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Employment Adjustment in German Firms

  • Jung, Sven
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    Using a representative establishment data set for Germany, we show that, in line with the existing literature for several countries, fi rms' adjustment costs for employment are characterized by a fixed and convex functional form. Furthermore, they are asymmetric with dismissal costs exceeding hiring costs. An analysis of firms' adjustment in the period 1996-2010 also indicates that adjustment behavior has changed over time. Comparing the employment adjustment in the two observed business cycles comprising the years 1996-2003 and 2004-2010, we fi nd that the adjustment speed was higher in the second business cycle indicating that adjustment costs have fallen in recent years.

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    Paper provided by Verein für Socialpolitik / German Economic Association in its series Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order with number 79696.

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    Date of creation: 2013
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    Handle: RePEc:zbw:vfsc13:79696
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