|Title||Labour Market Institutions and Worker Flows: Comparing Germany and the US|
|Publication Type||Journal Article|
|Year of Publication||2014|
|Authors||Jung, Philip, and Kuhn, Moritz|
|Journal||The Economic Journal|
|Pagination||1317 - 1342|
|Keywords||Germany, labor market flows, unemployment, unemployment rate volatility, worker flows|
We compare labor market flows in the US and Germany between 1980 and 2004. In Germany, average worker flows in and out of unemployment are substantially lower; outflows are equally volatile in both countries; inflows are about twice as volatile in Germany and contribute more to the unemployment rate volatility. We explore four candidates for these differences: unemployment benefits; union bargaining power; employment protection and the efficiency of matching unemployed workers to open positions. We find that a lower matching efficiency in Germany can explain the bulk of the cross‐country differences. It amplifies the business cycle and adds persistence.