Labor Economics
Inequality and Economic Mobility
Higher Education
Many Lose, Few Win: Patterns of Earnings Growth Across Business Cycles
This paper examines the impact of business cycles on the earnings of prime-age workers and labor market entrants in Germany using pension register data on birth cohorts 1935 through 1982. I document three main results: First, during recessions, prime-age workers at the lower end of the prerecession earnings distribution experienced the highest average earnings losses. These losses gradually decreased in magnitude with higher prerecession earnings. Second, the majority of the German population were unable to recover from their average earnings losses in subsequent economic expansions, with the exception of those in the top 30 percent of the prerecession earnings distribution. Third, lower educated men entering the labor market during poor economic conditions face a significant earnings reduction. A one-point increase in the initial unemployment rate leads to, on average, a six percent decrease in annual earnings in the first year after graduation. This negative effect attenuates after five years.
The Broken Elevator: Declining Absolute Mobility of Living Standards in Germany (with Timm Bönke and Holger Lüthen)
This study provides the first absolute income mobility estimates for postwar Germany. Using various micro data sources, we uncover a steep decline in absolute mobility rates from 81 percent to 59 percent for children’s birth cohorts 1962 through 1988. This trend is robust across different ages, family sizes, measurement methods, copulas, and data sources. Across the parental income distribution, we find that children from middle class families experienced the largest percentage point drop in absolute income mobility (-31pp). Our counterfactual analysis shows that lower economic growth rates and higher income inequality contributed similarly to these trends.
Earnings Growth, Inequality and Absolute Mobility in Germany, 1882-2019 (with Timm Bönke and Hannah Penz)
Utilizing six different data sources, this study provides a comprehensive picture of absolute mobility and its two key ingredients, earnings growth and inequality, for Germany between 1882 and 2019. We document that today’s earnings inequality is higher than it was in 1882. This comes after significant variation in inequality over time including Gini coefficients of over 0.5 at the end of the Weimar Republic and estimates below 0.2 during the mid-1970s. We also find that mean rates of absolute earnings mobility declined from 70 percent to 48 percent for children’s birth cohorts 1882 through 1989. While children born between 1932 and 1962 experienced unusually high absolute mobility rates of over 90 percent due to the postwar economic miracle years, estimates for all other birth cohorts ranged between 41 and 72 percent.
Glaubitz, Rick, Harnack-Eber, Astrid & Wetter, Miriam (2024). The gender gap in lifetime earnings: A microsimulation approach. LABOUR, 1–50.
Ben-Shalom, Yonatan, Musse, Isabel & Harnack-Eber, Astrid (2024): Evaluation Design Options for Programs to Improve Employment Outcomes for Young Adults on the Autism Spectrum. Report submitted to the U.S. Department of Labor.
Shenk, Marisa, Harnack-Eber, Astrid & Patnaik, Ankita (2023). Characteristics, Service Use and Employment Outcomes of Young Adults on the Autism Spectrum Who Engaged with Vocational Rehabilitation Services from 2017 to 2020. Report submitted to the U.S. Department of Labor.
Causey, Jennifer, Harnack-Eber, Astrid, Ryu, Mikyung, & Shapiro, Doug (2021). A COVID-19 Special Analysis Update for High School Benchmarks, Herndon, VA: National Student Clearinghouse Research Center.
COVID-19 Transfer, Mobility and Progress First Look Spring 2021 Report (with J. Causey, F. Huie, R. Lang, Q. Liu, M. Ryu and D. Shapiro), National Student Clearinghouse (2021).
Bönke, Timm, Glaubitz, Rick, Göbler, Konstantin, Harnack, Astrid, Pape, Astrid & Wetter, Miriam (2020). Who wins? Who loses? The Evolution and Prognosis of Lifetime Earnings in Germany. Report for Bertelsmann Stiftung.
Bönke, Timm, Harnack, Astrid & Wetter, Miriam (2019). Who wins? Who loses? The evolution of the German labor market from the early German Federal Republic until today. Report for Bertelsmann Stiftung.
Bönke, Timm, Harnack, Astrid & Frank, Carola (2018). The social dividend: Utopian or real policy option? Report for Bertelsmann Stiftung.
Bönke, Timm & Harnack, Astrid (2017). A Sovereign Wealth Fund for Germany? Ideas and International Examples. Report for Bertelsmann Stiftung.
Die Soziale Erbschaft: Ansatz für eine neue Vermögenspolitik? (with T. Bönke), in Progressives Zentrum and Bertelsmann Stiftung (Eds.) Soziale Marktwirtschaft: All inclusive? Band 3: Vermögen.