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Safeguarding Jobs through Labor Hoarding in Germany

Author

Listed:
  • Martin Dietz
  • Michael Stops
  • Ulrich Walwei

Abstract

As a consequence of the global financial crisis Germany has experienced the deepest slowdown of its economy since World War II. However, at least up to now the German labor market has not shown a strong reaction to the financial crisis. Given the sharp decrease in GDP the levels of employment and unemployment are still quite stable. One possible reason for the recent development is an increased level of labor hoarding, indicating that firms do not immediately adjust labor input in line with demand for their products. The paper uses both aggregate and firm-level data in order to examine the extent to which labor hoarding has contributed towards stabilizing the labor market during periods of recession. In addition, we examine the extent to which subsidized types of labor hoarding, such as short-time work, may have facilitated the retention of workers by employers. The paper shows that labor hoarding has been of certain relevance for the German labor market in times of economic slack. This is obviously true during the current crisis. Nevertheless, short-time work has also been used by firms which were not suffering significantly from an underutilization of their capacities. To avoid windfall gains the state should consider more effective targeting systems or advocate functional equivalents such as more flexibility in working time. Comment by Olaf Hübler.

Suggested Citation

  • Martin Dietz & Michael Stops & Ulrich Walwei, 2010. "Safeguarding Jobs through Labor Hoarding in Germany," Applied Economics Quarterly (formerly: Konjunkturpolitik), Duncker & Humblot, Berlin, vol. 61(Supplemen), pages 125-166.
  • Handle: RePEc:aeq:aeqaeq:v61_y2010_is_q5_p125-166
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    Citations

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    Cited by:

    1. Olga Bohachova & Bernhard Boockmann & Claudia M. Buch, 2011. "Labor Demand During the Crisis: What Happened in Germany?," CESifo Working Paper Series 3625, CESifo Group Munich.
    2. Alexander Herzog-Stein & Fabian Lindner & Simon Sturn & Till van Treeck, 2010. "Vom Krisenherd zum Wunderwerk?," IMK Report 56-2010, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute.
    3. Sandrine Cazes & Sher Verick & Fares Al Hussami, 2013. "Why did unemployment respond so differently to the global financial crisis across countries? Insights from Okun’s Law," IZA Journal of Labor Policy, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 2(1), pages 1-18, December.
    4. Susanne Wanger & Roland Weigand & Ines Zapf, 2016. "Measuring hours worked in Germany – Contents, data and methodological essentials of the IAB working time measurement concept
      [Die Berechnung der geleisteten Arbeitsstunden in Deutschland – Inhalte,
      ," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 49(3), pages 213-238, November.
    5. Xavier Giroud & Holger M. Mueller, 2017. "Firm Leverage, Consumer Demand, and Employment Losses during the Great Recession," Working Papers 17-01, Center for Economic Studies, U.S. Census Bureau.
    6. Piotr Lewandowski & Iga Magda & Jan Baran & Olena Fedyuk & Attila Bartha, 2013. "Gender Dimensions of the Labour Markets over the Past Two Decades," IBS Working Papers 1/2013, Instytut Badan Strukturalnych.
    7. Cazes, Sandrine. & Verick, Sher. & Al Hussami, Fares., 2011. "Diverging trends in unemployment in the United States and Europe : evidence from Okun's law and the global financial crisis," ILO Working Papers 994676293402676, International Labour Organization.
    8. Bellmann Lutz & Hübler Olaf, 2014. "The Skill Shortage in German Establishments Before, During and After the Great Recession," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 234(6), pages 800-828, December.
    9. Eichhorst, Werner & Giulietti, Corrado & Guzi, Martin & Kendzia, Michael J. & al., et, 2011. "Report No. 40: The Integration of Migrants and its Effects on the Labour Market," IZA Research Reports 40, Institute for the Study of Labor (IZA).
    10. Sandra M. Leitner & Robert Stehrer, 2012. "Labour Hoarding during the Crisis: Evidence for selected New Member States from the Financial Crisis Survey," wiiw Working Papers 84, The Vienna Institute for International Economic Studies, wiiw.
    11. Susanne Wanger, 2013. "Arbeitszeit und Arbeitsvolumen in Deutschland – Methodische Grundlagen und Ergebnisse der Arbeitszeitrechnung," AStA Wirtschafts- und Sozialstatistisches Archiv, Springer;Deutsche Statistische Gesellschaft - German Statistical Society, vol. 7(1), pages 31-69, August.
    12. Dietz, Martin & Stops, Michael & Walwei, Ulrich, 2012. "Securing Jobs in Times of Recession. The German Experience during the Financial Crisis 2008/2009/Asegurando los puestos de trabajo en tiempos de recesión. La experiencia alemana durante la crisis fina," Estudios de Economía Aplicada, Estudios de Economía Aplicada, vol. 30, pages 59-100, Abril.
    13. repec:wfo:wstudy:42955 is not listed on IDEAS
    14. Holtemöller, Oliver & Brautzsch, Hans-Ulrich & Drechsel, Katja & Drygalla, Andrej & Giesen, Sebastian & Hennecke, Peter & Kiesel, Konstantin & Loose, Brigitte & Meier, Carsten-Patrick & Zeddies, Götz, 2015. "Ökonomische Wirksamkeit der Konjunktur stützenden finanzpolitischen Maßnahmen der Jahre 2008 und 2009. Forschungsvorhaben im Auftrag des Bundesministeriums der Finanzen," IWH Online 4/2015, Halle Institute for Economic Research (IWH).
    15. Wix, Carlo, 2017. "The long-run real effects of banking crises: Firm-level investment dynamics and the role of wage rigidity," SAFE Working Paper Series 189, Research Center SAFE - Sustainable Architecture for Finance in Europe, Goethe University Frankfurt.
    16. repec:ilo:ilowps:467629 is not listed on IDEAS

    More about this item

    Keywords

    Labor hoarding; economic crisis; employment; public policy;

    JEL classification:

    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy

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