Documents Sell, Friedrich L. 3 results

"Utilizing the link between employment and price changes as a result of minimum wages, we use firm-level data to evaluate the effect of minimum wage introduction in the German construction sector. In East Germany we find significant positive price effects that exclude the possibility of rising employment. Rather, the results indicate the existence of a competitive sector-specific labour market, and thus declining employment. In contrast, we cannot find any significant price reaction for West Germany. This suggests that the implemented minimum wage in West Germany is too low in comparison to the predominantly paid wages and is hence not binding."

"In this paper, the authors present a new approach to estimate the impact of a minimum wage on the labor market of the construction sector in Germany. Instead of estimating the effect on employment, the authors focus on the change of prices on a firm level in order to differentiate between a competitive and a monopsonistic structured labor market. The composition of the sector-specific labor market serves again as a basis to evaluate whether the consequences of the minimum wage can be taken as economically advantageous or disadvantageous. Using firm data monthly conducted by the Ifo Institute for Economic Research, the estimations show that the minimum wage did have a different impact in East and West Germany. In East Germany, we find significant positive price effects of the minimum wage which exclude the possibility of positive employment effects due to monopsonistic structures. On the contrary, our results indicate a competitive sectorspecific labor market and declining employment. In contrast, there was no significant price reaction observed for West Germany. The minimum wage seems too low compared to the wages paid in the West German construction sector. Therefore, the introduction of the minimum wage cannot be assumed to be binding. "

"In the light of criticism of the failure of “mainstream” economics to predict and avert the global financial and economic crisis, the authors use panel data on 11 Eurozone countries for the period 2007–10 to investigate how two of the “traditional” tools of labour economics and macroeconomics – the Beveridge and Phillips curves – perform empirically under the “stress test” of global economic crisis. After confirming the reliability of these textbook relationships between unemployment and vacancy ratios, and unemployment and inflation, respectively, they explore the correlation between inflation and vacancies. Their findings on all three relationships highlight the complementarity of supply-side and demand-side policies to reduce unemployment."