use of non-standard work arrangements. Of relevance here are the comparatively high level of social security contributions, the rather strict employment protection legislation, the recently quite strong activation of unemployed, and the still dominant male bread winner model.
The comprehensive labour market reforms (“Hartz-reforms”) at the beginning of the first decade after the Millennium obviously had not generally pushed the changes in the composition of nonstandard work arrangements further. Data from the German Labour Force Survey does—at least for the recent past—not show a clear indication for a much greater speed with respect to changes in the composition of work arrangements. For this reason institutional changes should also not be overestimated as a potential driving force. Nevertheless, there are obviously two exemptions where we did observe temporary effects. Immediately after implementing the new legislation in 2003, agency work and marginal part-time employment increased sharply which can be mainly related to institutional changes. However, after these immediate effects of the reform the speed of growth decreased or came to an end. One explanation might be that the additional (institutional) incentives were partly or even fully compensated by an improvement of the overall labour market situation implying a rebalancing of market power and limits of growth.
Future developments of work arrangements are not at all determined which is due to the various factors which may possibly drive the change. Such determinants do not only include further institutional reforms, e.g. regarding the role of the male bread winner model, but also ongoing changes in the relative market power of the parties involved. Due to the improved labour market performance in Germany in recent years firms are increasingly confronted with a higher competition regarding highly educated youngsters and, in general, highly skilled workers. This may strengthen the role of standard work arrangements in the long run for these groups of workers.
Nach der Wiedervereinigung durchlief Deutschland eine schwierige Phase mit Blick auf die Entwicklung von Wirtschaft und Arbeitsmarkt. Schwaches Wirtschaftswachstum und eine ungünstige Beschäftigungsentwicklung prägten lange Zeit das politische Tagesgeschäft. Seit 2005 änderte sich das Bild substanziell. Die Wirtschaft kam wieder in Fahrt, die Erwerbstätigkeit stieg kontinuierlich und die Arbeitslosigkeit sank Zug um Zug. In den letzten beiden Dekaden zeigte sich jedoch daneben auch ein Wandel der Erwerbsformen. Atypische Erwerbsformen wie Teilzeitbeschäftigung, befristete Beschäftigung oder auch Leiharbeit gewannen an Bedeutung. Im Gegensatz dazu verlor das sog. „Normalarbeitsverhältnis“ – definiert als unbefristetes Dauerbeschäftigungsverhältnis außerhalb der Zeitarbeitsbranche – an Boden.
Der Vergleich zu anderen Ländern in der westlichen Welt zeigt, dass Deutschland diesbezüglich in zweifacher Hinsicht ein interessanter Fall ist. Erstens weisen international verfügbare Daten aus, dass in Deutschland atypische Erwerbsformen vergleichsweise stark vertreten sind. Zweitens ist Deutschland auch deshalb von Interesse, weil atypische Erwerbsformen dort kräftiger gewachsen sind als in den meisten anderen Ländern der westlichen Welt.
Angesichts der jüngeren Entwicklungen stellt sich jedoch generell die Frage, was hinter dem kräftigen Wachstum atypischer Erwerbsformen in Deutschland stehen könnte. Der Beitrag dieser Studie liegt in der Analyse der wesentlichen Treiber der beobachteten Entwicklungen. Insbesondere wird dabei den Effekten von strukturellen Veränderungen in der Zusammensetzung der Erwerbstätigkeit nach Sektoren, Geschlecht, Alter und formaler Qualifikation auf den Wandel der Erwerbsformen nachgegangen. Zusätzlich wird diskutiert, inwieweit deutsche Arbeitsmarktinstitutionen spezifische Anreize zur Nutzung atypischer Erwerbsformen gesetzt haben könnten. In diesem Kontext wird auch die Phase nach dem umfassenden Arbeitsmarktreformen ins Blickfeld genommen und danach gefragt, ob sich seitdem das Tempo des Wandels der Erwerbsformen entscheidend beschleunigt hat.
