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Extensive vs. Intensive Margin in Germany and the United States: Any Differences?

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Author Info
Christian Merkl
Dennis Wesselbaum

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Abstract

This papers analyzes the role of the extensive vis-à-vis the intensive margin of labor adjustment in Germany and the United States. The contribution is twofold. First, we provide an update of older U.S. studies and confirm the view that the extensive margin (i.e., the adjustment in the number of workers) explains the largest part in the overall variability in aggregate hours (namely, about three quarters). Second, although the German labor market is very different from its U.S. counterpart, the quantitative importance of the extensive margin is of similar magnitude

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File URL: http://www.ifw-members.ifw-kiel.de/publications/extensive-vs-intensive-margin-in-germany-and-the-united-states-any-differences/kwp-1563
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Publisher Info
Paper provided by Kiel Institute for the World Economy in its series Kiel Working Papers with number 1563.

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Length: 8 pages
Date of creation: Oct 2009
Date of revision:
Handle: RePEc:kie:kieliw:1563

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Related research
Keywords: Business Cycle; Extensive and Intensive Margin; Variance Decomposition;

Find related papers by JEL classification:
C10 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: General - - - General
E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Langot, François & Quintero Rojas, Coralia, 2008. "Explaining the Evolution of Hours Worked and Employment across OECD Countries: An Equilibrium Search Approach," IZA Discussion Papers 3364, Institute for the Study of Labor (IZA). [Downloadable!]
  2. Richard Rogerson, 2006. "Understanding Differences in Hours Worked," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 9(3), pages 365-409, July. [Downloadable!] (restricted)
  3. Hansen, Gary D., 1985. "Indivisible labor and the business cycle," Journal of Monetary Economics, Elsevier, vol. 16(3), pages 309-327, November. [Downloadable!] (restricted)
  4. Shigeru Fujita & Garey Ramey, 2009. "The Cyclicality Of Separation And Job Finding Rates," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 50(2), pages 415-430, 05. [Downloadable!] (restricted)
  5. Gartner, Hermann & Merkl, Christian & Rothe, Thomas, 2009. "They Are Even Larger! More (on) Puzzling Labor Market Volatilities," IZA Discussion Papers 4403, Institute for the Study of Labor (IZA). [Downloadable!]
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  6. Krause, Michael U. & Lubik, Thomas A., 2007. "The (ir)relevance of real wage rigidity in the New Keynesian model with search frictions," Journal of Monetary Economics, Elsevier, vol. 54(3), pages 706-727, April. [Downloadable!] (restricted)
    Other versions:
  7. Langot, François & Quintero Rojas, Coralia, 2008. "European vs. American Hours Worked: Assessing the Role of the Extensive and Intensive Margins," IZA Discussion Papers 3846, Institute for the Study of Labor (IZA). [Downloadable!]
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This page was last updated on 2009-11-24.


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