Research

Working Papers

The Causal Effects of Long-Term Exposure to Air Pollution: Evidence from Socialist East Germany

Joint work with Maria Waldinger. 

[Draft coming soon.]

This paper measures the causal effects of long-term exposure to air pollution on individuals. When the Soviet Union - main provider of fossil fuels to socialist East Germany after World War II - unexpectedly cut oil exports in 1982, East Germany had to rapidly substitute oil with highly-polluting lignite coal. We exploit the spatial distribution of lignite deposits within East Germany to show that the resulting increase in air pollution had large and persistent effects on individuals' health and labor market outcomes over the four decades after the shock. We leverage authoritarian restrictions on the freedom of movement and the non-competitive housing and labor markets of the country’s command economy to identify long-term effects in an inverse movers design. Comparing birth cohorts, we show that the adverse effects of long-term air pollution exposure are pervasive throughout the entire age distribution.

The Big Sell: Privatizing East Germany's Economy

Revise and Resubmit at Journal of Public Economics

Joint work with Moritz Hennicke and Lukas Mergele.

[Paper] 

After the demise of communism, East Germany experienced one of the most extensive and rapid privatization programs in history. While the program sparked global interest as a blueprint for privatization, its effectiveness remains heavily contested. We construct a unique firm-level dataset to provide the first comprehensive analysis of the program and examine whether the privatization authority followed its mandate to privatize competitive firms. More generally, the program illustrates challenges and lessons for government interventions attempting to target the right firms to promote policy goals. We document that firms with higher baseline productivity are more likely to be privatized, yield higher sales prices, are more often acquired by West German investors, and are more likely to remain in business even 20 years after leaving public ownership. The privatization agency plausibly contributed to these outcomes by rating and prioritizing productive firms.

Media coverage: [Süddeutsche Zeitung] [MDR] [WDR] [FOCUS] [Spiegel Online] [LeSoir] [Freie Presse] [Neues Deutschland]
Summaries: [ZEW Kurzexpertise] [ifo Schnelldienst] [Ökonomenstimme]

Learning to be Productive: The Effects of R&D on Productivity over the Firm Life Cycle

Joint work with Bettina Peters. (Previous title: Incumbents and Entrants as Carriers of Productivity Growth and Innovation) -- Updated draft coming soon! --

[Paper]

How does productivity growth change over the firm life cycle? Using pooled survey data from Germany, we study the evolution of firm productivity as an organizational learning process. Differentiating between internal learning through firms’ investments in own research and development and external learning through spillovers, we show that the relationship between learning and productivity growth changes substantially as firms age. While we find that young firms experience larger productivity gains from internal learning – own research and development – on average, their productivity gains are also significantly more volatile. Established firms, in turn, experience lower but more persistent productivity gains from internal learning and are less likely to change their position in the productivity distribution as a consequence of internal learning behavior. External learning through spillovers occurs mostly at established firms.

Work in Progress