Temporary Separations and Firm Size in the German Labour Market

We estimate the duration of out‐of‐work periods in the German labour market from 1980–90 and their relationship with employment protection legislation. We distinguish between Employment Interruptions that are legally protected and ordinary Layoffs. We investigate the question of whether the size of employer has an impact on the choice of the type of temporary separation. We find that firm size does matter, in both the type and the duration of temporary separations, and we examine the complex re‐hiring process.