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Dismissal Protection and Worker Flows in Small Establishments

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Author Info
Thomas Bauer ()
Uwe Sunde
Holger Bonin

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Abstract

The paper examines real and nominal wage rigidities.We estimate a switching regime model, in which the observed distribution of individual wage changes, computed from West German register data for 1976-1997, is generated by simultaneous processes of real, nominal or no wage rigidity, and measurement error. The fraction of workers facing wage increases that are due to nominal, but mostly real wage rigidity is substantial.The extent of real rigidity rises with inflation, whereas the opposite holds for nominal rigidity. Overall, the incidence of wage rigidity, which accelerates unemployment growth, is most likely minimized in an environment with moderate inflation.

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Paper provided by Rheinisch-Westfälisches Institut für Wirtschaftsforschung in its series RWI Discussion Papers with number 0012.

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Length: 47 pages
Date of creation: Mar 2004
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Handle: RePEc:rwi:dpaper:0012

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Related research
Keywords: downward wage rigidity real effects of inflation collective bargaining switching regime model West Germany

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Find related papers by JEL classification:
J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects
E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy

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.:

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  2. Stephen Nickell & Glenda Quintini, 2003. "Nominal wage rigidity and the rate of inflation," Economic Journal, Royal Economic Society, vol. 113(490), pages 762-781, October. [Downloadable!] (restricted)
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  3. Nickell, Stephen & Layard, Richard, 1999. "Labor market institutions and economic performance," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 3, chapter 46, pages 3029-3084 Elsevier. [Downloadable!] (restricted)
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  18. Joseph G. Altonji & Paul J. Devereux, 1999. "The Extent and Consequences of Downward Nominal Wage Rigidity," NBER Working Papers 7236, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  22. Daron Acemoglu & Joshua D. Angrist, 2001. "Consequences of Employment Protection? The Case of the Americans with Disabilities Act," Journal of Political Economy, University of Chicago Press, vol. 109(5), pages 915-957, October. [Downloadable!] (restricted)
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  23. Holden, Steinar, 1994. "Wage bargaining and nominal rigidities," European Economic Review, Elsevier, vol. 38(5), pages 1021-1039, May. [Downloadable!] (restricted)
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  28. Caballero, Ricardo J & Hammour, Mohamad L, 1994. "The Cleansing Effect of Recessions," American Economic Review, American Economic Association, vol. 84(5), pages 1350-68, December. [Downloadable!] (restricted)
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  32. Wagner, Joachim & Schnabel, Claus & Kölling, Arnd, 2001. "Threshold Values in German Labor Law and Job Dynamics in Small Firms: The Case of the Disability Law," IZA Discussion Papers 386, Institute for the Study of Labor (IZA). [Downloadable!]
Full references

