NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Firing Costs, Employment Fluctuations and Average Employment: An Examination of Germany

Jennifer Hunt

NBER Working Paper No. 4825
Issued in August 1994
NBER Program(s):   LS

West Germany's Employment Promotion Act of 1985 facilitated the use of fixed term contracts and increased the number of dismissals above which the employer is required to establish a 'social plan' (involving severance payments). The effect of this reduction in 'firing costs' on movements in employment is assessed using manufacturing data by detailed industry for the period 1977-1992: a dynamic specification using the data as a panel, and allowing coefficients to vary by industry (random coefficients) is employed. Compared to the 1977-1981 period, adjustment of blue collar hours was more flexible from 1982-1988, and less flexible in the subsequent period. There is weaker evidence that adjustment of blue collar workers became less flexible in the years following the new legislation and that white collar workers' flexibility fluctuated over the period examined. The timing and direction of these changes, as well as the direction of relative changes in flexibility between industries with high and low sales variability, suggest they are not the result of the Employment Promotion Act.

download in pdf format
   (1447 K)

email paper

This paper is available as PDF (1447 K) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w4825

Published: Hunt, Jennifer. "Firing Costs, Employment Fluctuations And Average Employment: An Examination Of Germany," Economica, 2000, v67(266,May), 177-202. citation courtesy of

Users who downloaded this paper also downloaded these:
Hall w9967 Wage Determination and Employment Fluctuations
 
Publications
Activities
Meetings
NBER Videos
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us