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Firing Costs, Employment Fluctuations and Average Employment: An Examination of Germany

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Hunt, Jennifer

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Abstract

West Germany's Employment Promotion Act of 1985 facilitated the use of fixed-term contracts and increased the number of dismissals above which the employer is required to establish a "social plan" (involving severance payments). I assess the effect of this reduction in "firing costs" on movements in employment, using monthly data on a panel of detailed manufacturing industries for 1977-92. I also examine the effect of introducing flexible hours of work in certain industries beginning in 1985. I find that employment adjustment was unaffected by the lower firing costs, but slowed by the greater working hours flexibility. Copyright 2000 by The London School of Economics and Political Science

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Article provided by London School of Economics and Political Science in its journal Economica.

Volume (Year): 67 (2000)
Issue (Month): 266 (May)
Pages: 177-202
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Handle: RePEc:bla:econom:v:67:y:2000:i:266:p:177-202

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  1. Thomas Bauer & Stefan Bender & Holger Bonin, 2004. "Dismissal Protection and Worker Flows in Small Establishments," RWI Discussion Papers 0014, Rheinisch-Westfälisches Institut für Wirtschaftsforschung. [Downloadable!]
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  2. Moser, Christoph & Urban, Dieter M & Weder di Mauro, Beatrice, 2008. "International Competitiveness, Job Creation and Job Destruction - An Establishment Level Study of German Job Flows," CEPR Discussion Papers 6745, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  3. Kugler, Adriana & Pica, Giovanni, 2003. "Effects of Employment Protection and Product Market Regulations on the Italian Labor Market," IZA Discussion Papers 948, Institute for the Study of Labor (IZA). [Downloadable!]
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  4. Eva Reinowski & Jan Sauermann, 2008. "Hat die Befristung von Arbeitsverträgen einen Einfluss auf die Weiterbildung geringqualifiziert beschäftigter Personen?," IWH Discussion Papers 2-08, Halle Institute for Economic Research. [Downloadable!]
  5. Marloes de Graaf-Zijl, 2005. "The Attractiveness of Temporary Employment to Reduce Adjustment Costs," Tinbergen Institute Discussion Papers 05-121/3, Tinbergen Institute. [Downloadable!]
  6. Kugler, Adriana D. & Pica, Giovanni, 2005. "Effects of Employment Protection on Worker and Job Flows: Evidence from the 1990 Italian Reform," CEPR Discussion Papers 5256, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  7. Giuseppe Russo & David Veredas, 2000. "Institutional Rigidities and Employment on the Italian Labour Market: the Dynamic of the Employment in the Large Industrial Firms," CELPE Discussion Papers 53, CELPE (Centre of Labour Economics and Economic Policy), University of Salerno, Italy. [Downloadable!]
  8. Hagen, Tobias, 2001. "Does fixed-term contract employment raise firms' adjustment-speed? : Evidence from an establishment panel for West-Germany," ZEW Discussion Papers 01-57, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research. [Downloadable!]
  9. Adriana Kugler & Juan F. Jimeno & Virginia Hernanz, . "Employment Consequences of Restrictive Permanent Contracts: Evidence from Spanish Labor Market Reforms," Working Papers 2003-14, FEDEA. [Downloadable!]
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  10. Grund, Christian, 2003. "Severance Payments for Dismissed Employees in Germany," IZA Discussion Papers 875, Institute for the Study of Labor (IZA). [Downloadable!]
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  11. Jan Sauermann, 2006. "Who invests in training if contracts are temporary? - Empirical evidence for Germany using selection correction," IWH Discussion Papers 14-06, Halle Institute for Economic Research. [Downloadable!]
  12. José Varejão & Pedro Portugal, 2003. "Why Do Firms Use Fixed-Term Contracts?," CETE Discussion Papers 0310, Universidade do Porto, Faculdade de Economia do Porto. [Downloadable!]
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  13. Boockmann, Bernhard & Hagen, Tobias, 2001. "The use of flexible working contracts in West Germany : evidence from an establishment panel," ZEW Discussion Papers 01-33, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research. [Downloadable!]
  14. Fernando Munoz-Bullon, 2008. "Who downsizes for longer? A longitudinal analysis," Business Economics Working Papers wb082805, Universidad Carlos III, Departamento de Economía de la Empresa. [Downloadable!]
  15. Adriana Kugler adkugler@uh.edu & Giovanni Pica, 2005. "The Effects of Employment Protection on the Italian Labour Market," CSEF Working Papers 135, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy. [Downloadable!]
  16. Kugler, Adriana & Pica, Giovanni, 2003. "The Effects Of Employment Protection and Product Market Regulations on The Italian Labor Market," Discussion Paper Series In Economics And Econometrics 0310, Economics Division, School of Social Sciences, University of Southampton. [Downloadable!]
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  17. Mohamed Ali Ben Halima, 2005. "The determinants for labour contract length A French micro-econometric study," Working Papers 0503, Groupe d'Analyse et de Théorie Economique (GATE), Centre national de la recherche scientifique (CNRS), Université Lyon 2, Ecole Normale Supérieure. [Downloadable!]
  18. Christian Grund, 2004. "Severance Payments for Dismissed Employees Severance Payments for Dismissed Employees in Germany," Bonn Econ Discussion Papers bgse4_2004, University of Bonn, Germany. [Downloadable!]
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This page was last updated on 2009-11-22.

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