Working Papers:

Displacement Effects in Manufacturing and Structural Change, with Ines Helm and Uta Schönberg, revise and resubmit at Review of Economic Studies 

Media coverage:   Die Presse (in German)

We investigate the consequences of structural change for workers displaced from the manufacturing sector. Manufacturing establishments traditionally employed low- and high-wage workers in similar proportions and paid substantial wage premiums to both types of workers. Structural change has led to the disappearance of these jobs, particularly for low-wage workers. Decomposing displacement wage losses, we show that low-wage workers suffer considerable losses in establishment premiums following displacement, whereas high-wage workers tend to fall down the match quality ladder. With ongoing structural change, losses in wages and establishment premiums have increased over time, especially for low-wage workers, in part because they are increasingly forced to switch to low-knowledge service jobs where establishment premiums are low. Our findings further highlight that structural change and layoffs in manufacturing have significantly contributed to job polarization and the rise in assortative matching of workers to firms.

The Responsiveness of Inventing: Evidence from a Patent Fee Reform

Inequality leads to a misallocation of talent when individuals are credit constrained. This paper studies such misallocation by tracing the effects of a large reduction in the cost of patenting on innovation. I exploit a patent fee reform in the United Kingdom in 1884 to investigate the responsiveness of inventors, and create a novel dataset on 54,000 inventors and their patent renewals. The reduction in the cost of inventing leads to a considerable and persistent rise in the quantity of lower- and high-quality ideas patented. Inventors respond strongly by delaying to patent lower-quality ideas before the reform and by bunching patents just after the reform. Innovation, as proxied by high-quality patents, increases in the longer run with an elasticity of 1.25. To test for the presence of credit constraints I generate two proxy measures of wealth using inventor names and addresses, and find a larger innovation response for poorer inventors. These results indicate efficiency gains from decreasing the cost of inventing and in addition, from relaxing credit constraints.

Residential Segregation and Ethnicity

How do changes in the ethnic residential composition affect local neighbourhoods, their population growth and house prices? A change in social housing allocations in England and Wales in the early 1990s serves as a quasi-experiment for changes in ethnic composition at the neighbourhood level. Using detailed Census data from 1991 to 2011, I estimate the effect of composition changes from variation across neighbourhoods within cities. The results show that an exogenous inflow of ethnic minority households into the neighbourhood by 10 percentage points raises the share of minority population in private housing by 1.2 percentage points and leads to small declines in house prices by 0.6 percent.

Work in Progress:

Wages, Bargaining and Productivity in Denmark, with Simon Janssen and Attila Lindner

The Labor Market Effects of Venezuelan Immigrants in Colombia, with Arlen Guarín

The Careers of Women Inventors, with Mimosa Distefano, Klea Ibrahimi, Simon Janssen and Linh Tô

Parental Leave and Career Trajectories in Austria, with Omar Bamieh and Lennart Ziegler 

Social and Upward Mobility in Austria, with Franziska Disslbacher and Petra Sauer

Publications:

Labor Market Reforms: An Evaluation of the Hartz Policies in Germany, with Jake Bradley, European Economic Review, 2019, Vol. 113, pp. 108-135.  (working paper version)

How do workers and firms respond to comprehensive labor market reforms? We use detailed micro data to analyze the German Hartz Reforms through the lens of a structural model of the labor market. These reforms aimed at reducing unemployment, by increasing working hour flexibility, job matching and work incentives. In our setting, reforms directly affect the model parameters, which are estimated using matched data on 430,000 workers in 340,000 firms. Contrary to previous findings, our analysis shows that, although the reforms shortened the typical duration of unemployment, they did not reduce unemployment as a whole and led to a decline in wages. Low-skilled workers suffered the most in terms of employment and wage losses. Furthermore, we decompose the contribution of each reform wave to employment and wage changes, finding that the reduction in generosity of unemployment benefits was the principle driver in reducing wages.

Productivity Growth, Wage Growth and Unions, with Uta Schönberg and Ragnhild Schreiner, in "Price and Wage-Setting in Advanced Economies", European Central Bank Conference Proceedings, 2018.

Media coverage:   New York Times   Vox

This paper reviews trends in labor productivity, wage growth, unemployment and inequality over the past two decades in nine advanced countries. We focus on the two largest countries in the eurozone, Germany and France, which experienced similar increases in productivity over the past 20 years. In France wages grew in tandem with productivity, inequality declined and unemployment remains stubbornly high. In Germany, in contrast, wages largely stagnated (until 2008), inequality increased (until 2010), but unemployment is now at a record low. We argue that the divergent development of Germany and France is in part a consequence of an unprecedented decentralization of the wage-setting process in Germany, from the sectoral level down to the level of the firm or the individual. In contrast, the distinctive characteristics of France’s system of industrial relations prevented France from a similar downward adjustment of wages.

Uneven Playing Fields: The Application of Tax Incentives in Mozambique, in F. Tarp and C. Arndt, eds., "Fiscal Policy and Tax Incidence in Mozambique", London: Routledge, 2009.

Since the 1990s large investment projects in Mozambique obtained generous tax benefits on a case-by-case basis. In addition, a variety of tax incentives are available through a standard incentive scheme. I provide an overview of the fiscal incentives that the Mozambican Government grants, approximate the magnitude of foregone revenues, and place these figures in the context of the existing literature on tax incentives.

Other Publications:

Energy Price Crisis - How to Respond in a Cost-effective Way that Protects Poorer Households, with Meike Elsasser, op-ed article in Frankfurter Allgmeine Zeitung, print edition August 13 2022 (in German) 

Also see my Google Scholar page