(Since When) Are East and West German Business Cycles Synchronised?
Stefan Gießler, Katja Heinisch, Oliver Holtemöller
Abstract
This paper analyses whether and since when East and West German business cycles are synchronised. We investigate real GDP, unemployment rates and survey data as business cycle indicators and employ several empirical methods. Overall, we find that the regional business cycles have synchronised over time. GDP-based indicators and survey data show a higher degree of synchronisation than the indicators based on unemployment rates. However, recently synchronisation among East and West German business cycles seems to become weaker, in line with international evidence.
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Industrial Relations: Worker Codetermination and Collective Wage Bargaining
Steffen Müller, Claus Schnabel
Jahrbücher für Nationalökonomie und Statistik,
Nr. 1,
2019
Abstract
Trade unions and employers’ associations, collective bargaining, and employee representation at the workplace are the cornerstones of industrial relations systems in many developed countries. Germany stands out as a country with powerful works councils and a high coverage rate of collective bargaining agreements, supported by encompassing interest groups of employees and employers and by the state. The German case and the perceived stability of its industrial relations regime have attracted considerable attention among researchers and politicians, which also has to do with the country’s high productivity, comparably few strikes, and relatively minor employment problems. However, in recent years industrial relations in many countries including Germany have come under pressure and the fact that there is no obvious and clearly superior alternative to the current regime of industrial and labour relations may not be sufficient to guarantee the survival of the present system.
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Do Employers Have More Monopsony Power in Slack Labor Markets?
Boris Hirsch, Elke J. Jahn, Claus Schnabel
ILR Review,
Nr. 3,
2018
Abstract
This article confronts monopsony theory’s predictions regarding workers’ wages with observed wage patterns over the business cycle. Using German administrative data for the years 1985 to 2010 and an estimation framework based on duration models, the authors construct a time series of the labor supply elasticity to the firm and estimate its relationship to the unemployment rate. They find that firms possess more monopsony power during economic downturns. Half of this cyclicality stems from workers’ job separations being less wage driven when unemployment rises, and the other half mirrors that firms find it relatively easier to poach workers. Results show that the cyclicality is more pronounced in tight labor markets with low unemployment, and that the findings are robust to controlling for time-invariant unobserved worker or plant heterogeneity. The authors further document that cyclical changes in workers’ entry wages are of similar magnitude as those predicted under pure monopsonistic wage setting.
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Do Startups Provide Employment Opportunities for Disadvantaged Workers?
Daniel Fackler, Michaela Fuchs, Lisa Hölscher, Claus Schnabel
IZA Discussion Paper Series,
im Erscheinen
Abstract
This paper analyzes whether startups offer job opportunities to workers potentially facing labor market problems. It compares the hiring patterns of startups and incumbents in the period 2003 to 2014 using administrative linked employer-employee data for Germany that allow to take the complete employment biographies of newly hired workers into account. The results indicate that young plants are more likely than incumbents to hire older and foreign applicants as well as workers who have instable employment biographies, come from unemployment or outside the labor force, or were affected by a plant closure. However, an analysis of entry wages reveals that disadvantageous worker characteristics come along with higher wage penalties in startups than in incumbents. Therefore, even if startups provide employment opportunities for certain groups of disadvantaged workers, the quality of these jobs in terms of initial remuneration seems to be low.
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Early-Stage Business Formation: An Analysis of Applications for Employer Identification Numbers
Kimberly Bayard, Emin Dinlersoz, Timothy Dunne, John Haltiwanger, Javier Miranda, John Stevens
NBER Working Paper,
Nr. 24364,
2018
Abstract
This paper reports on the development and analysis of a newly constructed dataset on the early stages of business formation. The data are based on applications for Employer Identification Numbers (EINs) submitted in the United States, known as IRS Form SS-4 filings. The goal of the research is to develop high-frequency indicators of business formation at the national, state, and local levels. The analysis indicates that EIN applications provide forward-looking and very timely information on business formation. The signal of business formation provided by counts of applications is improved by using the characteristics of the applications to model the likelihood that applicants become employer businesses. The results also suggest that EIN applications are related to economic activity at the local level. For example, application activity is higher in counties that experienced higher employment growth since the end of the Great Recession, and application counts grew more rapidly in counties engaged in shale oil and gas extraction. Finally, the paper provides a description of new public-use dataset, the “Business Formation Statistics (BFS),” that contains new data series on business applications and formation. The initial release of the BFS shows that the number of business applications in the 3rd quarter of 2017 that have relatively high likelihood of becoming job creators is still far below pre-Great Recession levels.
