The Economy, Crises, and the Labor Market
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The Economy, Crises, and the Labor Market
Can Institutions Serve as a Protective Shield for Employment?
Editors: Zimmermann, Klaus F. | Wey, Christian
Applied Economics Quarterly. Supplements, Vol. 61
(2010)
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Abstract
The year 2009 was marked by a deep global economic crisis triggered by turbulence on the financial markets. The crisis has affected different countries' economies to differing degrees. The impact on national labor markets was even more severe, and wider in scope, than the resulting economic slump itself. It appears likely that the different institutions are (at least partly) to blame.Against this backdrop, the 73rd ARGE meeting examined the relationships between institutions - labor market institutions but others as well - and labor market developments in times of crisis. The key question was whether and how institutions can serve as a "protective shield" for employment. The lectures focuses on the following aspects: European labor markets in international comparison, the role of labor market institutions in the crisis, labor market reforms and competition, labor force cohorts, meta-analysis of the minimum wage, and labor market regulation.
Table of Contents
| Section Title | Page | Action | Price |
|---|---|---|---|
| Editorial | 5 | ||
| Contents | 7 | ||
| Joachim Möller: Germany’s Job Miracle in the World Recession—Shock-Absorbing Institutions in the Manufacturing Sector | 9 | ||
| Abstract | 9 | ||
| 1. Introduction | 9 | ||
| 2. Production and Productivity in Manufacturing Industries before and after the Crisis | 10 | ||
| 3. Employment Dynamics and Labor Hoarding | 15 | ||
| 3.1 Employment Changes in Different Branches of the Economy | 15 | ||
| 3.2 The Theory of Labor Hoarding | 18 | ||
| 3.3 Labor Hoarding in Manufacturing Industries | 18 | ||
| 4. Shocks and Institutions | 23 | ||
| 4.1 Working-time Accounts and Alliances for Jobs | 23 | ||
| 4.2 Short-time Work Schemes | 25 | ||
| 5. Conclusions | 25 | ||
| References | 27 | ||
| Werner Eichhorst, Michael Feil, and Paul Marx: Crisis, What Crisis? Patterns of Adaptation in European Labor Markets | 29 | ||
| Abstract | 29 | ||
| 1. Introduction | 29 | ||
| 2. Labor Market Institutions and Labor Market Adjustment | 30 | ||
| 3. Mapping Patterns of Labor Market Flexibility | 32 | ||
| 4. Different Models of Flexibility and the Current Crisis | 36 | ||
| 5. Quantitative Analysis | 39 | ||
| 5.1 Assessing the Role of Labor Market Institutions | 39 | ||
| 5.2 Dynamic Simulations | 44 | ||
| 6. Case Studies | 47 | ||
| 6.1 Germany: Employment Stability despite Strong Export Orientation | 47 | ||
| 6.2 Denmark | 48 | ||
| 6.3 Spain | 50 | ||
| 6.4 United Kingdom | 51 | ||
| 7. Conclusion | 52 | ||
| References | 54 | ||
| Annex 1: Channels of Flexibility and Associated Indicators | 56 | ||
| Annex 2: Structure of the Composite Indicator with Scores for Sub-indicators (Circled Numbers) | 57 | ||
| Antje Mertens: Crisis, What Crisis? Patterns of Adaptation in European Labor Markets. Comment | 59 | ||
| Introduction | 59 | ||
| 1. Flexibility Indicators and External Functional Flexibility | 60 | ||
| 2. Quantitative Analysis | 60 | ||
| 3. Detailed Country Analysis | 61 | ||
| References | 63 | ||
| Jens Boysen-Hogrefe et al.: The Role of Labor Market Institutions in the Great Recession | 65 | ||
| Abstract | 65 | ||
