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Lingering Illness or Sudden Death? Pre-Exit Employment Developments in German Establishments

Daniel Fackler (), Claus Schnabel () and Joachim Wagner ()
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Daniel Fackler: IWH Halle

No 7081, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Using a large administrative dataset for Germany, this paper compares employment developments in exiting and surviving establishments. For both West and East Germany we find a clear "shadow of death" effect reflecting lingering illness: establishments shrink dramatically already several years before closure, employment growth rates differ strongly between exiting and surviving establishments, and this difference becomes stronger as exit approaches. We further show that prior to exit the workforce becomes on average more skilled, more female and older in exiting compared to surviving establishments. These effects are more clearly visible in West than in East Germany. Our results also hold when applying a matching approach.

Keywords: firm exits; shadow of death; Germany (search for similar items in EconPapers)
JEL-codes: L2 D22 J65 (search for similar items in EconPapers)
Date: 2012-12
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Published in: Industrial and Corporate Change 2014, 23 (4), 1121-1140

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Related works:
Journal Article: Lingering illness or sudden death? Pre-exit employment developments in German establishments (2014) Downloads
Working Paper: Lingering illness or sudden death? Pre-exit employment developments in German establishments (2012) Downloads
Working Paper: Lingering illness or sudden death? Pre-exit employment developments in German establishments (2012) Downloads
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