Selected publications

 Racing With or Against the Machine? Evidence on the Role of Trade in Europe” (joint with Anna Salomons and Ulrich Zierahn), 2022, Journal of the European Economic Association, 20 (2), 869–906.

Predicted employment change in Europe (27 countries) between 1999 and 2010 in millions of jobs. 

Digital technologies displace labor from routine tasks, raising concerns that labor is racing against the machine. We develop an empirically tractable task-based framework to estimate the aggregate employment effects of routine-replacing technological change (RRTC), along with the labor and product demand channels through which this aggregate effect comes about, focusing on the role of inter-regional trade. While RRTC has indeed had strong displacement effects in Europe between 1999 and 2010, it has simultaneously created new jobs through increased product demand, resulting in net employment growth. However, the distribution of gains from technological progress matters for its job-creating potential.

Versions: earlier version "Racing With or Against the Machine? Evidence from Europe" published as IZA Discussion Paper No. 12063

Press: The Economist, Makronom, Bloomberg, Süddeutsche Zeitung, Robotonomics, Industry 4.0 Magazin, Die Presse, Kronenzeitung , Der Bund, Spiegel Online.

Awards: UniCredit Best Paper Award 2016, ZEW Award for the Best Scientific Achievement 2022

When the Minimum Wage Really Bites Hard: The Negative Spillover Effect on High-Skilled Workers" (joint with Ulrich Zierahn), 2022, Journal of Public Economics, 206.

Minimum wage effects on the unconditional real daily wage distribution (German roofing industry, 1994-2008)

Minimum wage levels are rising around the globe. To shed more light on the possible unintended side effects of higher wage floors, we study the impact of a minimum wage introduction on wages and employment in a quasi-experimental setting where the minimum wage is set extraordinarily high during an economic downturn. We identify treatment effects along different wage and skill groups and find positive wage and employment spillover effects for medium-skilled workers with salaries just above the minimum wage. More striking, we find negative wage and employment effects for high-skilled workers who are further up the wage distribution, followed by reduced returns to skills and industry skill supply. We explain these adjustments with a substitution-scale model that predicts negative spillover effects whenever labor-labor substitutions toward high-skilled workers are overcompensated by an overall decline in industry employment. Even though we focus on a specialized industry, we lay out the general conditions under which such unfavorable adjustments may occur in other contexts

Press: Ökonomenstimme

Versions: earlier versions published as IZA Discussion Paper No. 13633, ZEW Discussion Paper No. 20-042 and No. 14-133. 

Revisiting the Risk of Automation” (joint with Melanie Arntz and Ulrich Zierahn), 2017, Economics Letters, 159, 157-160. 

Employment shares by automation risk in the US: occupation-level vs. job-level approach 

In light of rapid advances in the fields of Artificial Intelligence (AI) and robotics, many scientists discuss the potentials of new technologies to substitute for human labor. Fueling the economic debate, various empirical assessments suggest that up to half of all jobs in western industrialized countries are at risk of automation in the next 10 to 20 years. This paper demonstrates that these scenarios are overestimating the share of automatable jobs by neglecting the substantial heterogeneity of tasks within occupations as well as the adaptability of jobs in the digital transformation. To demonstrate this, we use detailed task data and show that, when taking into accounting the spectrum of tasks within occupations, the automation risk of US jobs drops, ceteris paribus, from 38 % to 9 %. 

Press: The Economist, New York Times, The Sidney Morning Herald, Die Welt, Handelsblatt, EurActiv, Deutschlandfunk Nova, Frankfurter Allgemeine Woche,  Kölner Stadtanzeiger, KURIER, OECD Policy Brief, Robonomics, Berliner Zeitung, American Enterprise Institute, Wiener Zeitung, Spiegel Online, Süddeutsche Zeitung.

Downloads: Among top 10 of most downloaded articles from Economics Letters in the last 90 days (Nov 2019).

Versions:  Published version here. Published version is a revised version of  "The Risk of Automation for Jobs in OECD Countries: A Comparative Analysis", 2016, OECD Social, Employment and Migration Working Papers No. 189, Paris. 

 Other publications in refereed Journals

"The Impact of Demographic Change on Regional Labour Markets” (joint with Michael Böhm, Pamela Quadrai and Christian Siegel), 2021, Oxford Review of Economic Policy, 37 (1), 113-131.

