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Product Market Deregulation and Employment Outcomes: Evidence from the German Retail Sector

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  • Charlotte Senftleben-König

    (Humboldt-Universitaet zu Berlin)

Abstract

This paper investigates the effects of the deregulation of business hours legislation on retail employment in Germany. In 2006, the legislative power was shifted from the federal to the state level, leading to a gradual deregulation of shop opening restrictions in most of Germany’s sixteen federal states. The paper exploits intra-country regional variation in the liberalization of closing laws in order to identify the effect of product market deregulation on retail employment. I report evidence that the deregulation had moderately negative effects on retail employment, leading to a loss of 19,000 full-time equivalent jobs. These job losses are concentrated among small establishments and are almost exclusively borne by full-time employees. I further show that the number of small stores significantly reduced, implying that deregulation has induced structural changes within the retail sector. These results are robust to various checks, including placebo tests and variations in model specifications. Robust effects on sales or prices were not detected. Creation Date: 2014-12-09

Suggested Citation

  • Charlotte Senftleben-König, "undated". "Product Market Deregulation and Employment Outcomes: Evidence from the German Retail Sector," BDPEMS Working Papers 2014009, Berlin School of Economics.
    • Handle: RePEc:bdp:wpaper:2014009
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    More about this item

    Keywords

    Product market regulation; Employment; Retail trade;
    All these keywords.

    JEL classification:

    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce

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