Is the German Labor Market Granular?

Kovalenko T, Schnabel C, Stüber H (2020)

Publication Language: English

Publication Type: Journal article

Publication year: 2020

Journal

Applied Economics Letters Taylor & Francis (Routledge)

DOI: 10.1080/13504851.2020.1855300

Abstract

This paper is the first to investigate the relevance of the ‘granular hypothesis” proposed by Gabaix (Econometrica 2011) for employment growth. Using comprehensive data for Germany, we show that the establishment size distribution in terms of employment is indeed fat-tailed and that idiosyncratic shocks to large establishments explain a substantial portion of aggregate employment change. This relationship is more pronounced in the manufacturing than the service sector. Our findings may be an argument for stabilizing the largest establishments when hit by negative idiosyncratic shocks, since their employment fluctuations could spill over to aggregate employment growth.

Authors with CRIS profile

Tim Kovalenko Lehrstuhl für Volkswirtschaftslehre, insbesondere Arbeitsmarkt- und Regionalpolitik Claus Schnabel Lehrstuhl für Volkswirtschaftslehre, insbesondere Arbeitsmarkt- und Regionalpolitik Heiko Stüber Lehrstuhl für Volkswirtschaftslehre, insbesondere Makroökonomik

Related research project(s)

Wages, Heterogeneities, and Labor Market Dynamics SPP 1764: Der deutsche Arbeitsmarkt in der Globalisierung: Herausforderungen durch Handel, Technologie und Demografie Aug. 1, 2014 - Dec. 31, 2020

How to cite

APA:

Kovalenko, T., Schnabel, C., & Stüber, H. (2020). Is the German Labor Market Granular? Applied Economics Letters. https://doi.org/10.1080/13504851.2020.1855300

MLA:

Kovalenko, Tim, Claus Schnabel, and Heiko Stüber. "Is the German Labor Market Granular?" Applied Economics Letters (2020).

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