Job Creation and Job Destruction in a Regulated Labour Market: The Case of Austria

27 Pages Posted: 25 Sep 2002

See all articles by Florian Stahl

Florian Stahl

Mannheim Business School

Alfred Stiglbauer

Austrian National Bank

Rudolf Winter-Ebmer

Johannes Kepler University Linz - Department of Economics; Institute for Advanced Studies (IHS) - Department of Economics & Finance; Centre for Economic Policy Research (CEPR); IZA Institute of Labor Economics

Josef Zweimüller

University of Zurich - Department of Economics; Centre for Economic Policy Research (CEPR); CESifo (Center for Economic Studies and Ifo Institute); IZA Institute of Labor Economics

Date Written: August 2002

Abstract

We study Austrian job reallocation in the period of 1978-98, using a large administrative dataset where we correct for 'spurious' entries and exits of firms. We find that on average nine out of 100 randomly selected jobs were created within the last year, and that about nine out of randomly selected 100 jobs will be destroyed within the next year. Hence, Austrian job flows seem to be of comparable magnitude as in other countries, similar to the well-known results of Davis et al. (1996) for the United States. Job reallocation appears to be driven primarily by idiosyncratic shocks. However, job creation increases significantly during cyclical upswings whereas job destruction rises in downturns. We also find substantial persistence of job creation and destruction. We show that the pronounced pattern of job reallocation rates falling with firm size and age continues to hold when we use a set of controls. Finally, we show that - controlling for sector and for firm size composition - Austrian job reallocation rates are only half the rates for the US. This result is not surprising given the impact of tighter regulation and labor law in Austria.

Keywords: Labour reallocation, job flows, labour market regulation

JEL Classification: D21, J23, L11

Suggested Citation

Stahl, Florian and Stiglbauer, Alfred and Winter-Ebmer, Rudolf and Zweimueller, Josef, Job Creation and Job Destruction in a Regulated Labour Market: The Case of Austria (August 2002). CEPR Discussion Paper No. 3497. Available at SSRN: https://ssrn.com/abstract=333360

Florian Stahl (Contact Author)

Mannheim Business School ( email )

L 5, 2
Mannheim, 68131
Germany
+496211811563 (Phone)

HOME PAGE: http://quantmarketing.bwl.uni-mannheim.de/

Alfred Stiglbauer

Austrian National Bank ( email )

Otto-Wagner Platz 1
A-1011 Vienna
Austria

Rudolf Winter-Ebmer

Johannes Kepler University Linz - Department of Economics ( email )

Altenbergerstrasse 69
A-4040 Linz, 4040
Austria
+43 732 2468 8236 (Phone)
+43 732 2468 8238 (Fax)

HOME PAGE: http://www.econ.jku.at/winter

Institute for Advanced Studies (IHS) - Department of Economics & Finance ( email )

Stumpergasse 56
A-1060 Vienna, A-1060
Austria

HOME PAGE: http://www.ihs.ac.at

Centre for Economic Policy Research (CEPR)

London
United Kingdom

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Josef Zweimueller

University of Zurich - Department of Economics ( email )

Zuerich, 8006
Switzerland
+411 634 3724 (Phone)
+411 634 4907 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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