Labor Demand During the Crisis: What Happened in Germany?
Claudia M. Buch
IZA. Discussion Paper No. 6074,
2011
Abstract
In Germany, the employment response to the post-2007 crisis has been muted compared to other industrialized countries. Despite a large drop in output, employment has hardly changed. In this paper, we analyze the determinants of German firms’ labor demand during the crisis using a firm-level panel dataset. Our analysis proceeds in two steps. First, we estimate a dynamic labor demand function for the years 2000-2009 accounting for the degree of working time flexibility and the presence of works councils. Second, on the basis of these
estimates, we use the difference between predicted and actual employment as a measure of labor hoarding as the dependent variable in a cross-sectional regression for 2009. Apart from total labor hoarding, we also look at the determinants of subsidized labor hoarding through short-time work. The structural characteristics of firms using these channels of adjustment differ. Product market competition has a negative impact on total labor hoarding but a positive effect on the use of short-time work. Firm covered by collective agreements hoard less labor overall; firms without financial frictions use short-time work less intensively.
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Entrepreneurial Opportunity and the Formation of Photovoltaic Clusters in Eastern Germany
Matthias Brachert, Christoph Hornych
R. Wüstenhagen, R. Wuebker (Hrsg.), Handbook of Research on Energy Entrepreneurship,
2011
Abstract
The aim of this paper is to explain the evolution of the spatial structures of one particular type of renewable energy in Germany – the photovoltaic (PV) industry. We first demonstrate how environmental movements have contributed to institutional change and government action, leading to changes in the legal and regulative structure in Germany. We describe how these changes opened up a window of locational opportunity (WLO), thus combining the WLO concept with the entrepreneurial opportunity concept. As market entries occurred mainly in Eastern Germany, the paper also explores the factors leading to a concentration of economic activity related to the new PV industry in this part of the country. Based on the WLO concept, we combine this framework with the industrial dynamics literature by Klepper (2007) and illustrate the spatial evolution of the PV industry.
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Can Korea Learn from German Unification?
Ulrich Blum
IWH Discussion Papers,
No. 3,
2011
Abstract
We first analyze pre-unification similarities and differences between the two Germanys and the two Koreas in terms of demographic, social, political and economic status. An important issue is the degree of international openness. “Stone-age” type communism of North Korea and the seclusion of the population prevented inner-Korean contacts and contacts with rest of the world. This may create enormous adjustment costs if institutions, especially informal institutions, change. We go on by showing how transition and integration interact in a potential unification process based on the World Bank Revised Minimum Standard Model (RMSM) and on the Salter-Swan-Meade model. In doing so, we relate the macro and external impacts on an open economy to its macro-sectoral structural dynamics. The findings suggest that it is of utmost importance to relate microeconomic policies to the macroeconomic ties and side conditions for both parts of the country. Evidence from Germany suggests that the biggest general error in unification was neglecting these limits, especially limitations to policy instruments. Econometric analysis supports these findings. In the empirical part, we consider unification as an “investment” and track down the (by-and-large immediate to medium-term) costs and the (by-and-large long-term) benefits of retooling a retarded communist economy. We conclude that, from a South-Korean
perspective, the Korean unification will become relatively much more expensive than the German unification and, thus, not only economic, but to a much larger degree political considerations must include the tying of neighboring countries into the convergence process. We finally provide, 62 years after Germany’s division and 20 years after unification, an outlook on the strength of economic inertia in order to show that it may take much more than a generation to compensate the damage inflicted by the communist system.
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Interest Rate Convergence in the Euro-Candidate Countries: Volatility Dynamics of Sovereign Bond Yields
Hubert Gabrisch, Lucjan T. Orlowski
Emerging Markets Finance and Trade,
2010
Abstract
We argue that a “static“ specification of the Maastricht criterion for long-term bond yields is not conducive to assessing stability of financial systems in euro-candidate countries. Instead, we advocate a dynamic approach to assessing interest rate convergence to a common currency that is based on the analysis of financial system stability. Accordingly, we empirically test volatility dynamics of the ten-year sovereign bond yields of the 2004 EU accession countries in relation to the eurozone yields during the January 2, 2001-January 22, 2009, sample period. Our results show a varied degree of the relationship between domestic and eurozone sovereign bond yields, the most pronounced for the Czech Republic, Slovenia, and Poland, and weaker for Hungary and Slovakia. We find some divergence of relative bond yields since the EU accession.
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Interactive Dynamic Capabilities and Regenerating the East German Innovation System
N. von Tunzelmann, Jutta Günther, Katja Wilde, Björn Jindra
Contributions to Political Economy,
2010
Abstract
The paper sets out a specification of capabilities and competencies derived from Sen’s work on consumer capabilities and welfare economics. This approach is one that proves remarkably easy to generalise, first to producer and supplier capabilities, and thence to interactive and dynamic capabilities. The approach is then applied via the consequential perspectives of regional systems of innovation and network alignment to the case of the efforts to regenerate the innovation system in East Germany since reunification. It is seen that this process can be divided into three periods, of which the most recent appears to meet some of the theoretical requirements for effective interactive capabilities. It is less clear that the criteria for dynamic capabilities—which involve considerations of speed-up and flexibility, to meet the market requirements in real time—have yet been taken sufficiently seriously.
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Monopsonistic Labour Markets and the Gender Pay Gap: Theory and Empirical Evidence
Boris Hirsch
Lecture Notes in Economics and Mathematical Systems,
No. 639,
2010
Abstract
This book investigates models of spatial and dynamic monopsony and their application to the persistent empirical regularity of the gender pay gap. Theoretically, the main conclusion is that employers possess more monopsony power over their female employees if women are less driven by pecuniary considerations in their choice of employers than men. Employers may exploit this to increase their profits at the detriment of women’s wages. Empirically, it is indeed found that women’s labour supply to the firm is less wage-elastic than men’s and that at least a third of the gender pay gap in the data investigated may result from employers engaging in monopsonistic discrimination. Therefore, a monopsonistic approach to gender discrimination in the labour market clearly contributes to the economic understanding of the gender pay gap. It not only provides an intuitively appealing explanation of the gap from standard economic reasoning, but it is also corroborated by empirical observation.
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