Temporary separations and firm size in the German labour market

Abstract

"The authors examine the impact of firm size on temporary separations in the German labour market. They distinguish between explicit temporary separations (Employment Interruptions) and implicit temporary separations (Temporary Layoffs) and study their co-existence and interdependence. They examine the interaction of Worker Councils, employment legislation and differential costs of separation to workers and firms, producing a rather idiosyncratic re-employment process. The Data they use originate from the Employment Statistics of the Institute for Employment Research of the German Employment Office. It comprises of a 0.1 percent representative sample of all individuals who have held a job liable to social security contributions between 1980 and 1990." "The results suggest that the German labour market provides a good combination of flexibility and employment protection legislation. It is clear that, despite all legislative constraints, Temporary Layoffs are extensively used for employment adjustments by firms. The results show that employment adjustments through Temporary Layoffs are constrained for larger firms. They also show that, when larger firms use Temporary Layoffs, they tend to recall their workers faster than smaller firms." (Author's abstract) ((en))

Cite article

Mavromaras, K. & Rudolph, H. (1998): Temporary separations and firm size in the German labour market. In: Oxford Bulletin of Economics and Statistics, Vol. 60, No. 2, p. 215-225.