Abstract

In Germany, about 160 labour laws and regulations apply only in establishments above a critical size, and usually these thresholds are defined by the number of employees (e. g. dismissal protection law). Because exceeding a threshold often result in costs for the firm, some suggest, that employment growth is dampened by firms avoiding to exceed thresholds. Using data from the Federal Labour Office and the IAB Establish-ment Panel I reassess this assumptions.