Lingering illness or sudden death? Pre-exit employment developments in German establishments
AbstractUsing a large administrative dataset for Germany, this paper compares employment developments in exiting and surviving establishments. For both West and East Germany we find a clear “shadow of death” effect reflecting lingering illness: establishments shrink dramatically already several years before closure, employment growth rates differ strongly between exiting and surviving establishments, and this difference becomes stronger as exit approaches. We further show that prior to exit the workforce becomes on average more skilled, more female and older in exiting compared to surviving establishments. These effects are more clearly visible in West than in East Germany. Our results also hold when applying a matching approach.
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Bibliographic InfoPaper provided by University of Lüneburg, Institute of Economics in its series Working Paper Series in Economics with number 258.
Length: 30 pages
Date of creation: Dec 2012
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firm exits; shadow of death; Germany;
Other versions of this item:
- Fackler, Daniel & Schnabel, Claus & Wagner, Joachim, 2012. "Lingering illness or sudden death? Pre-exit employment developments in German establishments," Discussion Papers 82, Friedrich-Alexander-University Erlangen-Nuremberg, Chair of Labour and Regional Economics.
- Fackler, Daniel & Schnabel, Claus & Wagner, Joachim, 2012. "Lingering Illness or Sudden Death? Pre-Exit Employment Developments in German Establishments," IZA Discussion Papers 7081, Institute for the Study of Labor (IZA).
- L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
- D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
- J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings
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