Cited by:
(explanations, 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. Bassanini, Andrea & Nunziata, Luca & Venn, Danielle, 2008. "Job Protection Legislation and Productivity Growth in OECD Countries," IZA Discussion Papers 3555, Institute for the Study of Labor (IZA). [Downloadable!]
  2. Alda, Holger & Bellmann, Lutz & Gartner, Hermann, 2005. "Wage structure and labour mobility in the West German private sector 1993-2000," IAB Discussion Paper 200518, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]. [Downloadable!]
  3. Laszlo Goerke & Markus Pannenberg, 2005. "Berufliche Weiterbildung "on-the-job" und Auflösung von Beschäftigungsverhältnissen," Working Papers of the Research Group Heterogenous Labor 04-22, Research Group Heterogeneous Labor, University of Konstanz/ZEW Mannheim. [Downloadable!]
  4. Blien, Uwe & Kirchhof, Kai & Ludewig, Oliver, 2006. "Agglomeration effects on labour demand," IAB Discussion Paper 200628, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]. [Downloadable!]
  5. Trevisan, Elisabetta, 2007. "Job Security and New Restrictive Permanent Contracts. Are Spanish Workers More Worried of Losing Their Job?," Working Papers 07-3, University of Aarhus, Aarhus School of Business, Department of Economics. [Downloadable!]
    Other versions:
  6. Bonin, Holger, 2004. "Lockerung des Kündigungsschutzes: Ein Weg zu mehr Beschäftigung?," IZA Discussion Papers 1106, Institute for the Study of Labor (IZA). [Downloadable!]
  7. Romeu Gordo, Laura, 2006. "Compression of morbidity and the labor supply of older people," IAB Discussion Paper 200609, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]. [Downloadable!]
  8. Jian-Ping Zhou, 2006. "Reforming Employment Protection Legislation in France," IMF Working Papers 06/108, International Monetary Fund. [Downloadable!]
  9. Alejandro Micco & Carmen Pagés, 2006. "The Economic Effects of Employment Protection: Evidence from International Industry-Level Data," IZA Discussion Papers 2433, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  10. Burgert, Derik, 2006. "Einstellungschancen von Älteren – Wie wirkt der Schwellenwert im Kündigungsschutz?," MPRA Paper 5846, University Library of Munich, Germany. [Downloadable!]
  11. Blien, Uwe & Hirschenauer, Franziska & Phan, thi Hong Van, 2006. "Model-based classification of regional labour markets : for purposes of labour market policy," IAB Discussion Paper 200629, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]. [Downloadable!]
  12. Lena Koller & Claus Schnabel & Joachim Wagner, 2005. "Arbeitsrechtliche Schwellenwerte und betriebliche Arbeitsplatzdynamik: Eine empirische Untersuchung am Beispiel des Schwerbehindertengesetzes," Working Paper Series in Economics 13, University of Lüneburg, Institute of Economics. [Downloadable!]
  13. Petra Moog & Uschi Backes-Gellner & Gldem Demirer, 2005. "Arbeitsrechtliche Regulierungen und ihr Einfluss auf Unternehmensgrndungen," Working Papers 0052, University of Zurich, Institute for Strategy and Business Economics (ISU), revised Sep 2005. [Downloadable!]
  14. Michael Fertig & Lena Jacobi, 2007. "Die erleichterte Befristung älterer Arbeitnehmer/innen – Eine Evaluation mit Daten des Mikrozensus," AStA Wirtschafts- und Sozialstatistisches Archiv, Springer, vol. 1(3), pages 263-273, December. [Downloadable!] (restricted)
  15. Eckey, Hans-Friedrich & Schwengler, Barbara & Türck, Matthias, 2007. "Vergleich von deutschen Arbeitsmarktregionen," IAB Discussion Paper 200703, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]. [Downloadable!]
  16. Jahn, Elke J., 2005. "Wie wirkt der Kündigungsschutz? (What are the effects of employment protection?)," Zeitschrift für ArbeitsmarktForschung - Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 38(2/3), pages 284-304. [Downloadable!]
  17. Burgert, Derik, 2005. "The Impact of German Job Protection Legislation on Job Creation in Small Establishments - An Application of the Regression Discontinuity Design," MPRA Paper 5971, University Library of Munich, Germany. [Downloadable!]
  18. Hohendanner, Christian, 2007. "Verdrängen Ein-Euro-Jobs sozialversicherungspflichtige Beschäftigung in den Betrieben?," IAB Discussion Paper 200708, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]. [Downloadable!]
  19. Alda, Holger & Bender, Stefan & Gartner, Hermann, 2005. "The linked employer-employee dataset of the IAB (LIAB)," IAB Discussion Paper 200506, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]. [Downloadable!]
  20. Boris Augurzky & Harald Tauchmann, 2008. "Less Social Health Insurance – More Private Supplementary Insurance? – Empirical Evidence from Germany," Ruhr Economic Papers 0046, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen. [Downloadable!]
  21. Kruppe, Thomas, 2006. "Die Förderung beruflicher Weiterbildung : eine mikroökonometrische Evaluation der Ergänzung durch das ESF-BA-Programm," IAB Discussion Paper 200621, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]. [Downloadable!]
  22. Burgert, Derik, 2005. "Schwellenwerte im deutschen Kündigungsschutzrecht Ein Beschäftigungshindernis für kleine Unternehmen?," MPRA Paper 5969, University Library of Munich, Germany. [Downloadable!]
  23. Uta Schönberg & Johannes Ludsteck, 2007. "Maternity Leave Legislation, Female Labor Supply, and the Family Wage Gap," IZA Discussion Papers 2699, Institute for the Study of Labor (IZA). [Downloadable!]
  24. Laszlo Goerke & Markus Pannenberg, 2005. "Severance Pay and the Shadow of the Law : Evidence for West Germany," Discussion Papers of DIW Berlin 541, DIW Berlin, German Institute for Economic Research. [Downloadable!]
    Other versions:
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