Kiel Working Papers, Kiel Institute for World Economics
No 1545:
They Are Even Larger! More (on) Puzzling Labor Market Volatilities
Hermann Gartner, Christian Merkl and Thomas Rothe
Abstract: This paper shows that the German labor market is more
volatile than the US labor market. Specifically, the volatility of the
cyclical component of several labor market variables (e.g., the job-finding
rate, labor market tightness, and job vacancies) divided by the volatility
of labor productivity is roughly twice as large as in the United States. We
derive and simulate a simple dynamic labor market model with heterogeneous
worker productivity. This model is able to explain the higher German labor
market volatilities by a longer expected job duration
Keywords: multinational enterprises, firm heterogeneity, industry characteristics, sector-specific FDI, vertical and horizontal FDI; (follow links to similar papers)
JEL-Codes: J6,; E24,; E32; (follow links to similar papers)
28 pages, September 2009
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