Is the German Labor Market Granular?

Kovalenko T, Schnabel C, Stüber H (2020)

Publication Language: English

Publication Type: Journal article

Publication year: 2020


DOI: 10.1080/13504851.2020.1855300


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

Related research project(s)

How to cite


Kovalenko, T., Schnabel, C., & Stüber, H. (2020). Is the German Labor Market Granular? Applied Economics Letters.


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

BibTeX: Download