3rd Party Funds Projects

KonsortSWD, 2021: Funding of the data management project "Anonymization concept for a linked company data set of the Federal Archives with the data of the IAB [Anonymisierungskonzept  für einen verknüpften Betriebsdatensatz des Bundesarchivs mit den Daten des IAB" (mit S. Dummert und D. Müller).

DFG, January 2018 - December 2020 (STU 627/1-2): Wages, Heterogeneities, and Labor Market Dynamics (2. funding period) 

• The main objective of the priority program "The German Labor Market in a Globalized World" (SPP 1764) is to provide research about the challenges of the German labor market in a globalized world. The network is sponsored by the German Research Foundation (DFG) and brings together researchers from economics, sociology, and human resource management.

• Search frictions generate long-term employment relationships and rents for matched workers and firms, which are shared in the wage determination process. A good understanding of wage formation and wage cyclicality is key for a variety of issues (e.g., hiring and firing decisions, labor market dynamics, wage dispersion) and therefore ultimately for policy (e.g., labor market or business cycle policies).

• During the first funding period of our project, we have created the new unique Administrative Wage and Labor Market Flow Panel (AWFP) dataset and we have identified many new stylized facts on wage formation, heterogeneities and labor market flow dynamics in Germany. We contrasted these stylized facts with existing theories (e.g., on-the-job search), we provided new theoretical frameworks (e.g., on different real wage cyclicalities and their feedback on establishments’ hiring behavior) and we offered statistical explanations (e.g., on returns to tenure). Our work has helped us to identify important open questions and new data requirements.

• Our new project proposition aims at gaining new insights on the hiring activities of establishments and their wage formation. For this purpose, we will merge the AWFP data with the IAB Job Vacancy Survey, which contains information on vacancies, recruitment channels and intensities. We will establish new stylized facts on how different wage cyclicalities and other factors affect establishments’ search behavior and vacancy posting. We will also analyze how establishments poach workers from other establishments. The results will be contrasted with search theory. New model mechanisms will be developed and compared to the data outcomes.

• Furthermore, we will use administrative worker data to analyze various biases when it comes to the statistical properties of wages and wage cyclicalities over the business cycle. We will for example develop a method to control for time-variant match-specific heterogeneity and test whether this leads to a systematic bias of estimated wage cyclicalities. The econometric results will again be contrasted with theory.

• Overall, we aim at establishing new stylized facts. We expect the new stylized facts to be of interest to a broad audience of labor economists because they will for example contain insights on worker reallocation and vacancy posting behavior. In addition, we aim at advancing relevant models and mechanisms. They will allow us to interpret observed phenomena in structural manner and can be used for policy analysis.

European Union, committed contributor (with S. Fietze and W. Matiaske) of the Horizon 2020 (Marie Skłodowska-Curie Innovative Training Networks network) project “Global Mobility of Employees” (GLOMO). 

• Involvement: Providing a basic Ph.D. methods summer school in 2018 and an advanced Ph.D. methods summer school in 2019.

• IAB-Forum article on the GLOMO: EU project analyses international labor migration from different.

DFG, January 2015 - December 2017 (STU 627/1-1): Wages, Heterogeneities, and Labor Market Dynamics (1. funding period) 

• Search frictions generate long-term employment relationships and thus rents for matched workers and firms, which are shared in the wage determination process. An understanding for wage formation and wage cyclicality is central for a variety of issues (e.g. hiring and firing decisions, labor market dynamics, wage dispersion) and therefore ultimately for policy (e.g. labor market, business cycle or trade policies). Although empirical research on wage cyclicality has been spurred in light of the search and matching theory recently, the existing literature suffers from data limitations (e.g. the inability to control for certain heterogeneities or the lack of disaggregated labor market flow data).

• As our major contribution, we will first analyze the driving forces of wage formation, and wage cyclicality as well as the role of various heterogeneities. Second, the project aims to establish a quantitative connection between wage formation and labor market flow dynamics at the disaggregated level. Two examples: How do the labor market dynamics of rigid wage establishments differ from flexible wage establishments? What is the relationship between sectoral- or establishment-specific average turnover rate and establishment labor market dynamics? Answers to those questions require high quality disaggregated labor market flow and wage data. They will be a reference point for the validity of various labor market flow models and they will help us to improve our understanding on the interaction between wage formation and labor market dynamics.