Did recruitment problems account for the German job miracle?

Abstract

"The debate on the reasons for the robust response of the German labour market to the crisis includes the argument that those establishments that suffered the most from the crisis had experienced recruitment problems during the expansion before. Thus, they had an incentive to hoard labour, thereby avoiding the risk of re-hiring dismissed workers at very high costs after the crisis. This paper aims at testing the labour shortage - labour hoarding hypothesis empirically. We use a unique survey data set on German establishments and apply the propensity score matching approach to identify statistical twins that only differ with respect to their appreciation of labour shortage in the year 2008. We then compare the behaviour of firms with recruitment problems and their matched controls with respect to labour hoarding strategies such as the use of short-time work and other measures to reduce working time and wage costs. However, preliminary results suggest that after matching there are no significant differences in the response of the statistical twins to the crisis. Thus, we have to reject the hypothesis that recruitment problems were a major reason for the moderate response of German firms to the crisis." (Author's abstract, IAB-Doku) ((en))

Cite article

Klinger, S., Rebien, M., Heckmann, M. & Szameitat, J. (2011): Did recruitment problems account for the German job miracle? In: International review of business research papers, Vol. 7, No. 1, p. 265-281.