08.04.2021 • 10/2021
IWH Bankruptcy Update: Bankruptcy Statistics Rise Again in March
The number of firms declaring bankruptcy in Germany increased once again in March. However, the number of jobs impacted by the bankruptcy of large firms remained constant. The IWH Bankruptcy Report, published by the Halle Institute for Economic Research (IWH), provides a monthly update on German bankruptcy statistics.
Steffen Müller
Read press release
03.12.2020 • 24/2020
IWH Bankruptcy Update: Fewer Large Companies Declare Bankruptcy
Following a spike in bankruptcy of large companies, statistics on impacted employees are declining again. The total number of bankruptcies also remains at a low level. Published by the Halle Institute for Economic Research (IWH), the IWH Bankruptcy Update provides monthly statistics on corporate bankruptcies in Germany.
Steffen Müller
Read press release
06.08.2020 • 15/2020
IWH Bankruptcy Update: Number of Employees Affected by Bankruptcy Continues to Rise in Germany
In July, more than three times as many jobs were impacted by corporate bankruptcies in Germany in comparison to the monthly averages from early 2020. The July figure was also significantly higher in relation to the previous month. By contrast, the number of bankruptcies fell slightly. These are the main findings of the most recent IWH Bankruptcy Update published by the Halle Institute for Economic Research (IWH), which provides monthly reports on German bankruptcies.
Steffen Müller
Read press release
Why Is there Resistance to Works Councils In Germany? An Economic Perspective
Steffen Müller, Jens Stegmaier
Economic and Industrial Democracy,
No. 3,
2020
Abstract
Recent empirical research generally finds evidence of positive economic effects for works councils, for example with regard to productivity and – with some limitations – to profits. This makes it necessary to explain why employers’ associations have reservations about works councils. On the basis of an in-depth literature analysis, this article shows that beyond the generally positive findings, there are important heterogeneities in the impact of works councils. The authors argue that those groups of employers that tend to benefit little from employee participation in terms of productivity and profits may well be important enough to shape the agenda of their employers’ organization and have even gained in importance within their organizations in recent years. The authors also discuss the role of deviations from profit-maximizing behavior like risk aversion, short-term profit-maximization and other non-pecuniary motives, as possible reasons for employer resistance.
Read article
Worker Participation in Decision-making, Worker Sorting, and Firm Performance
Steffen Müller, Georg Neuschäffer
Abstract
Worker participation in decision-making is often associated with high-wage and high-productivity firm strategies. Using linked-employer-employee data for Germany and worker fixed effects from a two-way fixed effects model of wages capturing observed and unobserved worker quality, we find that establishments with formal worker participation via works councils indeed employ higher-quality workers. We show that worker quality is already higher in plants before council introduction and further increases after the introduction. Importantly, we corroborate previous studies by showing positive productivity and profitability effects even after taking into account worker sorting.
Read article
Transmitting Fiscal Covid-19 Counterstrikes Effectively: Mind the Banks!
Reint E. Gropp, Michael Koetter, William McShane
IWH Online,
No. 2,
2020
Abstract
The German government launched an unprecedented range of support programmes to mitigate the economic fallout from the Covid-19 pandemic for employees, self-employed, and firms. Fiscal transfers and guarantees amount to approximately €1.2 billion by now and are supplemented by similarly impressive measures taken at the European level. We argue in this note that the pandemic poses, however, also important challenges to financial stability in general and bank resilience in particular. A stable banking system is, in turn, crucial to ensure that support measures are transmitted to the real economy and that credit markets function seamlessly. Our analysis shows that banks are exposed rather differently to deteriorated business outlooks due to marked differences in their lending specialisation to different economic sectors. Moreover, a number of the banks that were hit hardest by bleak growth prospects of their borrowers were already relatively thinly capitalised at the outset of the pandemic. This coincidence can impair the ability and willingness of selected banks to continue lending to their mostly small and medium sized entrepreneurial customers. Therefore, ensuring financial stability is an important pre-requisite to also ensure the effectiveness of fiscal support measures. We estimate that contracting business prospects during the first quarter of 2020 could lead to an additional volume of non-performing loans (NPL) among the 40 most stressed banks ‒ mostly small, regional relationship lenders ‒ on the order of around €200 million. Given an initial stock of NPL of €650 million, this estimate thus suggests a potential level of NPL at year-end of €1.45 billion for this fairly small group of banks already. We further show that 17 regional banking markets are particularly exposed to an undesirable coincidence of starkly deteriorating borrower prospects and weakly capitalised local banks. Since these regions are home to around 6.8% of total employment in Germany, we argue that ensuring financial stability in the form of healthy bank balance sheets should be an important element of the policy strategy to contain the adverse real economic effects of the pandemic.