Das wesentliche Ergebnis der Studie besteht darin, dass die Effekte einer veränderten Zusammensetzung der Erwerbstätigkeit mit Blick auf den Wandel atypischer Erwerbsformen nicht überschätzt werden dürfen. Shift-Share-Analysen legen nahe, dass sich der Großteil der Veränderungen auch dann eingestellt hätte, wenn die strukturelle Zusammensetzung der Erwerbstätigkeit nach Sektoren und demographischen Gruppen konstant geblieben wäre. Das heißt, dass Veränderungen in bestimmten Sektoren oder innerhalb bestimmter demographischer Gruppen wichtiger waren als zwischen diesen. Faktoren, die sich auf das Verhalten der Wirtschaftssubjekte beziehen, spielten deshalb offenbar eine entscheidende Rolle. In diesem Zusammenhang ist es von Bedeutung, dass Deutschland ein Land ist, das durch seine Arbeitsmarktregulierungen Anreize zur Nutzung atypischer Erwerbsformen setzt. Von Bedeutung sind hier die hohen Sozialversicherungsbeiträge, ein relativ strikter Kündigungsschutz, die zuletzt stärkere Aktivierung von Arbeitslosen und die noch immer starke Dominanz des „Ernährermodells“.
Die umfassenden Arbeitsmarktreformen („Hartz-Reformen“) zu Beginn der letzten Dekade haben aber offenkundig nicht zu einer massiven und allgemeinen Beschleunigung des Wachstums atypischer Erwerbsformen geführt, wie aus Daten des Mikrozensus hervorgeht. Aus diesem Grund darf die Rolle institutioneller Regelungen als Treiber des Wandels der Erwerbsformen auch nicht überschätzt werden. Gleichwohl finden sich zwei Ausnahmen. Denn sowohl die geringfügige Beschäftigung als auch die Zeitarbeit legten unmittelbar nach entsprechenden Gesetzesänderungen im Zuge der Arbeitsmarktreformen in den Jahren ab 2003 zunächst kräftig zu. Nach diesen Einführungseffekten stellte sich aber eine Verlangsamung des Wachstums und in Teilen sogar Stagnation hinsichtlich beider Beschäftigungsformen ein. Eine Erklärung hierfür könnte sein, dass die institutionellen Effekte ganz oder teilweise durch Marktkräfte kompensiert wurden. Denn die verbesserte Beschäftigungssituation hat auch in einem gewissen Umfang zur Neujustierung der Marktmacht zwischen den Wirtschaftssubjekten geführt.
Zukünftige Entwicklungen der Erwerbsformen sind deshalb keinesfalls determiniert, vor allem weil unterschiedlichste Faktoren wirksam werden können. Dabei ist nicht nur an institutionelle Änderungen wie der abnehmenden Bedeutung des Alleinernährermodells zu denken, sondern auch an weitere Veränderungen der Marktmacht. Aufgrund der verbesserten Beschäftigungssituation in den letzten Jahren wurden Betriebe in den letzten Jahren immer häufiger mit einem wachsenden Wettbewerb um junge und qualifizierte Fachkräfte konfrontiert. Verstärkt durch den demographischen Wandel, speziell kleiner werdender junger Kohorten, könnten Knappheitssituationen dazu führen, dass das “Normalarbeitsverhältnis” zumindest für diese Gruppen wieder an Bedeutung gewinnt.
The increase concerning temporary agency workers covers the period 1996 to 2011.
In addition, also occupational groups differ with regard to the incidence of non-standard employment (see for more details: Marx 2011).
The Employment Protection Legislation Index (EPL) covers three areas: (1) Employment protection of regular workers against dismissal; (2) Specific requirements for collective dismissals; (3) Regulation of temporary forms of employment. In sum, 18 basic items are then generated from these areas and converted into cardinal scores that are normalized to a certain range, with higher scores representing stricter regulation.
The author thanks anonymous referees for valuable comments and Pia Klotz, Dominika Swoboda und particularly Carina Himsel for technical assistance.
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