Michael Siegenthaler

Has Switzerland Really Been Marked by Low Productivity Growth? Hours Worked and Labor Productivity in Switzerland in a Long‐Run Perspective

This paper shows that previous work has understated Switzerlands performance in terms of labor productivity growth. First, available data on hours worked are incoherent and overestimate growth in hours worked. The paper therefore establishes a consistent series of total hours worked and its components covering 1950–2010, showing that Swiss labor inputs actually were stable from 1964 to 2007. Second, long�?term improvements in Switzerlands Terms of Trade indicate that quality improvements in Swiss exports might not be fully mirrored in growth of GDP and, hence, productivity growth.

Dividing the Pie: The Determinants of Labor’s Share of Income on the Firm Level

This paper is the first to study the factors determining labor’s share of income on the level of the individual firm, employing an unusually informative panel data set. The empirical examination is concerned with Switzerland which stands out as one of the very few developed countries with a stable labor share. Broadly confirming results from previous cross-country and industry-level studies, we find that the main factor decreasing the labor share in the estimation period is the increase in the share of workers using ICT in the firm. The main reasons why Switzerland’s labor share remained almost constant are its relatively slow-rate of technological progress and shifts towards industries with above-average labor shares.

Can a Standardized Aptitude Test Predict Training Success of Apprentices? Evidence from a Case Study in Switzerland

Due to a widely spread distrust in the signalling value of school grades, Swiss employers require external, standardized aptitude test results when recruiting new apprentices. However, the predictive quality of such test results has never been thoroughly researched. Therefore, this case study analyses whether external aptitude tests can improve the quality of predicting success in apprenticeship training. I find that such information is a) not correlated with school grades at the end of compulsory schooling but b) does not add information that would explain either the success in VET schooling (school grades in the first and second year of apprenticeship training), the probability of unexcused vocational school absences or the likelihood of a premature ending of the apprenticeship contract.

Dividing the Pie

The authors are the first to study the factors determining labor’s share of income on the level of the individual firm, employing an unusually informative panel data set. The empirical examination is concerned with Switzerland, which stands out as one of the very few developed countries with a stable labor share. Broadly confirming results from previous cross-country and industry-level studies, the authors find that the main factor decreasing the labor share between 2001 and 2010 was the increase in the firm’s share of workers using information and communication technology. The main reasons why Switzerland’s labor share remained almost constant are the counteracting effects of a relatively slow rate of technological progress in 1980 to 1995 and sectoral reallocation toward industries with above-average labor shares.

A view on the long-run evolution of hours worked and labour productivity in Switzerland (1950-2010)

The discussion about the long-run evolution of labor productivity in Switzerland is awed because the available data on the input of labor is incoherent and incomplete. It is the aim of this paper to establish a consistent aggregate series of total hours worked covering 1950-2010. The new data indicates that hours worked in Switzerland have been nearly stagnant between 1960 and 2005, implying that hours worked have grown considerably less than previously thought. As a direct consequence, Switzerlands performance in terms of labor productivity growth has been underestimated in previous work, particularly after the structural slowdown in labor productivity growth of 1973.

Do immigrants take or create residents' jobs? Quasi-experimental evidence from Switzerland

We estimate the causal effect of immigration on unemployment, employment and wages of resident employees in Switzerland, whose foreign labor force has increased by 32.8% in the last ten years. To address endogeneity of immigration into different labor market cells, we develop new variants of the shift-share instrument that exploit only that part in the variation of immigration which can be explained by migration push-factors in the source countries. While OLS estimates suggest that immigrants have crowded out natives, our quasi-experimental results reveal that immigration has in fact reduced unemployment and increased employment of residents in the last decade.

The skill-biased effects of exchange rate fluctuations

This paper examines the linkages between real exchange rate movements and firms’ skill demand. Real exchange rate movements may affect unskilled workers differently than skilled workers because of skill-specific adjustment costs, or because exchange rates lead to changes in relative factor prices and firms’ competition intensity. Using panel data on Swiss manufacturers, we find that an appreciation increases high-skilled and reduces low-skilled employment in most firms, while total employment remains roughly unchanged. We find evidence that exchange rates influence firms’ skill intensity because they affect outsourcing activities, innovation efforts, and firms’ compensation schemes.

Wirkt das Schweizer Kurzarbeitsprogramm

Short-time work schemes aim at avoiding excessive layoffs in firms that face a temporary drop in demand. The instrument was widely used in many developed countries during the Great Recession. However, existing studies reach mixed conclusions regarding the effectiveness of short-time work programs. Do these programs postpone rather than prevent layoffs? This article examines whether the Swiss short-time work program effectively and sustainably reduced dismissals between 2009 and 2015. To this end, we compare employment in establishments that successfully applied for short time work with employment in establishments whose application for short-time work was denied by cantonal employment agencies. We find that approving short-time work secured the jobs of at least 10 per cent of an establishments’ workforce. The estimates suggest that the savings in terms of unemployment benefit payments may be large enough to compensate the spending on short-time work benefits in the Swiss case.

The effects of policy uncertainty on investment: Evidence from the unexpected acceptance of a far-reaching referendum in Switzerland

Does increased economic policy uncertainty dampen investment of firms? We provide direct evidence on this question by examining the effects of an unexpectedly accepted and far-reaching referendum in Switzerland in February 2014. The outcome put several economically relevant agreements between Switzerland and its main trading partner, the European Union, at stake. Using firm-level panel data covering the 2009–2015 period and data from two special surveys levied shortly after the vote, we examine how the induced policy uncertainty affected investment of Swiss firms. Our Difference-in-Differences-in-Differences estimations and complementary survey results give strong evidence that the uncertainty caused by the vote dampened, as theoretically expected, investment of exposed firms with irreversible investment by as much as one quarter in the two years following the vote. Exposed firms that can reverse investment appear rather to increase investment in the year after the vote. Our survey evidence suggests that these firms engage in investment to streamline their production.

Konjunkturanalyse: Prognose 2016/2017, Preissenkungen haben Einbruch abgefedert – Abwertung hellt Aussichten auf

This text contains the autumn forecast 2015 of the KOF Swiss Economic Institute at ETH Zurich, released on 1 October 2015. The first part discusses recent economic developments abroad and in Switzerland, and presents the main forecast results across the various sectors of the economy. In the second part, detailed forecasts for Switzerland follow, split up into the main demand components of GDP. We expect the Swiss economy to grow by 0.9% in 2015, 1.4% in 2016 and 1.8% in 2017, respectively, representing a small upward revision compared with our last forecast from June 2015. In particular, the positive economic development in Europe and the depreciation of the Swiss franc during the second half of 2015 are specified as reasons for this adjustment. The negative price developments during the first half of 2015 are also newsworthy, as both the general price level and sales prices in certain sectors are falling.