The next section addresses which firm and regional factors influence the opportunities and risks in employment careers in the two different cyclical phases by estimating three-level logistic random intercept models with explanatory variables. Although all of the explanatory variables are reported, we interpret only those that are relevant for testing the hypotheses. Results show that it is actually those workers positioned ahead of a large age cohort who are most likely to leave their firm.
Footnote 7 This is in line with Hypothesis 1. Furthermore, employees are at greater risk of finding themselves unemployed or having their promotional prospects restricted when they change firm. This finding contradicts the lateral or upward interfirm job changes predicted in Hypothesis 2.
In case of job exits, transitions into another employment seem to be difficult. Due to the demographic structure, we conclude that blocked promotion opportunities raise the probability of leaving a firm and, furthermore, destabilize employment trajectories. Moreover, it has been argued that career progression prospects and employment options vary according to firm size. Results indicate that the larger the firm, the lower the rate of exits. This was especially apparent in the comparatively low unemployment risks during the cyclical decline in Footnote 8 Thus, Hypothesis 3 cannot be rejected.
These findings confirm that larger firms are able to strengthen the closure of their employment systems from the external job market Struck Regarding changes from large firms during the period of economic upswing in , lateral transitions between firms are particularly prominent. Those employees who change employment in the economic downturn seem restricted in their ability to increase income. Therefore, Hypothesis 4 that job exits occur mostly voluntarily and lead more frequently to lateral or even upward mobility can be confirmed only in the case of a cyclical upswing.
Turning to atypical employment, we examined the significance of fixed-term contracts Footnote 9 and found that job stability declines according to the level of fixed-term employment within the firm—independent of the economic environment. In addition, unemployment risks increase after exiting a firm. This is in line with Hypothesis 5.
Risks are reduced only during the cyclical periods of growth when employees can take advantage of lateral interfirm changes. To summarize, firms using a high share of fixed-term employment arrangements offer disadvantageous opportunity structures, because they increase risks in the employment trajectory see also Grotheer et al. Hypothesis 6 assumed that firms providing further training would offer more stable jobs. This is indeed supported by our results, because employment stability is higher during cyclical up- and downswings in firms that invest in further training.
Furthermore and in line with Hypothesis 7, employees who leave a firm providing further training face a comparatively low risk of unemployment and are exposed to less lateral mobility or decline. Firms with state-of-the-art technology and equipment offer high job stability during periods of growth; however, they cannot retain their employees during an economic slowdown.
Therefore, Hypothesis 8 holds only during an economic upswing.
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Employees exiting a modern firm are comparatively well protected from downward interfirm mobility as well as from unemployment during a cyclical upswing; during an economic slowdown, they profit from lower unemployment risks. In the case of transitions between firms, they manage to maintain or even improve their income.
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Thus, Hypothesis 9 is especially supported in times of an economic downturn. Hypothesis 10 stated that work councils and employee representatives ensure the closure of internal employment systems and thereby increase employment stability. According to our analysis, a stabilizing effect of work councils can be observed only in a period of economic growth. During decline, personnel layoffs are still implemented even when these worker representation institutions are present.
These results replicate recent studies on mobility identifying a stabilizing effect of work councils and employee representation Boockmann and Steffes , ; Grotheer et al. However, if the cyclical economic phases are modeled explicitly, it seems that internal closure is impossible during a cyclical downturn. This section examines how far region-specific factors correlate with employment trajectories.
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Hypothesis 11 predicts that employees who work in core areas will benefit from agglomeration advantages in terms of high job stability. This is particularly true for densely populated agglomerations in times of a cyclical upswing. In agglomerations with outstanding centers, in urbanized areas of higher density, and in urbanized areas of medium density and large regional centers, however, interfirm promotions as well as lateral changes can be realized more regularly. This confirms Hypothesis During an economic downturn, support is found for Hypothesis 13, because in rural areas of lower population density, higher job instability is often accompanied by a greater risk of unemployment.
Our findings indicate—as stated by Fassmann and Meusburger —that urbanized areas offer more and better options for employment; in contrast, rural areas are exposed to increased unemployment risks, especially during the cyclical periods of economic decline. To determine the significance of the local accumulation of human capital for employment trajectories, we use regional demographic data on the share of students.
