Threshold Values in German Labor Law and Job Dynamics in Small Firms: The Case of the Disability Law

Wagner, Joachim; Schnabel, Claus; Kölling, Arnd

doi:10.2139/ssrn.288294

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Threshold Values in German Labor Law and Job Dynamics in Small Firms: The Case of the Disability Law

IZA Discussion Paper No. 386

19 Pages Posted: 28 Oct 2001 Last revised: 16 Apr 2023

See all articles by Joachim Wagner

Joachim Wagner

University of Lueneburg - Institute of Economics; Max Planck Society for the Advancement of the Sciences - Max Planck Institute for Economics; IZA Institute of Labor Economics

Claus Schnabel

University of Erlangen-Nuremberg; IZA Institute of Labor Economics

According to the German disability law, or Schwerbehindertengesetz, either six percent of all jobs in an establishment must be occupied by disabled empoyees or the firm has to pay a penalty of DM 200 per month for every job under consideration. This note reports results from the first econometric investigation of the impact of this rule on job dynamics in small firms. Based on data from the IAB Establishment Panel we find no clear-cut evidence that employment in establishments at the first threshold of the law reacts differently on demand shocks than establishments below or above the threshold.

Keywords: labor demand, Threshold values, disability law

JEL Classification: J23, J38

Suggested Citation: Suggested Citation

Wagner, Joachim and Schnabel, Claus and Kölling, Arnd, Threshold Values in German Labor Law and Job Dynamics in Small Firms: The Case of the Disability Law. IZA Discussion Paper No. 386, Available at SSRN: https://ssrn.com/abstract=288294 or http://dx.doi.org/10.2139/ssrn.288294