We introduce dynamic incentive contracts into a model of unemployment dynamics and present three results. First, wage cyclicality from incentives does not dampen unemployment dynamics: the response of unemployment to shocks is first-order equivalent in an economy with flexible incentive pay and...

We study the impact of COVID-19 on firm performance. Using financial accounts of a large number of German firms, we document that industry affiliation is an important economic dimension of the crisis. Motivated by this fact, we analyze an important industry-specific regulation, system relevance,...

Using the approach suggested by Gabaix (Econometrica 2011) this paper demonstrates that idiosyncratic shocks in the largest firms are important for an understanding of aggregate volatility in German manufacturing industries. The implications of this finding for theoretical and empirical research...

This paper examines reforms in German employment protection for permanent workers (EPLP) on workers' well-being. Using variation in how the reforms affected firms of different sizes, I apply a difference-in-differences approach in conjunction with individual fixed effects. I find that life...

Using European Community Household Panel data for nine countries for 1996-2001, I investigate the impact of reforms of employment protection systems on employment and on temporary jobs for wage and salary workers. Individual fixed effects models are estimated, with the inclusion of...

Pundits around the world have criticized Germany for either trying to reshape Europe in its image or acting in its own self-interest. Germany has been accused of creating a new "empire," of pursuing a new Sonderweg, of "going global alone," of evasiveness, self-imposed isolation, and bullying....

Firms differ in the extent to which they use variable pay. Using U.S. employeeemployer matched data on variable pay from Glassdoor, we document such dispersion and find workers are exposed to firm-level shocks through variable pay. Credit rating downgrades from investment to speculative grade,...

Organisations centring their operations around human resources, in which skills are instrumental to the attainment of organisational goals, should create a climate to incentivise performance: the returns on any training depend on employee performance. To elicit such performance, organisations...

Pacts for employment and competitiveness are an integral component of the ongoing process of decentralization of collective bargaining in Germany, a phenomenon that has been hailed as key to that nation's economic resurgence. Yet little is known about the effects of pacts on firm performance....