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Firms' reactions to the crisis and their consequences for the labour market. Results of a company survey conducted in Austria

Author

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  • Kwapil, Claudia

Abstract

This article is based on the results of two company surveys - the first was conducted in 2007, before the recession 2008/2009 hit Austria, and the second was conducted in 2009 shortly after the trough of it. We analyse firms' reactions to the crisis and focus on their labour market relevant decisions. Although base wages were cut more frequently than in economically calm times, wage reductions continued to be the exception rather than the rule. This indicates the existence of nominal wage rigidities in Austria. Instead of wage cuts, firms preferred to reduce working hours and to dismiss employees. We find that firm specific characteristics as well as characteristics of the workforce help explaining a firm's probability of dismissing employees. However, the force of the shock by which an individual firm is hit (during the 2008/2009 recession) does not influence the likelihood of dismissals. JEL Classification: C25, E24, J30

Suggested Citation

  • Kwapil, Claudia, 2010. "Firms' reactions to the crisis and their consequences for the labour market. Results of a company survey conducted in Austria," Working Paper Series 1274, European Central Bank.
    • Handle: RePEc:ecb:ecbwps:20101274
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    Citations

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    Cited by:

    1. Thomas Y. Mathä & Stephen Millard & Tairi Rõõm & Ladislav Wintr & Robert Wyszyński, 2021. "Shocks and labour cost adjustment: evidence from a survey of European firms," Oxford Economic Papers, Oxford University Press, vol. 73(3), pages 1008-1033.
    2. repec:ilo:ilowps:466704 is not listed on IDEAS
    3. Bergin, Adele & Kelly, Elish & McGuinness, Seamus, 2012. "Explaining Changes in Earnings and Labour Costs During the Recession," Papers EC9, Economic and Social Research Institute (ESRI).
    4. Patrick Lünnemann & Thomas Y. Mathä, 2011. "How do firms adjust in a crisis? Evidence from a survey among Luxembourg firms," BCL working papers 70, Central Bank of Luxembourg.
    5. Delphine Brochard & Corinne Perraudin, 2017. "Crisis adjustment strategies in France: The contribution of establishment-level data," Post-Print hal-03227744, HAL.
    6. Delphine Brochard & Corinne Perraudin, 2017. "Crisis adjustment strategies in France: The contribution of establishment-level data," Economie et Statistique / Economics and Statistics, Institut National de la Statistique et des Etudes Economiques (INSEE), issue 494-495-4, pages 201-217.
    7. Delphine Brochard & Corinne Perraudin, 2017. "Crisis adjustment strategies in France: The contribution of establishment-level data," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-03227744, HAL.
    8. Hermann, Christoph., 2011. "Collective bargaining and balanced recovery : the case of Austria," ILO Working Papers 994667043402676, International Labour Organization.
    9. Marina Kunovac & Andreja Pufnik, 2015. "Features of the Labour Market and Wage Setting in Croatia: Firms Survey Results," Surveys 19, The Croatian National Bank, Croatia.

    More about this item

    Keywords

    demand shock; micro survey data; wage rigidity;
    All these keywords.

    JEL classification:

    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General

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