Unemployed in Germany: Factors Influencing the Risk of Losing the Job

Abstract

Unemployment is a central issue in modern economies and its analysis and investigation consists of two aspects. First, what is the risk of getting unemployed based on economic, local and individual characteristics and second, what is the chance of getting reemployed. In this paper we focus on the first question by making use of the massive database from the German Federal Employment Agency (IABS Scientific Use File ‘Regional File 1975 – 2004’) to model the risk of an individual to become unemployed between 2000 and 2004 in Germany. As individual covariates we include gender, age and education as fixed effects in our model. Beside these individual characteristics, regional as well as calendrical and economic information is considered and included as smooth functional effects in the model. As result of our data analysis we uncover strong educational and age specific effects as well as dominating calendrical and spatial effects on the individual's risk of getting unemployed.