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GDP-Employment Decoupling and the Productivity Puzzle in Germany

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  • Klinger, Sabine
  • Weber, Enzo

Abstract

This paper investigates the productivity puzzle in Germany. We focus on the time-varying relationship between German output and employment growth, in particular their decoupling in recent years. We estimate a correlated unobserved components model that allows for both persistent and cyclical time variation in the employment impact of GDP as well as an autonomous employment component capturing other factors than real output. As one result, we measure a permanent decline in GDP impact on employment as well as pronounced effects of the autonomous employment component in the recent years. The development of the estimated impact parameters depends on structural change, but also on labour availability and business expectations. Beyond GDP, a high labour supply, tightness as well as moderate wages and working time reductions boosted employment growth.

Suggested Citation

  • Klinger, Sabine & Weber, Enzo, 2015. "GDP-Employment Decoupling and the Productivity Puzzle in Germany," University of Regensburg Working Papers in Business, Economics and Management Information Systems 485, University of Regensburg, Department of Economics.
    • Handle: RePEc:bay:rdwiwi:31751
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    Cited by:

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    2. Gehrke, Britta & Lechthaler, Wolfgang & Merkl, Christian, 2019. "The German labor market during the Great Recession: Shocks and institutions," Economic Modelling, Elsevier, vol. 78(C), pages 192-208.
    3. Fritzsche, Birgit & Fuchs, Michaela & Orth, Anja Katrin, 2016. "Strukturbericht Sachsen-Anhalt," IAB-Regional. Berichte und Analysen aus dem Regionalen Forschungsnetz. IAB Sachsen-Anhalt-Thüringen 201603, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    4. Enzo Weber, 2015. "The Labour Market in Germany: Reforms, Recession and Robustness," De Economist, Springer, vol. 163(4), pages 461-472, December.
    5. Susanne Wanger & Roland Weigand & Ines Zapf, 2016. "Measuring hours worked in Germany – Contents, data and methodological essentials of the IAB working time measurement concept [Die Berechnung der geleisteten Arbeitsstunden in Deutschland – Inhalte,," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 49(3), pages 213-238, November.
    6. Robert Lehmann & Timo Wollmershäuser, 2016. "Zur Prognosegüte der gesamtwirtschaftlichen Stundenproduktivität," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 69(22), pages 57-61, November.
    7. repec:iab:iabfob:201508(en is not listed on IDEAS
    8. Hamann, Silke & Jahn, Daniel & Thoma, Oliver & Wapler, Rüdiger & Wittenburg, Stefan, 2015. "Übergänge von Arbeitslosigkeit in Beschäftigung," IAB-Regional. Berichte und Analysen aus dem Regionalen Forschungsnetz. IAB Baden-Württemberg 201501, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    9. Wolter, Marc Ingo & Mönnig, Anke & Hummel, Markus & Schneemann, Christian & Weber, Enzo & Zika, Gerd & Helmrich, Robert & Maier, Tobias & Neuber-Pohl, Caroline, 2015. "Industry 4.0 and the consequences for labour market and economy : scenario calculations in line with the BIBB-IAB qualifications and occupational field projections (Industrie 4.0 und die Folgen für Ar," IAB-Forschungsbericht 201508_en, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    10. Hutter, Christian & Weber, Enzo, 2017. "Labour market effects of wage inequality and skill-biased technical change in Germany," IAB-Discussion Paper 201705, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].

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    Keywords

    decoupling; productivity puzzle; unobserved components; time-varying coefficient; Verdoorn´s law;
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