Labor Concessions and Saving Jobs: Lessons from German Metalworking Industry.
Abstract: Against a background of increasing global competition, trade unions in industrialized countries are increasingly making concessions to firms in order to protect jobs. An important question is whether labor concessions do indeed save jobs and raise firm productivity. In this paper I estimate the effects of a recent labor concession made by Germany's largest manufacturing trade union: the increase in workweek to 40 hours for skilled workers in the metalworking industry as part of the 2004 Pforzheim Agreement. The policy raised the workweek more in West Germany than East Germany, leading me to use a difference-in-differences strategy to identify the causal effect of the labor concession of a longer workweek for skilled workers. Using firm panel data from the IAB Establishment Panel Survey for 2000-2008, I find that total employment in the average rm decreased as a result of the policy extending the workweek. Large firms, with over 500 workers at the policy's outset, benefited more from the policy - they are found to hire more skilled workers (but release more unskilled workers for a net reduction in employment), produce more for export markets and make higher prot, while smaller firms hire fewer skilled and unskilled workers, have lower sales and lower profit, due to the policy. Thus, not only was the 2004 Pforzheim Agreement extending the workweek for skilled workers ineffective at saving jobs, it also increased wage inequality between large and smaller firms. JEL Codes: J2, J5, L6,
Temporary Help Agencies and Their Effect on Firm Performance: Evidence from Germany.
Abstract: A series of legislative changes in Germany relaxed the restrictions on the use of temporary help workers between the mid 1980's and early 2000's. In this paper I analyze the 2002-2003 episode of temporary help sector deregulation, when the limitation on the length of the maximum period of assignment at a user firm was eliminated. Although the legislation applied to all regions in Germany, there is cross-regional variation in the prevalence of temporary help agencies at the outset, leading me to use a difference-in-differences strategy to identify the causal effect of temporary help sector deregulation. Using region level data from the Federal Employment Agency and Federal Statistical Office and the firm level from the IAB Establishment Data, I find an increase in the demand for temporary help workers and a decrease in the number of permanent employees at both region and firm level. Firms utilize temporary help workers to deal with the uctuations in the product demand and do not need to hoard labor as was done before. It is not clear whether this strategy helps decrease labor costs in the short run, but it helps avoid medium- and long-run non-wage labor costs, such as pensions and holidays allowances. There is no significant effect on firm performance as measured by sales, exports and a subjective measure of profits. JEL Codes: J2, J3, J4, J5
Work in Progress:
Health of Immigrants: Assimilation and Source Country Effects.
Abstract: I use the New Immigrant Survey to study the impact of assimilation and culture on immigrant health outcomes. I relate immigrant’s BMI to the source country average BMI, socioeconomic and demographic characteristics of immigrants and behavioral changes (change in diet, smoking, exercising pattern). Similar to other papers which have studied labor supply behavior female immigrants (Blau and Kahn (2011) and Fernandez and Fogli (2009), I find a substantial role for culture. Immigrants from high BMI countries are more likely to be overweight. While years in the U.S. increase BMI overall, the rate of convergence to natives is slower for immigrants who come from high BMI countries, possibly because their original diet is already similar to the U.S. diet.