Panel Analysis of NPOs in Germany Design and Preliminary Results Lutz Bellmann

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. 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 Panel Analysis of NPOs in Germany Design and Preliminary Results

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

4. Number of interviewed establishments East GermanyWest Germany

5. 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 Population

6. ~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”) The IAB-Establishment Panel

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

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

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

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. 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. 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. Selection Procedure (by TNS Infratest Social Research) 1. Preselection of potential establishmentsbased 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. Number of identified establishments

15. Nonprofit Establishments 2004

16. Example: Labour Demand in nonprofit organizations

17. Qualification-specific unemployment

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

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. 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. Dynamic Labour Demand Model • nit = α1nit-1 + α2Xit + γi + νt + εit nit: number of employees (log.) in establishment i and period t Xit: vector of control variables γi: plant-specific error term νt: time-specific error term εit: error term nit-1: number of employees (log.) in previous period t-1

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

26. Thank you!

27. Results: Labour demand – all skill groups

28. Results: Labour demand - skilled

29. Results: Labour demand - unskilled

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

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. Atypical Employment 2004 in three sectors Source: IAB Establishment Panel 2004; * 2003; extrapolated values