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Does Intermunicipal Cooperation Increase Efficiency? A Conditional Metafrontier Approach for the Hessian Wastewater Sector
F. Blaeschke, Peter Haug
Local Government Studies,
Nr. 1,
2018
Abstract
This paper analyses the relationship between intermunicipal cooperation and efficiency of public service provision. Organisational arrangements of public service production, including self-provision, joint provision or contracting, affect incentives and internal transaction costs. Hence, cooperation gains from scale effects need to be balanced against technical inefficiencies. We analyse relative efficiency of wastewater disposal for German municipalities. We employ a conditional analysis in conjunction with a metafrontier approach to calculate relative efficiency measures and technology gap ratios controlling for organisational arrangements and further environmental variables. Jointly providing municipalities and contractor municipalities exhibit lower technical efficiency than self-providing and contracting municipalities. As confirmed by previous research, scale effects from cooperation and contracting apply to small municipalities primarily.
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The Effects of Fiscal Policy in an Estimated DSGE Model – The Case of the German Stimulus Packages During the Great Recession
Andrej Drygalla, Oliver Holtemöller, Konstantin Kiesel
Abstract
In this paper, we analyse the effects of the stimulus packages adopted by the German government during the Great Recession. We employ a standard medium-scale dynamic stochastic general equilibrium (DSGE) model extended by non-optimising households and a detailed fiscal sector. In particular, the dynamics of spending and revenue variables are modeled as feedback rules with respect to the cyclical component of output. Based on the estimated rules, fiscal shocks are identified. According to the results, fiscal policy, in particular public consumption, investment, transfers and changes in labour tax rates including social security contributions prevented a sharper and prolonged decline of German output at the beginning of the Great Recession, suggesting a timely response of fiscal policy. The overall effects, however, are small when compared to other domestic and international shocks that contributed to the economic downturn. Our overall findings are not sensitive to the allowance of fiscal foresight.
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Explaining Wage Losses after Job Displacement: Employer Size and Lost Firm Rents
Daniel Fackler, Steffen Müller, Jens Stegmaier
Abstract
Why does job displacement, e.g., following import competition, technological change, or economic downturns, result in permanent wage losses? The job displacement literature is silent on whether wage losses after job displacement are driven by lost firm wage premiums or worker productivity depreciations. We therefore estimate losses in wages and firm wage premiums. Premiums are measured as firm effects from a two-way fixed-effects approach, as described in Abowd, Kramarz, and Margolis (1999). Using German administrative data, we find that wage losses are, on average, fully explained by losses in firm wage premiums and that premium losses are largely permanent. We show that losses in wages and premiums are minor for workers displaced from small plants and strongly increase with pre-displacement firm size, which provides an explanation for the large and persistent wage losses that have been found in previous studies mostly focusing on displacement from large employers.
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Measuring Indirect Effects of Unfair Employer Behavior on Worker Productivity – A Field Experiment
Matthias Heinz, Sabrina Jeworrek, Vanessa Mertins, Heiner Schumacher, Matthias Sutter
Abstract
We present a field experiment in which we set up a call-center to study how the productivity of workers is affected if managers treat their co-workers in an unfair way. This question cannot be studied in long-lived organizations since workers may change their career expectations (and hence effort) when managers behave unfairly towards co-workers. In order to rule out such confounds and to measure productivity changes of unaffected workers in a clean way, we create an environment where employees work for two shifts. In one treatment, we lay off parts of the workforce before the second shift. Compared to two different control treatments, we find that, in the layoff treatment, the productivity of the remaining, unaffected workers drops by 12 percent. We show that this result is not driven by peer effects or altered beliefs about the job or the managers’ competence, but rather related to the workers’ perception of unfair behavior of employers towards co-workers. The latter interpretation is confirmed in a survey among professional HR managers. We also show that the effect of unfair behavior on the productivity of unaffected workers is close to the upper bound of the direct effects of wage cuts on the productivity of affected workers. This suggests that the price of an employer’s unfair behavior goes well beyond the potential tit-for-tat of directly affected workers.
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Indirect Effects of Unfair Employer Behaviour on Workplace Performance
Matthias Heinz, Sabrina Jeworrek, Vanessa Mertins, Heiner Schumacher, Matthias Sutter
VOX CEPR's Policy Portal,
2017
Abstract
Any organisation that needs to restructure, cut wages, or make layoffs needs to know how the employees who are not affected will respond. This column presents a field experiment which revealed that the perception that employers are unfair – in this case, as a result of layoffs – reduces the performance of employees who have not been not directly affected. As part of the experiment, experienced HR managers were able to successfully anticipate the consequences of unfair employer behaviour on unaffected workers.
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