Read article
07.05.2020 • 7/2020
Launch of IWH Bankruptcy Update: Number of corporate bankruptcies in Germany constant despite Corona crisis
Despite the Corona outbreak, the number of corporate bankruptcies in Germany so far remains at 2019 levels. This is according to the new IWH Bankruptcy Update provided by the Halle Institute for Economic Research (IWH) on a monthly basis and much earlier than official statistics.
Steffen Müller
Read press release
Coal Phase-out in Germany – Implications and Policies for Affected Regions
Pao-Yu Oei, Hauke Hermann, Philipp Herpich, Oliver Holtemöller, Benjamin Lünenbürger, Christoph Schult
Energy,
April
2020
Abstract
The present study examines the consequences of the planned coal phase-out in Germany according to various phase-out pathways that differ in the ordering of power plant closures. Soft-linking an energy system model with an input-output model and a regional macroeconomic model simulates the socio-economic effects of the phase-out in the lignite regions, as well as in the rest of Germany. The combination of two economic models offers the advantage of considering the phase-out from different perspectives and thus assessing the robustness of the results. The model results show that the lignite coal regions will exhibit losses in output, income and population, but a faster phase-out would lead to a quicker recovery. Migration to other areas in Germany and demographic changes will partially compensate for increasing unemployment, but support from federal policy is also necessary to support structural change in these regions.
Read article
Does Working at a Start-Up Pay Off?
Daniel Fackler, Lisa Hölscher, Claus Schnabel, Antje Weyh
Abstract
Using representative linked employer-employee data for Germany, this paper analyzes short- and long-run differences in labor market performance of workers joining startups instead of incumbent firms. Applying entropy balancing and following individuals over ten years, we find huge and long-lasting drawbacks from entering a start-up in terms of wages, yearly income, and (un)employment. These disadvantages hold for all groups of workers and types of start-ups analyzed. Although our analysis of different subsequent career paths highlights important heterogeneities, it does not reveal any strategy through which workers joining start-ups can catch up with the income of similar workers entering incumbent firms.
Read article
Fehlende Fachkräfte in Deutschland – Unterschiede in den Betrieben und mögliche Erklärungsfaktoren: Ergebnisse aus dem IAB-Betriebspanel 2018
Eva Dettmann, Daniel Fackler, Steffen Müller, Georg Neuschäffer, Viktor Slavtchev, Ute Leber, Barbara Schwengler
IAB-Forschungsbericht 10/2019,
2019
Abstract
In the years after the economic crisis, the economic situation of establishments in West and East Germany has improved steadily. At the same time, increased labor market dynamics and a positive trend in total employment can be observed. Also the demand for skilled employees reached a new high of 2.7 million in 2018. Only about 60 percent of the demand could be covered, which is also reflected in a further increase of the so-called non-occupancy quota. With regard to the distribution of this indicator for skilled labor shortages, we observe clear sector- and size-specific differences as well as regional heterogeneity. The quota is particularly high in the construction industry and in agriculture and forestry, with more than half the positions left vacant. A positive correlation between shortages of skilled labor and the use of temporary work, flexible working hours and investments in vocational training and further education is assessed in a multivariate analysis. The structure of formal occupational skill requirements did not change very much over recent years. However, a clear trend towards more flexible work organization can be observed. For example, about one quarter of the establishments offer teleworking. The share of part-time employment is also increasing nationwide, especially in sectors with a higher proportion of women, such as the service industries or the public sector. The share of marginal employment is particularly high in sectors that are characterized by cyclical and/or seasonal demand fluctuations or comparatively unspecific skill requirements – and above-average shortages of skilled labor. In 2018, the proportion of establishments authorized to provide in-house vocational training rose for the first time since 2010 – to 54 percent in Germany. In Eastern Germany, the share is significantly lower at 49 percent. The proportion of authorized establishments that actually train apprentices has been relatively stable at around 50 percent for several years. Both successfully occupied and vacant apprenticeships are distributed very heterogeneously across sectors. The recruitment rate of successful graduates is about three quarters. In establishments with skilled labor shortages, both the training rate and the graduate hiring rate are higher, suggesting that vocational training is already used here as an alternative strategy for recruiting skilled employees. The share of establishments supporting further education of their employees remains stable at about fifty percent for several years, and the proportion of employees participating in training is still about one third. A comparatively higher rate of further education among unskilled employees in establishments with skilled labor shortages indicates that internal resources are being increasingly used here to meet the demand for skilled employees.
Read article