Product Market Deregulation and Employment Outcomes: Evidence from the German Retail Sector

Charlotte Senftleben-König ()
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Charlotte Senftleben-König: Humboldt-Universitaet zu Berlin

No 2014009, BDPEMS Working Papers from Berlin School of Economics

Abstract: This paper investigates the effects of the deregulation of business hours legislation on retail employment in Germany. In 2006, the legislative power was shifted from the federal to the state level, leading to a gradual deregulation of shop opening restrictions in most of Germany’s sixteen federal states. The paper exploits intra-country regional variation in the liberalization of closing laws in order to identify the effect of product market deregulation on retail employment. I report evidence that the deregulation had moderately negative effects on retail employment, leading to a loss of 19,000 full-time equivalent jobs. These job losses are concentrated among small establishments and are almost exclusively borne by full-time employees. I further show that the number of small stores significantly reduced, implying that deregulation has induced structural changes within the retail sector. These results are robust to various checks, including placebo tests and variations in model specifications. Robust effects on sales or prices were not detected. Creation Date: 2014-12-09

Keywords: Product market regulation; Employment; Retail trade (search for similar items in EconPapers)
JEL-codes: J21 L51 L81 (search for similar items in EconPapers)
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