Input Demand and the Shortand Long-Run Employment Thresholds: An Empirical Analysis for the German Manufacturing Sector

Flaig, Gebhardt; Rottmann, Horst

doi:10.1111/1468-0475.00045

Cited by 14 publications

(11 citation statements)

References 3 publications

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“…37,38 Table 5 summarizes the main results for the adjustment coefficient and elasticities of the several models in this study. As mentioned already, the values are in line with previous studies for Germany such as Addison and Teixeira (2005), Bellmann and Pahnke (2006), Bohachova et al (2011), Breitung (1992), Buch and Lipponer (2010), Flaig and Rottmann (2001), Flaig and Steiner (1989), Franz and König (1986), Fuchs (2010), Koellreuter (1980), Kölling (1998), Pfeiffer (1999) as well as Rottmann and Ruschinski (1998). These studies differ in database, observation period, observed regions, analyzed sectors, estimation approaches and the specification of adjustment costs.…”

Section: Tablesupporting

confidence: 92%

“…Both estimations indicate fixed and convex, asymmetric adjustment costs. Furthermore, the elasticities for turnover and wage in the production sector are in line with Flaig and Rottmann (2001) as well as Pfeiffer (1999). 38 The functional form of firms' adjustment costs varies with plant size.…”

Section: Tablesupporting

confidence: 79%

“…These studies differ in database, observation period, observed regions, analyzed sectors, estimation approaches and the specification of adjustment costs. While Flaig and Rottmann (2001), Flaig and Steiner (1989), Koellreuter (1980), as well as Pfeiffer (1999) use a static estimation approach, other studies employ a dynamic approach. 36 Note that the Theil U statistic is used as a measure for the predictive power in the same way as in the analysis of the model with purely convex adjustment costs.…”

Section: Tablementioning

confidence: 99%

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Employment adjustment in German firms

Jung

2014

J Labour Market Res

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Using a representative establishment data set for Germany, I show that, in line with the existing literature for several countries, firms' 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, I find that the adjustment speed was higher in the second business cycle indicating that adjustment costs have fallen in recent years. Keywords Adjustment costs • Dynamic labor demand • Employment adjustment • Germany JEL Classification C24 • D22 • E24 • J23 Betriebliche Beschäftigungsanpassung in Deutschland Zusammenfassung Anhand von repräsentativen Daten des IAB-Betriebspanels wird gezeigt, dass die Kosten der betrieblichen Beschäftigungsanpassung in Deutschland eine The author would like to thank Martina Eschelbach, Boris Hirsch, Claus Schnabel, Michael Zibrowius, two anonymous referees as well as participants at the IAB Establishment Panel Survey Conference, the 5th Ph.D.

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Section: Tablesupporting

confidence: 92%

Section: Tablesupporting

confidence: 79%

Section: Tablementioning

confidence: 99%

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Employment adjustment in German firms

Jung

2014

J Labour Market Res

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“…Imported and domestic materials as well as purchased services benefit more from output growth than the different skill types of labour. The output elasticities of the different skill levels range between 0.38 for medium-skilled workers and 0.53 for highly skilled workers, while the output elasticities of imported Flaig and Rottmann (2001) and Koebel et al (2000) using a similar data set. 11 The low output elasticities of labour demand can be interpreted as evidence of ''jobless growth'', indicating that output growth must be substantial in order to create jobs, given the negative effects of a wage increase and laboursaving technological change on unskilled labour.…”

Section: Resultsmentioning

confidence: 99%

Outsourcing, Imports and Labour Demand

Falk

Koebel

2002

Scandinavian J Economics

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This paper examines the effects of purchased services and imported intermediate materials on the labour demand for different skills in German manufacturing sectors. We derive and estimate a factor demand system based on the generalised Box-Cox cost function nesting both the normalised quadratic and the translog functional form. We find that the impacts of output and capital growth are more important in explaining the demand for heterogeneous labour than substitution effects between labour and non-labour inputs. Similarly, the increasing use of both imported materials and purchased services is a consequence of output growth rather than input substitution.

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“…using a similar data set. 11 The low output elasticities of labour demands can be interpreted as evidence for "jobless growth", pointing out that output growth must be substantial in order to create jobs, given the negative effects of wage increase and labour-saving technological change for unskilled labour.…”

Section: Resultsmentioning

confidence: 99%

Outsourcing of Services, Imported Materials and the Demand for Heterogeneous Labour: An Application of a Generalised Box-Cox Function

Falk

Koebel

2003

SSRN Journal

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Die Discussion Papers dienen einer möglichst schnellen Verbreitung von neueren Forschungsarbeiten des ZEW. Die Beiträge liegen in alleiniger Verantwortung der Autoren und stellen nicht notwendigerweise die Meinung des ZEW dar.Discussion Papers are intended to make results of ZEW research promptly available to other economists in order to encourage discussion and suggestions for revisions. The authors are solely responsible for the contents which do not necessarily represent the opinion of the ZEW.Download this ZEW Discussion Paper from our ftp server:ftp://ftp.zew.de/pub/zew-docs/dp/dp0051.pdf A non-technical summaryOver the last decades manufacturers outsourced service inputs and shared resources with competitors. As a result service inputs have been the fastest growing input factor in German manufacturing, followed by imported materials and highly skilled labour. Based on input-output tables intermediate services and imported materials both at constant prices rose by 4.7 and 4.2 percent per year between 1978 and 1990. Most of the rise in intermediate services as a factor of production in manufacturing can be attributed to the growing importance of business services representing 45 percent of total intermediate services in 1990 compared to 35 percent in 1978. Within business services temporary personal supply services, consulting, legal service, accounting seems to be the fastest growing business services. For instance, between 1978 and 1998 the number of workers in personal supply services increased by 11 percent per year, the highest employment growth rate among all business service industries.For the U.S several empirical studies provide evidence that manufacturing firms contract out business services to realize labour cost savings. In particular, low skilled tasks are outsourced because manufacturing firms have no opportunity to pursue a different compensation strategy between skilled and unskilled workers. Most studies, however, focus on international outsourcing proxied by directly imported intermediate inputs or imported intermediate inputs purchased from the same two digit industry as the product being produced. Furthermore, outsourcing of services may also have an impact on the demand for skilled workers. Usually, outsourcing of services is motivated by the access to new skills. Therefore, it is also likely that skilled workers are replaced by outsourcing of services.This study constitutes the first attempt to examine the effects of the increasing use of service inputs as well as imported materials on heterogeneous labour demand. We analyse the substitution possibilities more completely than in previous studies. Furthermore, we formulate a new variant of a Box-Cox cost function nesting both the normalised quadratic and the translog functional form. The hypothesis that the increasing use of services in manufacturing contributed to the shift away from unskilled labour has only weak support. However, we found a significant substitution relationship between high-skilled labour and intermediate services. Th...

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Input Demand and the Shortand Long-Run Employment Thresholds: An Empirical Analysis for the German Manufacturing Sector

Cited by 14 publications

References 3 publications

Employment adjustment in German firms

Employment adjustment in German firms

Outsourcing, Imports and Labour Demand

Outsourcing of Services, Imported Materials and the Demand for Heterogeneous Labour: An Application of a Generalised Box-Cox Function

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