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Labor Demand Responses to Changing Gas Prices

Author

Listed:
  • Bossler Mario

    (Julius-Maximilian-University Wuerzburg (JMU Wuerzburg), Institute for Employment Research (IAB), Institute of Labor Economics (IZA) and Labor and Socio-Economic Research Center of the University of Erlangen-Nuremberg (LASER), JMU Wuerzburg, Sanderring 2, 97070 Wuerzburg, Germany)

  • Moog Alexander

    (Johannes Gutenberg-University Mainz (JGU Mainz), JGU Mainz, Jakob-Welder-Weg 4, 55128 Mainz, Germany)

  • Schank Thorsten

    (Johannes Gutenberg-University Mainz (JGU Mainz), Institute of Labor Economics (IZA), and Labor and Socio-Economic Research Center of the University of Erlangen-Nuremberg (LASER), JGU Mainz, Jakob-Welder-Weg 4, 55128 Mainz, Germany)

Abstract

In course of the current energy crisis, the consequences of increasing gas prices are heavily discussed. To date, however, there is no evidence of the impact of gas prices on the labor market. Using administrative employment data from 2012 to 2020, we find for manufacturing establishments a gas price elasticity of labor demand of −0.02, likely reflecting a scale effect. We also show that a rise in the gas price leads to an increase in establishment closure. A negative impact of the gas price on wages of 2 percent is consistent with rent-sharing.

Suggested Citation

  • Bossler Mario & Moog Alexander & Schank Thorsten, 2023. "Labor Demand Responses to Changing Gas Prices," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 23(4), pages 1073-1080, October.
    • Handle: RePEc:bpj:bejeap:v:23:y:2023:i:4:p:1073-1080:n:14
    DOI: 10.1515/bejeap-2023-0114
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    References listed on IDEAS

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    1. Marin, Giovanni & Vona, Francesco, 2021. "The impact of energy prices on socioeconomic and environmental performance: Evidence from French manufacturing establishments, 1997–2015," European Economic Review, Elsevier, vol. 135(C).
    2. Hille, Erik & Möbius, Patrick, 2019. "Do energy prices affect employment? Decomposed international evidence," Journal of Environmental Economics and Management, Elsevier, vol. 96(C), pages 1-21.
    3. Cox, Michael & Peichl, Andreas & Pestel, Nico & Siegloch, Sebastian, 2014. "Labor demand effects of rising electricity prices: Evidence for Germany," Energy Policy, Elsevier, vol. 75(C), pages 266-277.
    4. Gert Bijnens & Jozef Konings & Stijn Vanormelingen, 2022. "The impact of electricity prices on European manufacturing jobs," Applied Economics, Taylor & Francis Journals, vol. 54(1), pages 38-56, January.
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    More about this item

    Keywords

    elasticity; establishment closure; gas price; labor demand; wages;
    All these keywords.

    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • Q31 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Demand and Supply; Prices

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