Labour demand in Germany: an assessment on non-wage labour

Yu-Fu Chen, Michael Funke

    Research output: Working paperDiscussion paper

    41 Downloads (Pure)

    Abstract

    The data indicate that non-wage labour costs in Germany have reached a record high in recent years. From 1972 to 2001, the ratio of non-wage labour costs to direct compensation in West German manufacturing industry rose from 55.6% to 81.2%. The topic of non-wage labour costs is increasingly being discussed among and between the political parties because non-wage labour costs are likely to have major negative effects on employment. We follow the real options approach, which allows us to investigate the value to a firm of waiting to adjust labour when the firm´s revenues are stochastic and adjustment costs are sunk. Simulation exercises show that the interaction between hiring and firing costs, non-wage labour costs and uncertainty can have important ramifications for employment dynamics.
    Original languageEnglish
    PublisherUniversity of Dundee
    Publication statusPublished - 2003

    Publication series

    NameDundee Discussion Papers in Economics
    PublisherUniversity of Dundee
    No.154
    ISSN (Print)1473-236X

    Fingerprint

    Labour demand
    Labor
    Labour costs
    Germany
    Firing costs
    Interaction
    Uncertainty
    Revenue
    Real options
    Adjustment costs
    Political parties
    Simulation
    Employment dynamics
    Manufacturing industries
    Exercise

    Keywords

    • Real options
    • Labour demand
    • Non-wage labour costs
    • Hiring and firing costs
    • Germany

    Cite this

    Chen, Y-F., & Funke, M. (2003). Labour demand in Germany: an assessment on non-wage labour. (Dundee Discussion Papers in Economics; No. 154). University of Dundee.
    Chen, Yu-Fu ; Funke, Michael. / Labour demand in Germany: an assessment on non-wage labour. University of Dundee, 2003. (Dundee Discussion Papers in Economics; 154).
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    Chen, Y-F & Funke, M 2003 'Labour demand in Germany: an assessment on non-wage labour' Dundee Discussion Papers in Economics, no. 154, University of Dundee.

    Labour demand in Germany: an assessment on non-wage labour. / Chen, Yu-Fu; Funke, Michael.

    University of Dundee, 2003. (Dundee Discussion Papers in Economics; No. 154).

    Research output: Working paperDiscussion paper

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    Chen Y-F, Funke M. Labour demand in Germany: an assessment on non-wage labour. University of Dundee. 2003. (Dundee Discussion Papers in Economics; 154).