Ongoing Research
“De-Routinization in the Fourth Industrial Revolution - Firm-Level Evidence” (joint with Melanie Arntz, Sabrina Genz, Florian Lehmer, and Ulrich Zierahn-Weilage), 2024, IZA DP 16740, submitted.
Sources of de-routinization between 2011 and 2016 for frontier technology adopters, Germany
The Figure reports the contribution to aggregate de-routinization between 2011 and 2016 by frontier adopters differentiating between the three components (see paper): the contribution of the within firms, between adoption groups and within adoption group effects. Weighted with firm stratification weights. NRC: non-routine cognitive jobs; RC/RM: routine cognitive/manual jobs; NRM: non-routine manual jobs. Confidence bands based on jackknife standard errors.
Abstract: This paper examines the extent to which aggregate-level de-routinization can be attributed to firm-level technology adoption during the most recent technological expansion. We use administrative data and a novel firm survey to distinguish frontier technologies from older technologies. We find that adopters of frontier technologies contribute substantially to de-routinization. However, this is driven only by a subset of these firms: large adopters replace routine jobs and less routine-intensive adopters experience faster growth. These scale and composition effects reflect firms' readiness to adopt and implement frontier technologies. Our results suggest that an acceleration of technology adoption would be associated with faster de-routinization and an increase in between-firm heterogeneity.
Press: IZA Newsroom
Data: IAB-ZEW-Labor Market 4.0-Establishment Survey (BIZA I); Data access see here.
Awards: Best Poster Award 2018 of the European Association of Labour Economics (EALE) .
“Minimum Wages and the Rise in Solo Self-Employment” (joint with Ulrich Zierahn-Weilage and Angelika Ganserer), updated January 2024, submitted.
Effects of a minimum wage introduction on the share of solo self-employed individuals (synthetic difference-in-differences)
The figure shows the estimates for East and West Germany based on the synthetic difference-indifferences outlined in Equation 1. The 95 % confidence intervals are based on bootstrapped standard errors with 100 replications. The dashed line represents the introduction of minimum wages in 1997.
Abstract: Within a quasi-experimental setting, we show that the first-time adoption of industry-specific minimum wages led to a doubling in the share of solo self-employment in areas with a strong bite. We explain this with the minimum wage-driven cost shock, which led to reduced labor demand and wages for dependent employment while creating incentives for independent employment. Our results suggest that dependent workers have been involuntarily pushed into more precarious alternative work arrangements, with poorer social security and lower incomes. Such unintended side effects are likely to occur when the minimum wage is set extraordinarily high, especially during an economic downturn.
Press: IZA Newsroom, ZEW News.
Versions: Earlier versions published as IZA Discussion Paper No. 15283 as well as ZEW Discussion Paper No. 22-024 .
"How Do Workers Adjust When Firms Adopt New Technologies?" (joint with Sabrina Genz, Florian Lehmer, Britta Matthes and Markus Janser), currently in revision.
Adjustments in the individual employment stability in reaction to firm-level technology adoption (2011-2016)
Abstract: We investigate how workers adjust to firms' investments into new digital technologies. For this, we collected novel data that links survey information on firms' technology adoption to administrative social security data. Our survey measure allows us to distinguish between waves of technology and captures not only developments in automation but also digitalization spurred by a greater connection of technologies. After providing some stylized facts on technology adoption in Germany, we compare individual outcomes of comparable workers employed at technology adopters with those at non-adopters. Depending on the wave of technology, we find evidence for improved employment stability, higher wage growth, and increased cumulative earnings in response to digital technology adoption. These beneficial adjustments seem to be driven by technologies used by service providers rather than manufacturers. However, the adjustments do not occur equally across worker groups: IT-related expert jobs with non-routine analytic tasks benefit most from technological upgrading, coinciding with highly complex job requirements, but not necessarily with more academic skills.
Press: IZA Newsroom, NBC
Versions: earlier version published as IZA Discussion Paper No 14626 and ZEW Discussion Paper No. 21-073.
Presentation: Youtube video here.
"Firm-level Technology Adoption in Times of Crisis" (joint with Melanie Arntz, Michael Böhm, Georg Graetz, Florian Lehmer and Cäcilia Lipowski), working paper in preparation.
Investments in office & communication equipment by application
For each investment category of `before', `during not due to', and `due to' the pandemic, the bars show the percentage share of different kinds of applications (as indicated by the vertical axis labels) within that category. Bars add up to 100 for each category of `before', `during not due to', and `due to'. Percentage shares are based on 2,526 unique investments and are weighted by sampling weights. Applications are ranked in decreasing order according to the relative change between `before' and `due to'.
Abstract: Using longitudinal survey data on technology use by German firms, matched with administrative worker--firm registers, we assess whether the Covid-19 pandemic accelerated the adoption of cutting-edge technologies. Our data break down technologies by their application and level of sophistication, as well as capturing the timing of investments and whether the pandemic prompted these investments. We do not find evidence for an overall acceleration effect: Cutting-edge investments did not spike, and while they were more common among firms with higher remote work potential, such firms invested at a greater rate even before the pandemic, and also had more ambitious investment plans pre-pandemic. However, we do find that technologies facilitating remote work were adopted at a greater rate due to the pandemic, and these technologies appeared to have helped firms mitigate the negative employment effects of the crisis.
Data: IAB-IZA-ZEW-Labor Market 4.0-Establishment Survey (BIZA II); more information (German), see here.
Work in progress
"Do Minimum Wages Encourage Capital Deepening?” (joint with Christina Gathmann and Boris Ivanov).
Abtract: Much of the literature on the labor market impact of minimum wages has focused on employment or displacement effects. We investigate instead whether the adoption of minimum wages encourages firms to invest in capital intensity or outsource some of their production steps. Our analysis exploits rich balance sheet data, matched with administrative data, on firms that became exposed to industry-specific minimum wages in Germany. The data allows us to investigate whether incumbent firms with more scope for capital-labor substitution increase their capital intensity, and/or whether firms entering the treated industries raise their capital intensity after the minimum wage introduction. We also look at the effect of minimum wages on outsourcing, and show how firms adjust their workforce alongside changes in capital expenditures.