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European Sociological Review Advance Access published online on August 2, 2005
European Sociological Review, doi:10.1093/esr/jci033
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© The Author 2005. Published by Oxford University Press. All rights reserved. For permissions, please e-mail: journals.permissions@oupjournals.org

Article

Crowding-out of Unskilled Workers in the Business Cycle: Evidence from West Germany

Matthias Pollmann-Schult 1*

1 University of Bielefeld, Department of Sociology, Postfach 10 01 31, D-33501 Bielefeld, Germany

* To whom correspondence should be addressed.
Matthias Pollmann-Schult, E-mail: matthias.pollmann-schult{at}uni-bielefeld.de


  Abstract

The paper addresses the question of if and how processes of cyclical crowding-out contribute to the disproportionate increase in unemployment of the less-educated during recessions. To this end, transitions from unemployment to low-skilled jobs and vice versa are analysed using data from the German Socio-Economic Panel (GSOEP). It is found that skilled workers increasingly occupy low-skilled jobs during recessions and thus diminish employment chances of unskilled persons. Specifically, the analyses show evidence for crowding-out at the worker inflow: during recessions, the chances of securing a low-skilled job deteriorate to a greater extent for unskilled people than for the skilled, suggesting that in times of poor employment prospects, job-competition between unskilled and skilled people for low-skilled jobs increases. However, the analysis does not show evidence for crowding-out at the worker outflow.


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