Employment Effects of Introducing a Minimum Wage: The Case of Germany
Oliver Holtemöller, Felix Pohle
Economic Modelling,
forthcoming
Abstract
Income inequality has been a major concern of economic policy makers for several years. Can minimum wages help to mitigate inequality? In 2015, the German government introduced a nationwide statutory minimum wage to reduce income inequality by improving the labour income of low-wage employees. However, the employment effects of wage increases depend on time and region specific conditions and, hence, they cannot be known in advance. Because negative employment effects may offset the income gains for low-wage employees, it is important to evaluate minimum-wage policies empirically. We estimate the employment effects of the German minimum-wage introduction using panel regressions on the state-industry-level. We find a robust negative effect of the minimum wage on marginal and a robust positive effect on regular employment. In terms of the number of jobs, our results imply a negative overall effect. Hence, low-wage employees who are still employed are better off at the expense of those who have lost their jobs due to the minimum wage.
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Do Start-ups Provide Employment Opportunities for Disadvantaged Workers?
Daniel Fackler, Michaela Fuchs, Lisa Hölscher, Claus Schnabel
Industrial and Labor Relations Review,
forthcoming
Abstract
This article compares the hiring patterns of start-ups and incumbent firms to analyze whether start-ups offer relatively more job opportunities to disadvantaged workers. Using administrative linked employer–employee data for Germany that provide the complete employment biographies of newly hired workers, the authors show that young firms are more likely than incumbents to hire applicants who are older, foreign, or unemployed, or who have unstable employment histories, arrive from outside the labor force, or were affected by a plant closure. Analysis of entry wages shows that penalties for these disadvantaged workers, however, are higher in start-ups than in incumbent firms. Therefore, even if start-ups provide employment opportunities for certain groups of disadvantaged workers, the quality of these jobs in terms of initial remuneration appears to be low.
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Paid Vacation Use: The Role of Works Councils
Laszlo Goerke, Sabrina Jeworrek
Economic and Industrial Democracy,
forthcoming
Abstract
The article investigates the relationship between codetermination at the plant level and paid vacation in Germany. From a legal perspective, works councils have no impact on vacation entitlements, but they can affect their use. Employing data from the German Socio-Economic Panel (SOEP), the study finds that male employees who work in an establishment, in which a works council exists, take almost two additional days of paid vacation annually, relative to employees in an establishment without such institution. The effect for females is much smaller, if discernible at all. The data suggest that this gender gap might be due to the fact that women exploit vacation entitlements more comprehensively than men already in the absence of a works council.
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Badly Hurt? Natural Disasters and Direct Firm Effects
Felix Noth, Oliver Rehbein
Finance Research Letters,
forthcoming
Abstract
We investigate firm outcomes after a major flood in Germany in 2013. We robustly find that firms located in the disaster regions have significantly higher turnover, lower leverage, and higher cash in the period after 2013. We provide evidence that the effects stem from firms that already experienced a similar major disaster in 2002. Overall, our results document a positive net effect on firm performance in the direct aftermath of a natural disaster.
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Should Forecasters Use Real‐time Data to Evaluate Leading Indicator Models for GDP Prediction? German Evidence
Katja Heinisch, Rolf Scheufele
German Economic Review,
forthcoming
Abstract
In this paper, we investigate whether differences exist among forecasts using real‐time or latest‐available data to predict gross domestic product (GDP). We employ mixed‐frequency models and real‐time data to reassess the role of surveys and financial data relative to industrial production and orders in Germany. Although we find evidence that forecast characteristics based on real‐time and final data releases differ, we also observe minimal impacts on the relative forecasting performance of indicator models. However, when obtaining the optimal combination of soft and hard data, the use of final release data may understate the role of survey information.
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Cross-border Transmission of Emergency Liquidity
Thomas Kick, Michael Koetter, Manuela Storz
Journal of Banking & Finance,
forthcoming
Abstract
We show that emergency liquidity provision by the Federal Reserve transmitted to non-U.S. banking markets. Based on manually collected holding company structures, we identify banks in Germany with access to U.S. facilities. Using detailed interest rate data reported to the German central bank, we compare lending and borrowing rates of banks with and without such access. U.S. liquidity shocks cause a significant decrease in the short-term funding costs of the average German bank with access. This reduction is mitigated for banks with more vulnerable balance sheets prior to the inception of emergency liquidity. We also find a significant pass-through in terms of lower corporate credit rates charged for banks with the lowest pre-crisis leverage, US-dollar funding needs, and liquidity buffers. Spillover effects from U.S. emergency liquidity provision are generally confined to short-term rates.