Abstract: Like many other countries, Germany has experienced rapid population and workforce ageing, yet with substantial variation across regions. In this paper we first use this spatial variation between 1975 and 2014 to estimate quasi-causal supply effects of ageing on regional labour market outcomes, drawing on the identification strategy of Böhm and Siegel (2020). We find in our panel of German labour market regions that workforce mean age has considerable negative effects on the wage returns to age. We also obtain suggestive evidence that relative employment rates of older workers decline when mean age rises. A decomposition of the heterogeneous regional trends using our estimates shows that ageing of rural regions is mainly driven by supply (reflecting local population dynamics) whereas urban ageing is driven by demand (reflecting responses to economic conditions). We discuss the differential implications of these drivers for regional policy.

Versions: Published version see here. Also published earlier as IZA Discussion paperZA DP No. 13883

Demographic Ageing and the Polarization of Regions - An Exploratory Space-Time Analysis” (joint with Roberto Patuelli), 2015, Environment and Planning A, 47 (5), 1192-1210.

AbstractDemographic ageing is expected to affect labour markets in very different ways on a regional scale. Contributing to this debate, we explore the spatio-temporal patterns of recent distributional changes in the worker age structure and innovation output for German regions by conducting an Exploratory Space-Time Data Analysis (ESTDA). Besides commonly used tools, we apply newly developed approaches which allow investigating joint dynamics of the spatial distributions. Overall, we find that innovation hubs tend to be located in areas with high skill concentrations, but also seem to coincide with favourable demographic age structures. We show that these concentrations are persistent over time due to clusterwise path dependence and spatial contagion forces. The spatio-temporal patterns speak in favour of a demographic polarization process of German regions where the post-reunification East-West divide is increasingly turning into a rural-urban divide.

Versions: published version here.

Can Regional Employment Disparities Explain the Allocation of Human Capital Across Space?” (joint with Melanie Arntz and Florian Lehmer), 2014, Regional Studies, 48 (10), 1719-1738.

Abstract:   This paper examines the determinants of skill-selective regional migration in a context where modelling the migration decision as a wage-maximizing process may be insufficient due to persistent employment disparities. Based on a Borjas-type framework it is shown that high-skilled workers are disproportionately attracted to regions with higher mean wages and employment chances as well as higher regional wage and employment inequalities. Estimates from a labour flow fixed-effects model and a general methods of moments (GMM) estimator show that these predictions hold, but only employment disparities induce a robust and significant skill sorting. The paper thus establishes a missing link about why employment disparities may actually be self-reinforcing. 

Versions: published version here.

"The Minimum Wage Affects Them All: Evidence on Employment Spillovers in the Roofing Sector” (joint with Bodo Aretz and Melanie Arntz), 2013, German Economic Review, 14 (3), 282-315.

Abstract:  This study contributes to the sparse literature on employment spillovers of minimum wages. We exploit the minimum wage introduction and subsequent increases in the German roofing sector that gave rise to an internationally unprecedented hard bite of a minimum wage. We look at the chances of remaining employed in the roofing sector for workers with and without a binding minimum wage and use the plumbing sector that is not subject to a minimum wage as a suitable benchmark sector. By estimating the counterfactual wage that plumbers would receive in the roofing sector given their characteristics, we are able to identify employment effects along the entire wage distribution. The results indicate that the chances for roofers to remain employed in the sector in eastern Germany deteriorated along the entire wage distribution. Such employment spillovers to workers without a binding minimum wage may result from scale effects and/or capital–labour substitution.

Versions: published version here.

"The Minimum Wage in the Roofing Sector: Impact on Employment, Worker Protection and Competition” (joint with Bodo Aretz, Melanie Arntz and Christian Rammer), 2012, Journal for Labour Market Research, 45 (3), 233-256. 

AbstractThe Minimum wage in the roofing sector, which was introduced in 1997 and transferred to a national and generally binding level in 2003, has particularly affected the sector in Eastern Germany, even in an international comparison. However, the concomitant effective cost burden is limited. Based on difference-in-differences estimations in comparison to an ancillary construction sector that is not affected by minimum wages as well as based on a comparison of workers in the roofing sector who have been affected by minimum wage introduction to different degrees, causal effects with regard to employment, worker protection and competition are investigated. The results show that the wage increases associated with the minimum wage introduction only partially compile into earnings increases. Moreover, the overall employment situation does not seem to change even though some negative employment results can be detected for workers affected by binding minimum wages. This might be due to the fact that, at least partially, cost increases caused.

Versions: published version here.

