Current Research Projects

Resilience to Adverse Labor Market Shocks (with Susan Athey, Oskar Nordström Skans and Johan Vikström, Yaroslav Yakymovych)

We predict individual income losses due to establishment closures by applying generalized random forests to extremely rich Swedish register data. Workers in the most affected decile lose 45 percent of annual earnings in the year after job loss, compared to 5 percent for the least affected decile. Large short-run earnings losses are closely linked to large long-run losses, and to a higher risk of displacement. Job loss increases gross earnings inequality; the most affected workers have low pre-displacement earnings and bleak earnings prospects even if not displaced. A progressive tax/transfer system mitigates the pass-through of earnings losses to disposable income. However, all but the most resilient workers lose an amount equivalent to 3/4 of their annual pre-displacement disposable income over the first ten post-displacement years. Many characteristics are correlated with the degree of earnings losses. Key predictors of large losses are older age, low schooling, working in manufacturing and living in a rural area. Other factors such as minority status, local unemployment rates, gender and family status are less relevant. Policymakers are most likely to reach vulnerable workers if they target older workers in manufacturing.

Labor Mobility and Worker Transitions - with Susan Athey, Karthik Rajkumar and Lilia Chang

We know that the labor market is changing ever more rapidly for everyone involved. One of the main drivers of change is technological progress, with technologies such as robots, software or AI fundamentally changing how work gets done and by whom. Automation both replaces certain tasks that humans used to do, and more importantly changes the required skills in occupations that are adapting new technologies. Many occupations are therefore in decreasing demand and may seize to exists, while others can change beyond recognition. While that has always been true over time, the rate of change seems to be ever increasing, resulting in individuals having to adapt more frequently.

This project aims to better understand worker transitions between different career pathways, what enables them and where there are roadblocks to good transitions that require better policies. In a first step, we estimate the probabilities to transition between different occupations for individuals. At each point throughout a career span, an individual can choose to either stay in their current situation, switch occupation or go back to school. What then, is the lifetime value of starting a career in a particular occupation and education status? That is, with all potential transition probabilities mapped out over a lifetime and the associated expected rewards for each of those, we calculate the expected present discounted value of earnings over a career span. Which occupational transitions can the individual make to improve their overall lifetime value? What if the individual changes geographic location or goes back to school for a degree?

Published Papers

Does the education level of refugees affect natives'  attitudes?,  with Philipp Lergetporer and Marc Piopiunik, European Economic Review, forthcoming.

In recent years, Europe has experienced a large influx of refugees. While natives’ attitudes toward refugees are decisive for the political feasibility of asylum policies, little is known about how these attitudes are shaped by information about refugees’ characteristics. We conducted a survey experiment with a representative sample of more than 4,000 adults in Germany in which we randomly provide information about refugees’ education level. Information provision strongly increases respondents’ beliefs that refugees are well educated. The information also increases labor market competition concerns, decreases fiscal burden concerns, and positively affects general attitudes toward refugees. We perform several robustness analyses in additional experiments with more than 5,000 university students. In sum, we show that correcting misperceptions about refugees’ education level has profound effects on natives’ attitudes.

New ifo Working Paper Version, No. 346, January 2021.

Older Version: CESifo Working Paper, No. 6832, December 2017

Skills, Signals, and Employability: An Experimental Investigation, 2020, with Marc Piopiunik, Guido Schwerdt and Ludger Woessmann, European Economic Review, Volume 123.

As skills of labor-market entrants are usually not directly observed by employers, individuals acquire skill signals. To study which signals are valued by employers, we simultaneously and independently randomize a broad range of skill signals on pairs of resumes of fictitious applicants among which we ask a large representative sample of German human-resource managers to choose. We find that signals in all three studied domains – cognitive skills, social skills, and maturity – have a significant effect on being invited for a job interview. Consistent with the relevance, expectedness, and credibility of different signals, the specific signal that is effective in each domain differs between apprenticeship applicants and college graduates. While GPAs and social skills are significant for both genders, males are particularly rewarded for maturity and females for IT and language skills. Older HR managers value school grades less and other signals more, whereas HR managers in larger firms value college grades more. 

Link to journal article

Download CESifo Working Paper, No. 6858, January 2018

Health care coverage in OECD countries in 2012, with Valérie Paris, Emily Hewlett, Ane Auraaen, Jan Alexa 

This paper provides a detailed description of health coverage in OECD countries in 2012. It includes information on the organisation of health coverage (residence-based vs contributory systems), on the range of benefits covered by basic health coverage and on cost-sharing requirements. It also describes policies implemented to ensure universal health coverage –in most countries- and to limit user charges for vulnerable populations or people exposed to high health spending. The paper then describes the role played by voluntary health insurance as a secondary source of coverage. Combining qualitative information collected through a survey of OECD countries on benefits covered and cost-sharing requirements with spending data collected through the system of health accounts for 2012, this paper provides valuable information on health care coverage in OECD countries at a time universal health coverage is high on the policy agenda of many countries. 

Download OECD Health Working Papers, No. 88, 2016

Working Papers

Shocking Choice: Trade Shocks, Local Labour Markets and Vocational Occupation Choices

Whether individuals choose occupations that teach them general or specific skills can have important implications on how protected they are to changing conditions on the labor market. This paper looks at the impact of growing up in German regions that are exposed to structural change on individual vocational occupation choices. Exogenous variation in local labor market structural change stems from shift-share type import shocks from China and Eastern Europe, which are instrumented by trade with other high income countries. Using longitudinal administrative social security data, results show that individuals surprisingly chose more skill-specific occupations as a result of higher local import competition. Lifetime earnings are adversely affected by being exposed to import competition during adolescence, which can be explained by occupational choice. The results are not driven by labor demand, nor endogenous sorting into vocational education.      

Download ifo Working Paper 281, December 2018

Entry Barriers and the Labor Market Outcomes of Incumbent Workers: Evidence from a Deregulation Reform in the German Crafts Sector,  with Philipp Lergetporer and Jens Ruhose

We study the labor market outcomes of a deregulation reform in Germany that removed licensing requirements to become self-employed in some occupations. Using longitudinal social security data, we implement a matched difference-in-differences design with entropy balancing to account for observable characteristics and unobserved individual heterogeneity. The reform tripled the number of businesses within ten years and led to slower earnings growth and higher unemployment for incumbent workers in deregulated occupations. However, the reform effect seems rather small, which we attribute to the relatively low competitiveness of new businesses. Supporting this view, the reform did not lead to overall employment growth.

Download IZA Working Paper, IZA DP No. 11857, September 2018

Can Online Surveys Represent the Entire Population?, with Elisabeth Grewenig, Philipp Lergetporer, Katharina Werner,  Ludger Woessmann 

A general concern with the representativeness of online surveys is that they exclude the “offline” population that does not use the internet. We run a large-scale opinion survey with (1) onliners in web mode, (2) offliners in face-to-face mode, and (3) onliners in face-to-face mode. We find marked response differences between onliners and offliners in the mixed-mode setting (1 vs. 2). Response differences between onliners and offliners in the same face-to-face mode (2 vs. 3) disappear when controlling for background characteristics, indicating mode effects rather than unobserved population differences. Differences in background characteristics of onliners in the two modes (1 vs. 3) indicate that mode effects partly reflect sampling differences. In our setting, re-weighting online-survey observations appears a pragmatic solution when aiming at representativeness for the entire population. 

Download CESifo Working Paper, No. 7222, September 2018