Patterns of Unemployment Dynamics in Germany

Fixed search costs, that is, costs that do not vary with search duration, can amplify the cyclical volatility of the labor market. To assess the size of fixed costs, we analyze the relation between search costs and search duration using German establishment data. An instrumental variable estimation shows no relation between search duration and search costs. We conclude that search costs are mainly fixed costs. Furthermore, we show that a search and matching model, calibrated for Germany with fixed costs close to 75%, can generate labor market volatility that is consistent with the data.

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“…NOTES 1. For a detailed discussion about the volatility of the German labor market, see Gartner et al (2012) and Rahn and Weber (2019).…”

Section: Supplementary Materialsmentioning

confidence: 99%

A Note on the Relation Between Search Costs and Search Duration for New Hires

Carbonero

Gartner

2020

Macroecon. Dynam.

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“…34 These studies do not explicitly focus on the labor market responses. Exceptions are Ravn and Simonelli (2007), Monacelli et al (2010), and Rahn and Weber (2017). Monacelli et al (2010) show that an increase in government spending (of 1% of GDP) stabilizes unemployment by 0.43 percentage points when cumulated.…”

Section: The Results In Perspectivementioning

confidence: 97%

Fiscal Rules and Unemployment

Gehrke

2018

Macroecon. Dynam.

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. and consumption tax cuts are substantial, even though output multipliers turn out to be less than one. Second, multipliers for labor tax cuts are small. Third, fiscal rules enhance the positive effects of discretionary fiscal policy. However, these expansionary effects on the multipliers are modest compared to earlier studies. Terms of use: Documents in EconStor mayJEL Classification: E62, J20, C11

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“…In particular, our identification scheme does not rely on country-specific settings. This contributes to the growing literature implementing labour market dynamics into macroeconometric applications (compare Hairaulta and Zhutova, 2018;Rahn and Weber, 2019;Nordmeier, Schmerer and Weber, 2016;Fujita, 2011;Ravn and Simonelli, 2007).…”

Section: Introductionmentioning

confidence: 87%

Which factors were behind Germany's labour market upswing? A data‐driven approach*

et al. 2022

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Germany has experienced a strong and sustained labour market upswing since the mid-2000s. While various studies have highlighted different specific reasons for this development, this study contributes to the debate by simultaneously considering a broad set of candidate factors for the upswing in a unified methodological framework and systematically weighing them against each other on an empirical basis. We develop a structural macroeconometric framework that leaves as many of the systematic interlinkages as possible for empirical determination while operating with a minimal set of restrictions in order to identify economically meaningful shocks. For this purpose, we combine shortand long-run restrictions based on established assumptions on labour force development, technological change, and search and matching in the labour market. Matching efficiency, the intensity of job creation, the growing labour force, and the declining propensity to separate explain most of the German labour market upswing.

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Patterns of Unemployment Dynamics in Germany

Cited by 8 publications

References 39 publications

A Note on the Relation Between Search Costs and Search Duration for New Hires

A Note on the Relation Between Search Costs and Search Duration for New Hires

Fiscal Rules and Unemployment

Which factors were behind Germany's labour market upswing? A data‐driven approach*

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