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Banking employment in Austria

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Abstract

The ongoing restructuring and consolidation process in the Austrian banking sector has drawn attention to banking employment developments. This article takes stock of the data on employment, labor costs and related indicators to provide a basis for discussion. Since 2008, the number of employees in banking has been on a slow, but permanent decline. Working hours have decreased even more strongly, reflecting a shift toward part-time work. Wage costs per employee are relatively high and have grown faster than those in most other sectors. However, until 2008, labor productivity growth outpaced labor cost growth. Since the crisis, labor cost growth has exceeded productivity increases, but less strongly than in the rest of the economy. Banks’ intensity of IT use has increased over the past 15 years. Not all IT investments were intended to substitute labor with capital. Instead, increasing IT usage in banks went hand in hand with a significant shift toward higher-skilled labor. Moreover, organizational changes related to the ongoing consolidation processes within the Austrian banking sector have contributed to the reduction in labor demand. Until recently, banks appear to have avoided layoffs, relying on attrition instead.

Suggested Citation

  • Doris Ritzberger-Grünwald & Alfred Stiglbauer & Walter Waschiczek, 2016. "Banking employment in Austria," Financial Stability Report, Oesterreichische Nationalbank (Austrian Central Bank), issue 32, pages 80-100.
  • Handle: RePEc:onb:oenbfs:y:2016:i:32:b:2
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    File URL: https://www.oenb.at/dam/jcr:474f0eaa-3ead-4302-b83e-84b63397caa7/fsr_32_special%20topics_02.pdf
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    References listed on IDEAS

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    1. Thomas Philippon & Ariell Reshef, 2013. "An International Look at the Growth of Modern Finance," Journal of Economic Perspectives, American Economic Association, vol. 27(2), pages 73-96, Spring.
    2. Robert Inklaar & J. Christina Wang, 2013. "Real Output of Bank Services: What Counts is What Banks Do, Not What They Own," Economica, London School of Economics and Political Science, vol. 80(317), pages 96-117, January.
    3. Susanto Basu & Robert Inklaar & J. Christina Wang, 2011. "The Value Of Risk: Measuring The Service Output Of U.S. Commercial Banks," Economic Inquiry, Western Economic Association International, vol. 49(1), pages 226-245, January.
    4. Martin Falk & Yvonne Wolfmayr, 2008. "The Impact of Outward FDI in Central and Eastern Europe on Employment in the EU-15 Countries," FIW Research Reports series I-016, FIW.
    5. Claudia Kwapil, 2009. "Responses of Austrian Firms to a Decline in Demand – Results of a Company Survey," Monetary Policy & the Economy, Oesterreichische Nationalbank (Austrian Central Bank), issue 2, pages 68-82.
    6. Ben Craig, 1997. "The long-run demand for labor in the banking industry," Economic Review, Federal Reserve Bank of Cleveland, issue Q III, pages 23-33.
    7. Maarten Goos & Alan Manning & Anna Salomons, 2014. "Explaining Job Polarization: Routine-Biased Technological Change and Offshoring," American Economic Review, American Economic Association, vol. 104(8), pages 2509-2526, August.
    8. Everett, Mary & McNeill, Joe & Phelan, Gillian, 2013. "Measuring the Value Added of the Financial Sector in Ireland," Quarterly Bulletin Articles, Central Bank of Ireland, pages 85-98, April.
    9. repec:dgr:rugggd:gd-119 is not listed on IDEAS
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    1. repec:onb:oenbfs:y:2017:i:34:b:1 is not listed on IDEAS

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    Keywords

    banking; employment; labor costs; value added; Austria;

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure

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