Because these findings do not indicate whether or not to reject Hypothesis 14, we carried out a cross-level comparison between each of the identified qualification groups and the regional accumulation of human capital. The same applies to those employees who have successfully completed advanced secondary education and vocational training. In contrast, those employees who have completed secondary school and vocational training have more stable employment when the local level of human capital is higher.
This finding also transfers to more highly qualified employees: They are more likely to avail of the external job market for upward mobility and are in little danger of downward mobility or unemployment. This confirms Hypothesis 14, because all qualification groups benefit from a higher regional level of human capital—as reported by Blien and Wolf and by Farhauer and Granato In comparison, during a downturn, employees with no vocational training are employed comparatively insecurely despite the higher local level of human capital and are also at a higher risk of downward mobility.
In an economic decline, only those employees with a secondary school and vocational training certificate profit from the higher stock of human capital to achieve interfirm promotions. This also applies to highly qualified workers who are in stable employment. The findings are in line with Hypothesis 15 and other studies Gerlach et al. Thus, during a downturn, skill segregation exerts an unfavorable effect on low skilled employees.
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By focusing in greater detail on structural effects this article extends current research on individual determinants of employment trajectories. Because employees act within specific contexts Coleman , this study has paid particular attention to exploring how firm characteristics and regional determinants impact on employment trajectories. It has also related these trajectories to periods of both economic growth and decline.
To date, such a comprehensive survey could not be undertaken due to the lack of an adequate dataset and very long computation times. Regional indicators were investigated in each of the 97 spatial planning regions. The data analysis was carried out in three steps. First, the frequency of exits from a firm and the consequences of these exits were explored descriptively during both a period of economic growth in and a period of economic decline in Second, the decisive factors influencing employment stability were identified and analyzed with multilevel models that permit a hierarchical clustering of the data.
Third, the determinants of interfirm upward, downward, and lateral mobility as well as transitions into unemployment were considered. Moreover, the identified exit states suggested a procyclical mobility of employment as well as a procyclical development of wages. Thus, more interfirm promotions could be achieved during the period of economic growth than during the economic downturn. In contrast, fewer workers moved into a period of nonemployment during an economic upswing than during a decline.
This information served as a backdrop for examining the significance of firm characteristics and region-specific factors. Looking at firm-specific determinants , firm demographics correlated with processes of mobility. Thus, closed promotion opportunities destabilize employment trajectories for a part of the labor force. The multiple and diverse employment opportunities for career progression in larger firms revealed that they have more of a closed employment system. Furthermore, firms making a stronger use of fixed-term employment had very unfavorable opportunity structures, because this practice increased employment instability and the risk of unemployment.
Accordingly, firms that invest in further training or their infrastructure not only improve employment opportunities but also create the conditions for interfirm mobility processes due to the positive signaling effect ascribed to their employees. Especially in a positive economic environment, work councils and employee representation increase employment stability.
However, during a turn for the worse in the economy, work councils are unable to prevent dismissals. Concerning region-specific characteristics , we analyzed the association between different settlement structures and diverse mobility patterns. Especially in periods of economic growth, more densely populated areas offer more and better employment opportunities.
During periods of economic decline, in contrast, employees in rural areas face a greater risk of unemployment. Hence, the unequal employment opportunities in differently structured regions suggest a regional segmentation of the job market. Concerning the local accumulation of human capital, we found only a marginal influence on employment trajectories. It was only during an economic downturn that employees profited from a higher regional level of human capital, because transitions between firms became more frequent. A differentiation of the effect of the local level of human capital according to qualification groups revealed a two-sided story depending on the state of the economic cycle.
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All skill groups profit from a higher level of human capital during an economic upturn, whereas skill segregation is more apparent during a downturn. In summary, it could be shown that employees can minimize the significant impact of individual determinants and endogenous causalities on employment careers Blossfeld ; Hillmert et al. Therefore firm characteristics and region-specific factors as well as economic conditions play an important role in career mobility patterns.
This finding gains further significance particularly in light of the following three developments: First, in recent years, market volatility due to processes of economic globalization and transnationalization has been leading to ever shortening economic cycles.