Posted by: Dirk | March 26, 2008

Germany: Jobs created and jobs destroyed

The Bundesagentur für Arbeit has assembled some statistics for job creation and destruction (Beschäftigte – begonnene und beendete Beschäftigungsverhältnisse). I commented on this before in the context of Caballero’s restructuring and the Austrian School. The emerging patterns are very interesting. Jason Faberman (2004, BLS) remarked:

I compare the behavior of job creation and job destruction over the past two economic downturns. Both periods have brief but sharp rises in job destruction followed by flat net job growth. The dynamics underlying these slow recoveries differ drastically. In 1991-92, job destruction is slow to decline. In 2001, job creation falls dramatically and remains persistently low through 2003. I find this trend qualitatively similar in both manufacturing and service industries. I also find that neither a structural shift of jobs across industries nor increased trade liberalization is a consistent explanation for the recent lack of growth. Instead, the evidence suggests that a large drop in business investment may explain the decline in job creation.

Germany underwent a period of slow growth in the years following 2000. Job creation constantly declined from year to year, until the trend reversed in 2006. This is also when job creation picked up again. It would be very interesting to see how the story goes on. However, the German data series stops in the second quarter of 2007:



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