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Firms’ Reactions to the Crisis and their Consequences for the Labour Market. Results of a Company Survey conducted in Austria

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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 in fluence the likelihood of dismissals.

Suggested Citation

  • Claudia Kwapil, 2010. "Firms’ Reactions to the Crisis and their Consequences for the Labour Market. Results of a Company Survey conducted in Austria," Working Papers 166, Oesterreichische Nationalbank (Austrian Central Bank).
    • Handle: RePEc:onb:oenbwp:166
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    File URL: https://www.oenb.at/dam/jcr:83af53b8-424f-4ca5-a35a-a9a989871bc1/wp166_tcm16-216689.pdf
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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. Hermann, Christoph., 2011. "Collective bargaining and balanced recovery : the case of Austria," ILO Working Papers 994667043402676, International Labour Organization.

    More about this item

    Keywords

    Wage Rigidity; Demand Shock; Micro Survey Data;
    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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