Extensive vs. Intensive Margin in Germany and the United States: Any Differences?

Christian Merkl and Dennis Wesselbaum

No 5117, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This paper analyzes the role of the extensive vis-à-vis the intensive margin of labor adjustment in Germany and in the United States. The contribution is twofold. First, we provide an update of older U.S. studies and confirm the view that the extensive margin (i.e., the adjustment in the number of workers) explains the largest part in the overall variability in aggregate hours. Second, although the German labor market structure is very different from its U.S. counterpart, the quantitative importance of the extensive margin is of similar magnitude.

Keywords: variance decomposition; business cycle; extensive and intensive margin (search for similar items in EconPapers)
JEL-codes: C10 E32 J21 (search for similar items in EconPapers)
Pages: 9 pages
Date: 2010-08
New Economics Papers: this item is included in nep-bec, nep-eur and nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

Published - published in: Applied Economics Letters, 2011, 18 (9), 805-808

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