The macroeconomic dynamics of labour markets : a comparison between internal and external flexibility in the United States and Germany

Abstract

"The labour market in the United States is generally kept more flexible than that of Germany, both as regards adjustment to fluctuating economic trends and to structural changes in the economy. In general the main focus is on employment figures. Our analysis adds changes in working time, in the overall volume of work and in labour productivity to the picture and sets these factors into relationship with fluctuations in production. We examine the volatility and persistence of these variables from the macroeconomic perspective for the years 1990 to 2009 in both Germany and the United States. In doing so, assertions are made about the external flexibility - in the form of fluctuations in employment - as well as the internal flexibility - in the form of fluctuations in working time and labour productivity; this is also done with a view to their significance during the recent financial and economic crisis. The results suggest that there is a high measure of internal flexibility on the German labour market and that this is a consequence of high flexibility in working time and widespread labour hoarding. In the United States on the other hand, external flexibility is more strongly accentuated: here firms make adjustments via the number of employees." (Author's abstract, IAB-Doku) ((en))

Cite article

Schaz, P. & Spitznagel, E. (2010): Makroökonomische Dynamik von Arbeitsmärkten. Ein Vergleich interner und externer Flexibilitäten in den USA und in Deutschland. In: WSI-Mitteilungen, Vol. 63, No. 12, p. 626-635. DOI:10.5771/0342-300X-2010-12-626