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

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  • Charlotte Senftleben-König
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    Abstract

    This paper investigates the short- and medium-term effects of the deregulation of shopopening hours legislation on retail employment in Germany. In 2006, the legislative competence 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 regional variation in the legislation in order to identify the effect product market deregulation has on retail employment. We find robust evidence that the deregulation of shop closing legislation had negative effects on retail employment, with considerable heterogeneity in terms of the type of employment as well as establishment size. That is, the employment losses are most pronounced for small retail stores and are almost exclusively borne by full-time employees.

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    File URL: http://sfb649.wiwi.hu-berlin.de/papers/pdf/SFB649DP2014-013.pdf
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    Bibliographic Info

    Paper provided by Sonderforschungsbereich 649, Humboldt University, Berlin, Germany in its series SFB 649 Discussion Papers with number SFB649DP2014-013.

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    Length: 21 pages
    Date of creation: Jan 2014
    Date of revision:
    Handle: RePEc:hum:wpaper:sfb649dp2014-013

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    Keywords: Product market regulation; Employment; Retail trade;

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    1. Olivier Blanchard & Francesco Giavazzi, 2003. "Macroeconomic Effects Of Regulation And Deregulation In Goods And Labor Markets," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 118(3), pages 879-907, August.
    2. Raymond Gradus, 1996. "The economic effects of extending shop opening hours," Journal of Economics, Springer, Springer, vol. 64(3), pages 247-263, October.
    3. Marianne Bertrand & Francis Kramarz, 2001. "Does Entry Regulation Hinder Job Creation? Evidence from the French Retail Industry," NBER Working Papers 8211, National Bureau of Economic Research, Inc.
    4. Nooteboom, Bart, 1982. "A new theory of retailing costs," European Economic Review, Elsevier, vol. 17(2), pages 163-186.
    5. Eliana Viviano, 2006. "Entry regulations and labor market outcomes: evidence from the Italian retail trade sector," Temi di discussione (Economic working papers), Bank of Italy, Economic Research and International Relations Area 594, Bank of Italy, Economic Research and International Relations Area.
    6. Dauth, Wolfgang, 2010. "Agglomeration and regional employment growth," IAB Discussion Paper 201007, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    7. Tanguay, Georges & Vallee, Luc & Lanoie, Paul, 1995. "Shopping Hours and Price Levels in the Retailing Industry: A Theoretical and Empirical Analysis," Economic Inquiry, Western Economic Association International, Western Economic Association International, vol. 33(3), pages 516-24, July.
    8. Wenzel, Tobias, 2010. "Deregulation of shopping hours: The impact on independent retailers and chain stores," DICE Discussion Papers 03, Heinrich‐Heine‐Universität Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
    9. Micael Castanheira De Moura & Tito Boeri & Ricardo Faini & Vincenzo Galasso, 2006. "Structural reforms without prejudice," ULB Institutional Repository 2013/10017, ULB -- Universite Libre de Bruxelles.
    10. Moulton, Brent R., 1986. "Random group effects and the precision of regression estimates," Journal of Econometrics, Elsevier, Elsevier, vol. 32(3), pages 385-397, August.
    11. Skuterud, Mikal, 2005. "The impact of Sunday shopping on employment and hours of work in the retail industry: Evidence from Canada," European Economic Review, Elsevier, vol. 49(8), pages 1953-1978, November.
    12. Olivier Boylaud & Giuseppe Nicoletti, 2001. "Regulatory reform in retail distribution," OECD Economic Studies, OECD Publishing, vol. 2001(1), pages 253-274.
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