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Nowcasting East German GDP Growth: a MIDAS Approach
João Carlos Claudio, Katja Heinisch, Oliver Holtemöller
Empirical Economics,
No. 1,
2020
Abstract
Economic forecasts are an important element of rational economic policy both on the federal and on the local or regional level. Solid budgetary plans for government expenditures and revenues rely on efficient macroeconomic projections. However, official data on quarterly regional GDP in Germany are not available, and hence, regional GDP forecasts do not play an important role in public budget planning. We provide a new quarterly time series for East German GDP and develop a forecasting approach for East German GDP that takes data availability in real time and regional economic indicators into account. Overall, we find that mixed-data sampling model forecasts for East German GDP in combination with model averaging outperform regional forecast models that only rely on aggregate national information.
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Nowcasting East German GDP Growth: a MIDAS Approach
João Carlos Claudio, Katja Heinisch, Oliver Holtemöller
IWH Discussion Papers,
No. 24,
2019
Abstract
Economic forecasts are an important element of rational economic policy both on the federal and on the local or regional level. Solid budgetary plans for government expenditures and revenues rely on efficient macroeconomic projections. However, official data on quarterly regional GDP in Germany are not available, and hence, regional GDP forecasts do not play an important role in public budget planning. We provide a new quarterly time series for East German GDP and develop a forecasting approach for East German GDP that takes data availability in real time and regional economic indicators into account. Overall, we find that mixed-data sampling model forecasts for East German GDP in combination with model averaging outperform regional forecast models that only rely on aggregate national information.
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Zur Wirtschaftskraft deutscher Regionen aus langfristiger Perspektive: Alte Muster werden in Ostdeutschland langsam wieder sichtbar
Axel Lindner
Wirtschaft im Wandel,
No. 3,
2019
Abstract
Kann der Osten Deutschlands in Zukunft noch wesentlich aufholen, oder haben die 40 Jahre Zentralplanwirtschaft dauerhafte Spuren in der Raumstruktur der deutschen Volkswirtschaft hinterlassen? Dieser Beitrag vergleicht die Raumstruktur der deutschen Volkswirtschaft im Jahr 1925, vor den politischen Umbrüchen des 20. Jahrhunderts, mit ihrer Entwicklung nach der Vereinigung. Es zeigen sich folgende Punkte: Gewinner der historischen Umbrüche war eher Süd- als Westdeutschland. Berlin konnte sein Hauptstadt-Potenzial lange nicht ausspielen, beginnt dies aber nun nachzuholen. Die Wirtschaftskraft ostdeutscher Flächenländer war 1925 breit gestreut und dabei teils höher, teils niedriger als die Deutschlands. Seit 1990 ist sie dagegen viel niedriger als im gesamtdeutschen Durchschnitt und liegt eng beieinander. Zwar holten die ostdeutschen Flächenländer in den Jahren nach 1990 zügig auf, nach dem Jahr 2000 aber nur noch langsam. Die Streuung nimmt erst seit 2010 wieder ein wenig zu. Aus historischer Perspektive sehen manche Tendenzen, etwa der Berlin-Boom und die höhere Wachstumsdynamik in Sachsen, wie eine Normalisierung aus, die sich mit einiger Wahrscheinlichkeit fortsetzen dürfte.
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Ostdeutscher Produktivitätsrückstand und Betriebsgröße
Steffen Müller, Georg Neuschäffer
Wirtschaft im Wandel,
No. 3,
2019
Abstract
Auch 30 Jahre nach dem Mauerfall ist die Produktivität der ostdeutschen Wirtschaft um 20% geringer als die der westdeutschen. Vielfach wird dies dadurch erklärt, dass westdeutsche Betriebe größer sind – denn größere Betriebe sind meist produktiver. Berechnungen auf Basis einzelbetrieblicher Daten bringen jedoch zum Vorschein, dass die Produktivitätslücke sich selbst dann nicht schließt, wenn Betriebe ähnlicher Größe verglichen werden, die zudem noch der gleichen Branche angehören und Ähnlichkeiten in weiteren für die Produktivität relevanten Merkmalen wie der Kapitalintensität, der Exporttätigkeit und dem Anteil qualifizierten Personals aufweisen.
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