| 1. Introduction | 65 | ||
| 2. Methodology | 67 | ||
| 3. Model Economy | 68 | ||
| 3.1 General Structure | 68 | ||
| 3.2 The Labor Market | 69 | ||
| 4. The Effects of Different Labor Market Institutions | 70 | ||
| 4.1 Firing Costs | 70 | ||
| 4.2 Short-Time Work | 73 | ||
| 4.3 Wage Formation | 76 | ||
| 5. Conclusions | 79 | ||
| References | 79 | ||
| Appendix: Data Sources | 80 | ||
| Claus Schnabel: The Role of Labor Market Institutions in the Great Recession. Comment | 83 | ||
| 1. Theoretical Modeling | 84 | ||
| 2. Empirical Analysis | 85 | ||
| 3. Further Labor Market Institutions and their Impact on Employment | 86 | ||
| 4. Conclusion | 87 | ||
| References | 87 | ||
| Alex Herzog-Stein / Camille Logeay: Labor Market Reforms, Hysteresis, and Business Cycles in Germany: A SVAR Approach to Explain Unemployment Developments | 89 | ||
| Abstract | 89 | ||
| 1. Introduction | 89 | ||
| 2. Labor Market Reforms in Germany | 91 | ||
| 3. Labor Market Institutions, Hysteresis, and Aggregate Demand: Theoretical Considerations and Empirical Evidence | 92 | ||
| 3.1 Institutions and Unemployment | 93 | ||
| 3.2 Hysteresis and Unemployment | 95 | ||
| 4. Labor Market Rigidity and the Beveridge Curve | 96 | ||
| 5. Institutional Factors, Business Cycles and Hysteresis: A Time Series Analysis | 98 | ||
| 5.1 Comparing Business Cycles: A Descriptive Comparative Approach | 98 | ||
| 5.2 VAR AND VECM Analyses: An Econometric Approach | 102 | ||
| 5.2.1 Description and Statistical Properties of the Data | 102 | ||
| 6. Econometric Results | 103 | ||
| 7. Conclusion | 112 | ||
| References | 113 | ||
| Appendix 1 | 116 | ||
| Appendix 2 | 117 | ||
| Appendix 3 | 118 | ||
| Jürgen Jerger: Labor Market Reforms, Hysteresis, and Business Cycles in Germany: A SVAR Approach to Explain Unemployment Developments. Comment | 121 | ||
| References | 123 | ||
| Martin Dietz / Michael Stops / Ulrich Walwei: Safeguarding Jobs through Labor Hoarding in Germany | 125 | ||
| Abstract | 125 | ||
| 1. Introduction | 125 | ||
| 2. Labor Hoarding as a Response to Economic Shocks | 126 | ||
| 3. The Impact of Labor Hoarding and Short-time Work from a Macro Perspective | 132 | ||
| 4. Labor Hoarding and Short-time Work at the Firm Level | 141 | ||
| 5. Conclusions | 145 | ||
| References | 147 | ||
| Olaf Hübler: Safeguarding Jobs through Labor Hoarding in Germany. Comment | 151 | ||
| 1. Introduction | 151 | ||
| 2. Arguments for and against Labor Hoarding and Short-time Work | 152 | ||
| 3. Problems with the Empirical Determination of Labor Hoarding | 153 | ||
| 4. Existing Empirical Evidence to Studies of Short-time Work | 156 | ||
| 5. New Results from the IAB Establishment Panel | 157 | ||
| 5.1 Database and Descriptive Statistics | 157 | ||
| 5.2 Econometric Results | 159 | ||
| 6. Conclusions | 164 | ||
| References | 165 | ||
| Bernhard Boockmann: The Combined Employment Effects of Minimum Wages and Labor Market Regulation—a Meta-Analysis | 167 | ||
| Abstract | 167 | ||
| 1. Introduction | 167 | ||
| 2. Meta-Analysis and Minimum Wage Research | 169 | ||
| 3. Data | 170 | ||
| 4. Empirical Model | 173 | ||
| 5. Results | 176 | ||
| 6. Interpretation and Conclusions | 180 | ||
| References | 181 | ||
| Appendix: Studies Included in the Sample | 183 | ||
| Alexandra Spitz-Oener: The Combined Employment Effects of Minimum Wages and Labor Market Regulation—a Meta-Analysis. Comment | 187 | ||
| References | 188 | ||
| Participants | 189 |