Regional Origins of Employment Volatility: Evidence from German States

44 Pages Posted: 7 May 2008

See all articles by Claudia M. Buch

Claudia M. Buch

Deutsche Bundesbank

Martin Schlotter

Bavarian Ministry for Economic Affairs,Infrastructure, Transport an Technology

Date Written: May 1, 2008

Abstract

Openness for trade can have positive welfare effects in terms of higher growth. But increased openness may also increase uncertainty through a higher volatility of employment. We use regional data from Germany to test whether openness for trade has an impact on volatility. We find a downward trend in the unconditional volatility of employment, which has been interrupted by the re-unification period. Patterns are similar to those for output volatility. The conditional volatility of employment, measuring idiosyncratic developments across states, in contrast, has remained fairly unchanged. In contrast to evidence for the US, we do not find evidence for a significant link between employment volatility and trade openness.

Keywords: employment volatility, trade openness, regional labour markets

JEL Classification: F41, E32, R23

Suggested Citation

Buch, Claudia M. and Schlotter, Martin, Regional Origins of Employment Volatility: Evidence from German States (May 1, 2008). CESifo Working Paper Series No. 2296, Available at SSRN: https://ssrn.com/abstract=1130139 or http://dx.doi.org/10.2139/ssrn.1130139

Claudia M. Buch (Contact Author)

Deutsche Bundesbank ( email )

Wilhelm-Epstein-Str. 14
Frankfurt/Main, 60431
Germany

Martin Schlotter

Bavarian Ministry for Economic Affairs,Infrastructure, Transport an Technology ( email )

Prinzregentenstraße 28
Munich, Bavaria 01069
Germany
+49(0)8921622275 (Phone)

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