1. Panel Analysis of NPOs in Germany Design and Preliminary Results Lutz Bellmann Christian Hohendanner André Pahnke Third International Conference on Establishment Surveys Montréal 6/18/2007 – 6/21/2007

2. 2 Panel Analysis of NPOs in Germany Design and Preliminary Results 1. Introduction 2. The IAB Establishment Panel 3. The German Linked-Employer-Employee Dataset 4. Identification of the Third Sector in the IAB Establishment Panel 5. Preliminary Results: Labour demand in nonprofit establishments

3. 3 since 1993: West Germany since 1996: East Germany The IAB-Establishment Panel

4. 4 East Germany West Germany Number of interviewed establishments

5. 5 Population  Employment Register of the Federal Employment Agency  Employees are registered for the employment statistics together with an establishment code (mandatory reporting) (coverage: 80% of total employment)  All establishments with at least one employee covered by the social security system  not covered by the Social Security System: civil servants, unpaid family workers, self-employed and marginal employment

6. 6 The IAB-Establishment Panel  ~16.000 establishments: 1% of all plants, 9% of total employment  all branches, all sizes  stratified sample of 17 branches and 10 sizes of establishments  Disproportionate sample: larger establishments are overrepresented  face-to-face interviews  about 80 questions (annual, modular and “hot topics”)

7. 7 Annual Questions  Development of employment  Structure of the workforce  Vocational training  Investment  Remuneration  Working hours  Industrial relations (wage agreements, work council) etc.

8. 8 Modular Questions (every two or three years)  Innovation  Organisational change  Public subsidies  Further Training  Adjustment strategies (internal/external flexibility)  Recruitment strategies (e.g. contact with the Federal Employment Agency)

9. 9 IAB-Establishment Panel Employment Statistics  size and structure of workforce and anticipated changes  hiresandseparations  turnover  businesspolicy incl.innovations and organisational changes  working and operating hours  apprenticeships / training  further training  public subsidies  gender  date ofbirth  occupation  qualification  earnings  industry  region Establishment Code IAB Linked-Employer-Employee Panel (LIAB)

10. 10 NPOs in the IAB Establishment Panel Originally not solely created to analyze nonprofit organizations  no specific questions on npo‘s  no information about voluntary workers, donation  not covered: small associations with solely voluntary workers, establishments without employees covered by social security

11. 11 Identification of Nonprofit Establishments  growing importance of the sector  IAB decided to select nonprofit organizations for further research  a part of the establishments can be found in the sector category “not for- profit organizations”  some nonprofit establishments are registered in other sectors (health, social work, culture etc.)  The selection procedure was done by TNS Infratest Social Research

12. 12 Identification of Nonprofit Establishments Definition of nonprofit establishments  neither part of the private economy nor part of the public sector  not oriented towards gaining profits Relevant information in the IAB-Establishment-Panel  legal status, ownership, profit situation, sector; no information about voluntary donation, voluntary workers

13. 13 Selection Procedure (by TNS Infratest Social Research) 1.Preselection of potential establishments based on the following information  sector: education, health and social work, culture, sports and entertainment, non-profit organizations  legal status: associations, charitable foundations, foundations under public law  ownership, profit situation 2.Manual selection (considering all relevant information, especially: name of establishment) 3. Result: 1.958 establishments identified as “nonprofit”

14. 14 NonprofitPrivatePublicValid?Total 19965267087723833668342 199756175816898831198850 199858878557419184109194 199966882578239748149762 20009011204397813922913931 20011030133941113155370 200299113221119515407115408 20031008137411108158570 20041001135871101156890 Number of identified establishments

15. 15 IAB Establishment Panel 2004 BranchNon-profit establishments Education231 Health and social work526 Culture, Sports and Entertainment52 Nonprofit Organizations192 Total1001 Nonprofit Establishments 2004

16. 16 Example: Labour Demand in nonprofit organizations

17. 17 Qualification-specific unemployment

18. 18 Labour Demand for different skill groups in nonprofit establishments  Motivation  Declining demand for unskilled labour force  High unemployment rate of unskilled labour force  Explanation  technological change  increased international competition  organizational change

19. 19 Employment growth by sector 1960 - 1995 Source: Zimmer/Priller (2000: 120)

20. 20 Labour demand of nonprofit establishments Growing proportion of the total volume of work of nonprofit establishments  general expansion of service needs  most activities are work-intensive personal and social services  less exposed to rationalization pressures  But: most activities in the third sector require demanding skills  demand for the unskilled probably not higher or even lower compared to the private sector Research Question: Is there a difference between the labour demand for different qualification groups in the three sectors?

