The Long-lasting Shadow of the Allied Occupation of Austria on its Spatial Equilibrium

with Christoph Eder (JKU)

As a consequence of World War II, Austria was divided into four different occupation zones for 10 years. Before tight travel restrictions came into place, about 11~percent of the population residing in the Soviet zone moved across the demarcation line. We exploit this large internal migration shock to further our understanding of why economic activity is distributed unevenly across space. Our analysis shows that the distorted population distribution across locations has fully persisted until today (60 years after the demarcation line become obsolete). An analysis of more direct measures of economic activity shows an even higher concentration in the former non-Soviet zone. This gap in economic activity is growing over time, mainly due to commuting streams out of the former Soviet zone. This shows that a transitory shock is capable of shifting an economy to a new spatial equilibrium, which provides strong evidence for the importance of increasing returns to scale in explaining the spatial distribution of economic activity.

Paper download: link (last update December 2015)

The Effect of Statutory Sick Pay on Workers’ Labor Supply and Subsequent Health 

with Susanne Pech (JKU) and Martina Zweimüller (JKU)

Social insurance programs typically comprise sick-leave insurance. An important policy parameter is how the costs of lost productivity due to sick leave are shared between workers, firms, and the social security system. We show that this sharing rule affects not only absence behavior but also workers' subsequent health. To inform our empirical analysis, we propose a model in which workers' absence decisions are conditional on the sharing rule, health, and a dismissal probability. Our empirical analysis is based on high-quality administrative data sources from Austria. Identification is based on idiosyncratic variation in the sharing rule caused by different policy reforms and sharp discontinuities at certain job tenure levels and firm sizes. An increase in either the workers' or the firms' cost share, both at public expense, decreases the number of sick-leave days. Policy-induced variation in sick leave has a significant effect on subsequent healthcare costs. The average worker in our sample is in the domain of presenteeism, that is, an increase in sick leave due to reductions in workers' or firms' cost share would reduce healthcare costs and the incidence of workplace accidents.

Paper download: link (updated in January 2017)

Parental Response to Early Human Capital Shocks: Evidence from the Chernobyl Accident

with Martina Zweimüller (JKU)

Little is known about the response behavior of parents whose children are exposed to an early-life shock. We interpret the prenatal exposure of the Austrian 1986 cohort to radioactive fallout from the Chernobyl accident as a negative human capital shock. We can rely on exogenous variation in the exposure to radioactive fallout (over time and) between communities due to differences in precipitation at the time of the accident. Our approach provides robust empirical evidence for compensating investment behavior. Families with low socioeconomic status reduce their family size, while families with higher status respond with reduced maternal labor force participation.

Downloads: paper, web-appendix (updated in November 2014)

media: IZA Newsroom

Child Custody Law and Family Behavior: Evidence from Austria

with René Böheim (WU Vienna) and  Marco Francesconi (U Essex)

We examine the effect of the introduction of joint custody after divorce on marriage, divorce, fertility, and female employment. Our analysis is based on Austrian individual-level administrative data, which cover the entire population. We em-ploy a difference-in-differences estimation approach and use older couples with out children, and couples from neighboring Germany, as a control group. Our estima-tion results suggest that the reform has significantly increased marriage and marital births rates and has reduced divorce rates and the likelihood of female employment.Our findings are robust to several sensitivity checks and confirm most of the results previously found for the US.

Paper download: in February 2016: [paper]  

Currently inactive papers:

Divorce and the Excess Burden of Lawyers, July 2007: [paper] lost in a R&R media: The Financial Times Undercover Economist

Bargaining at Divorce: The Allocation of Custody with Christine Hölzl December 2007: [paper] lost in a R&R