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Extensive versus intensive margin in Germany and the United States: any differences?


  • Christian Merkl
  • Dennis Wesselbaum


This article analyses the role of the extensive vis-a-vis the intensive margin of labour adjustment in Germany and in the United States. The contribution is twofold. First, we provide an update of older US 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. Second, although the German labour market structure is very different from its US counterpart, the quantitative importance of the extensive margin is of similar magnitude.

Suggested Citation

  • Christian Merkl & Dennis Wesselbaum, 2011. "Extensive versus intensive margin in Germany and the United States: any differences?," Applied Economics Letters, Taylor & Francis Journals, vol. 18(9), pages 805-808.
  • Handle: RePEc:taf:apeclt:v:18:y:2011:i:9:p:805-808 DOI: 10.1080/13504851.2010.507170

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    References listed on IDEAS

    1. Batres-Marquez, S. Patricia & Jensen, Helen H. & Brester, Gary W., 2003. "Salvadoran Consumption of Ethnic Foods in the United States," Journal of Food Distribution Research, Food Distribution Research Society, vol. 34(02), July.
    2. J. Scott Shonkwiler & Steven T. Yen, 1999. "Two-Step Estimation of a Censored System of Equations," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 81(4), pages 972-982.
    3. Jeffrey T. LaFrance, 1990. "Incomplete Demand Systems And Semilogarithmic Demand Models," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 34(2), pages 118-131, August.
    4. Murphy, Kevin M & Topel, Robert H, 2002. "Estimation and Inference in Two-Step Econometric Models," Journal of Business & Economic Statistics, American Statistical Association, vol. 20(1), pages 88-97, January.
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    Cited by:

    1. Alexander Herzog-Stein & Patrick Nüß, 2016. "Extensive versus intensive margin over the business cycle: New evidence for Germany and the United States," IMK Working Paper 163-2016, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute.
    2. Kudoh, Noritaka & Miyamoto, Hiroaki & Sasaki, Masaru, 2015. "Employment and Hours over the Business Cycle in a Model with Search Frictions," IZA Discussion Papers 8946, Institute for the Study of Labor (IZA).
    3. repec:mes:emfitr:v:53:y:2017:i:1:p:128-149 is not listed on IDEAS
    4. Been-Lon Chen & Chih-Fang Lai, 2016. "Relative effects of labor taxes on employment and working hours: role of mechanisms shaping working hours," Journal of Economics, Springer, vol. 117(1), pages 49-84, January.
    5. Sumru Altug & Serdar Kabaca & Meltem Poyraz, 2011. "Search Frictions, Financial Frictions and Labor Market Fluctuations in Emerging Economies," Koç University-TUSIAD Economic Research Forum Working Papers 1136, Koc University-TUSIAD Economic Research Forum.
    6. Temel Taskin, 2013. "Intensive margin and extensive margin adjustments of labor market: Turkey versus United States," Economics Bulletin, AccessEcon, vol. 33(3), pages 2307-2319.
    7. Engler, Philipp, 2011. "Monetary policy and unemployment in open economies," Discussion Papers 2011/24, Free University Berlin, School of Business & Economics.
    8. Felix Hüfner & Caroline Klein, 2012. "The German Labour Market: Preparing for the Future," OECD Economics Department Working Papers 983, OECD Publishing.
    9. Mai Chi Dao, 2013. "International spillovers of labour market policies," Oxford Economic Papers, Oxford University Press, vol. 65(2), pages 417-446, April.
    10. Kohlbrecher, Britta, 2016. "Optimal Monetary Policy under Rigid Wages and Decreasing Returns," Annual Conference 2016 (Augsburg): Demographic Change 145867, Verein für Socialpolitik / German Economic Association.
    11. Sumru Altug & Serdar Kabaca, 2017. "Search Frictions, Financial Frictions, and Labor Market Fluctuations in Emerging Markets," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 53(1), pages 128-149, January.

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