![]() |
| Das Dokument ist frei verfügbar |
|
| | Nachweis | Kein Nachweis verfügbar |
|
| We examine effects of government-imposed employment targets on firm behavior. Theoretically such policies create "polarization " causing low-productivity firms to exit the market while others temporarily distort their employment upward. Dynamically firms are incentivized to improve productivity to meet targets. Using novel data from East German firms post-privatization we find that firms with binding employment targets experienced 25% points higher annual employment growth a 1.1% points higher annual exit probability and 10% points higher annual productivity growth over the target period. Structural estimates reveal substantial misallocation of labor across firms and that subsidizing productivity growth would yield twice the long term increases in employment. |
|
|