Template-Type: ReDIF-Paper 1.0

Author-Name: Tim Kovalenko
Author-X-Name-First: Tim 
Author-X-Name-Last: Kovalenko

Title: Uncertainty shocks and employment fluctuations in Germany: the role of establishment size
	
Abstract: Uncertainty shocks are found to adversely affect labor market outcomes. Most studies attribute labor adjustments costs for the propagation of macroeconomic uncertainty to the labor market. Given that large establishments in Germany face higher labor adjustments cost, they should be affected more strongly by these shocks. Therefore, this paper studies the effects of uncertainty shocks on employment adjustments in large and small establishments employing four structural vector auto-regressive models with quarterly data for Germany
in the period 1991-2014. These four models estimate effects of uncertainty shocks on employment, worker flows, job flows as well as worker churn, both for establishments with less than 100 and with at least 100 employees. The results suggest that uncertainty shocks induce considerable employment fluctuations in large establishments, while they have barely an effect on small establishments. Furthermore, large establishments adjust their labor input in response to an uncertainty shock by delaying the replacement of workers who leave these establishments.

Length: 48 pages
Creation-Date:  2021-09
File-URL: http://www.bgpe.de/texte/DP/212_Kovalenko.pdf
File-Format: Application/pdf
File-Function: First version, 2021
Number: 212
Classification-JEL:  H24, H30, H71, R23, R28
Keywords: homeownership, housing subsidies, residential location choice, suburbanization
Handle: RePEc:bav:wpaper:212_Kovalenko