Cohort size effects on wages, working status, and work time

This paper estimates the effects of cohort size on wages, employment and work time for workers in Germany. The empirical findings suggest that male workers with medium and high degrees of occupational specialization who were born at the peak of the baby boom earn at least 5.3% lower wages than comparable workers born during the subsequent baby bust. Highly specialized females born into large cohorts earn 2.5% lower wages than their counterparts from small cohorts. Employment effects are detected only for highly specialized males. The effects on work time are mixed and invariably larger when actual work time is considered rather than contractual work time. It is argued that the restrictive labor market institutions in place are key in shaping the response pattern across the different economic outcomes.