21. 21 Data and Method  Method: standard dynamic labour demand function  Dynamic panel analysis (Arellano/Bond, 1991; Blundell/Bond, 1998; IAB-Establishment Panel e.g. Addisson/Teixeira, 2006)  Data: Linked Employer-Employee-Data 1996-2004

22. 22 Dynamic Labour Demand Model n it = α 1 n it-1 + α 2 X it + γ i + ν t + ε it n it : number of employees (log.) in establishment i and period t X it : vector of control variables γ i : plant-specific error term ν t : time-specific error term ε it : error term n it-1 : number of employees (log.) in previous period t-1

23. 23 Determinants of labour demand  number of employees (previous period)  financial situation: sales, budget  wage sum per capita for two qualification groups - unskilled (without apprenticeship) and skilled (with apprenticeship or university degree)  organizational and technological change  employment structure (shares of part-time work, females and qualified employees)  work council

24. 24 Results  labour demand in nonprofit sector is higher compared to the private sector  but this demand refers to the high-skilled workforce  there is no indication that nonprofit establishments have a higher demand for unskilled employees Conclusion: results dampen exaggerated expectations concerning the labour demand for the low-skilled workers in the nonprofit sector

25. 25 Data Access for external researchers  Research Data Centre (FDZ) of the German Federal Employment Agency: http://fdz.iab.de/enhttp://fdz.iab.de/en  On-site use  Remote data access  For further questions: christian.hohendanner@iab.dechristian.hohendanner@iab.de

26. 26 Thank you!

27. 27 selected variablesSpecification IIISpecification IISpecification I Number of employees (log.) (previous period)*0.918***0.757***0.792*** (0.040)(0.088) Investment in IT*0.013*** (0.004) Organizational change*0.004 (0.003) Nonprofit sector0.016**0.043*** (0.007)(0.015) Public sector0.0000.014* (0.003)(0.007) Observations960311453 Number of ID26573026 Hansen-Test0.010.900.85 AR10.00 AR20.020.140.09 *apart from lagged employment, organizational and technological change, all covariates are considered as exogeneous Results: Labour demand – all skill groups

28. 28 selected variablesSpecification IIISpecification IISpecification I Number of employees (log.) (previous period)0.402***0.1730.197 (0.089)(0.153)(0.159) Total employment (log.)0.521***0.723***0.711*** (0.077)(0.132)(0.138) Investment in technology0.004 (0.003) Organizational change-0.002 (0.002) Nonprofit sector0.013***0.023*** (0.005)(0.008) Public sector0.0020.016*** (0.003)(0.006) Observations920810946 Number of ID25172857 Hansen-Test0.090.610.52 AR10.000.030.02 AR20.770.400.39 Results: Labour demand - skilled

29. 29 selected variablesSpecification IIISpecification IISpecification I Number of employees (log.) (previous period)*0.549***0.349***0.368*** (0.070)(0.118)(0.119) Total employment (log.)0.369***0.480***0.453*** (0.060)(0.091)(0.089) Investment in IT*-0.041*** (0.012) Organizational change*-0.001 (0.007) Nonprofit sector-0.005-0.008 (0.010)(0.012) Public sector-0.039***-0.059*** (0.008)(0.013) Observations51205945 Number of ID13811533 Hansen-test0.060.430.45 AR10.00 AR20.000.02 *apart from lagged employment, organizational and technological change, all covariates are considered as exogeneous Results: Labour demand - unskilled

30. 30 The dynamics of the IAB-Establishment Panel cc.: company code y.: year

31. 31 Atypical Employment in nonprofit establishments  slow down of job creation in the traditional areas of health care and social services  funding structure: highly dependent on public support  financial constraints of the public sector  consequence: high shares of atypical employment

32. 32 Atypical Employment 2004 in three sectors Source: IAB Establishment Panel 2004; * 2003; extrapolated values PrivatePublicThirdTotal Part-time contracts19,426,540,521,3 Fixed-term contracts5,05,413,45,6 Marginal part-time contracts 11,33,210,910,7 Free-lancer1,40,37,21,7 Job Creation Schemes*0,42,35,60,8 Temporary Agency Work1,10,10,20,9 Source: IAB Establishment Panel; Aggregated proportions of total employment in %