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 |
Volume | 124 |
Issue | 581 |
Pagination | 1317 - 1342 |
Date Published | 2014/// |
Keywords | Germany, labor market flows, unemployment, unemployment rate volatility, worker flows |
Abstract | 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. |
URL | http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2536176 |