Labor Demand, Qualifications, and Family Management: Analyzing Labor Demand of German Family-Managed Firms with Panel Data.

This paper investigates the characteristics of labor demand for different levels of qualification in family-managed firms. As the majority of firms in Germany but also in other European countries is family-controlled, the outcome of this study is relevant on an international level. While most studies on employment in family firms have focused on the firms' total workforce, this study analyzes labor demand in family-managed firms on three different skill levels. Applying large panel data from German establishments and a fractional panel probit regression model, the outcomes show that there are some remarkable differences between family- and non-family-managed firms. On average, only medium-skilled workers experienced higher job stability in family-managed firms, whereas highly- and low-skilled workers do not. Highly skilled workers might have valid outside opportunities and probably do not seek higher job stability, while low-skilled probably do not profit from the firm owners' loyalty. [ABSTRACT FROM AUTHOR]