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Labor Demand Responses to Changing Gas Prices

Author

Listed:
  • Bossler, Mario

    (Institute for Employment Research (IAB), Nuremberg)

  • Moog, Alexander

    (University of Mainz)

  • Schank, Thorsten

    (University of Mainz)

Abstract

In course of the current energy crisis, the consequences of increasing gas prices are heavily discussed. To date, however, there is no evidence of the impact of gas prices on the labor market. Using administrative employment data from 2012–2020, we find for manufacturing establishments a gas price elasticity of labor demand of −0.02, likely reflecting a scale effect. We also show that a rise in the gas price leads to an increase in establishment closure. A negative impact of the gas price on wages of 2 percent is consistent with rent-sharing.

Suggested Citation

  • Bossler, Mario & Moog, Alexander & Schank, Thorsten, 2023. "Labor Demand Responses to Changing Gas Prices," IZA Discussion Papers 16015, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp16015
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    References listed on IDEAS

    as
    1. Hille, Erik & Möbius, Patrick, 2019. "Do energy prices affect employment? Decomposed international evidence," Journal of Environmental Economics and Management, Elsevier, vol. 96(C), pages 1-21.
    2. Giovanni Marin & Francesco Vona, 2017. "The Impact of Energy Prices on Employment and Environmental Performance: Evidence from French Manufacturing Establishments," Working Papers 2017.53, Fondazione Eni Enrico Mattei.
    3. Cox, Michael & Peichl, Andreas & Pestel, Nico & Siegloch, Sebastian, 2014. "Labor demand effects of rising electricity prices: Evidence for Germany," Energy Policy, Elsevier, vol. 75(C), pages 266-277.
    4. Gert Bijnens & Jozef Konings & Stijn Vanormelingen, 2022. "The impact of electricity prices on European manufacturing jobs," Applied Economics, Taylor & Francis Journals, vol. 54(1), pages 38-56, January.
    5. Marin, Giovanni & Vona, Francesco, 2021. "The impact of energy prices on socioeconomic and environmental performance: Evidence from French manufacturing establishments, 1997–2015," European Economic Review, Elsevier, vol. 135(C).
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    labor demand; gas price; elasticity; wages; establishment closure;
    All these keywords.

    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • Q31 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Demand and Supply; Prices

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