Like most Western European countries, Germany stringently regulates dismissals and layoffs. Critics contend that this regulation raises the costs of employment adjustment and hence impedes employers' ability to respond to fluctuations in demand. Other German labor policies, however, most...

This paper compares employment and hours adjustment in Japanese and U.S. manufacturing. In contrast to some previous work, we find that adjustment of total labor input to demand changes is significantly greater in the United States than in Japan; adjustment of employment is significantly greater...