 Publications in non-refereed Journals

"Digitalisierung in der Covid-19-Pandemie Corona hat den digitalen Graben zwischen den Betrieben vertieft. (joint with Melanie Arntz, Michael Böhm, Georg Graetz, Jan Moritz Johanning, Florian Lehmer, Cäcilia Lipowski, Britta Matthes and Nick Niers), IAB Kurzbericht 4, 2023. 

Abstract (German): Um in der Covid-19-Pandemie bestehen zu können, mussten Betriebe in digitale Technologien investieren. Offen ist bislang, ob der „digitale Graben” zwischen den Betrieben dadurch tiefer geworden ist – ob also digitalisierungserfahrene Betriebe stärker in eine weitere Digitalisierung investiert haben als Betriebe, die vor der Pandemie noch keine Erfahrung mit dem Einsatz solcher Technologien gemacht hatten. Diese Frage kann erstmals mit Daten der neuen IAB-IZAZEW-Betriebsbefragung „Arbeitswelt 4.0“ untersucht werden.  

In aller Kürze ● Während der Covid-19-Pandemie kam es nur in wenigen Betrieben zu einem Digitalisierungsschub. Das zeigen Ergebnisse der neuen Betriebsbefragung „Arbeitswelt 4.0“, die das IAB gemeinsam mit dem ZEW und dem IZA durchgeführt hat. ● Betriebe haben überwiegend in Technologien investiert, die es den Beschäftigten ermöglichen, ihre Arbeit im Homeoffice zu erledigen – insbesondere um digital kommunizieren und kooperieren zu können. Dementsprechend war der coronabedingte Digitalisierungsschub deutlich stärker in Betrieben, in denen die anfallenden Arbeiten zu einem größeren Anteil im Homeoffice getätigt werden konnten. ● Vor allem Betriebe, die vor der Pandemie schon Erfahrung mit computergestützten, intelligenten sogenannten 4.0-Technologien gesammelt hatten, haben coronabedingte Investitionen getätigt. Damit hat sich der „digitale Graben“ zwischen den Betrieben während der Pandemie vertieft. ● Betriebe, die hinter dieser Entwicklung zurückbleiben, laufen Gefahr, Marktanteile zu verlieren und langfristig vom Markt zu verschwinden. Den Beschäftigten dieser Betriebe drohen nicht nur Lohneinbußen. Bei einer Betriebsschließung oder Entlassung finden sie sich mit veralteten Fähigkeiten auf dem Arbeitsmarkt wieder.

Press: IAB press release, Süddeutsche Zeitung

"Digitalisierung und die Zukunft der Arbeit" (joint with Melanie Arntz and Ulrich Zierahn), 2020, Wirtschaftsdienst, 100(13), 41–47.

Abstract (German): Durch eine rasant wachsende Rechenleistung können immer mehr Tätigkeiten, die bislang dem Menschen vorbehalten schienen, mittels Maschinen und Algorithmen automatisiert werden. Dieser technologische Wandel hat eine öffentliche Debatte über mögliche Arbeitsplatzverluste und eine drohende Massenarbeitslosigkeit entfacht. Solche Hiobsbotschaften sind aus wissenschaftlicher Sicht aus vier Gründen deutlich überzogen: Erstens werden die technologischen Potenziale zur Automatisierung von Jobs vielfach deutlich überschätzt. Zweitens wird noch lange nicht jedes Automatisierungspotenzial tatsächlich in der betrieblichen Praxis genutzt. Drittens verhindert eine sich immer wieder flexibel anpassende Arbeitsteilung zwischen Mensch und Maschine vielfach Arbeitsplatzverluste. Und viertens setzt Automatisierung Kompensationsmechanismen frei, die dem ursprünglichen Verdrängungseffekt entgegenwirken. Ein Ende der Arbeit ist daher trotz stetig wachsender technischer Möglichkeiten nicht in Sicht, auch wenn dieser tiefgreifende Strukturwandel Arbeitskräfte vor neue Herausforderungen stellt. 

"Digitization and the Future of Work: Macroeconomic Consequences" (joint with Melanie Arntz and Ulrich Zierahn), 2019, in: Handbook of Labor, Human Resources and Population Economics.

Abstract: Computing power continues to grow at an enormous rate. Simultaneously, more and better data is increasingly available and Machine Learning methods have seen significant breakthroughs in the recent past. All this pushes further the boundary of what machines can do. Nowadays increasingly complex tasks are automatable at a precision which seemed infeasible only few years ago. The examples range from voice and image recognition, playing Go, to self-driving vehicles. Machines are able to perform more and more manual and also cognitive tasks that previously only humans could do. As a result of these developments, some argue that large shares of jobs are “at risk of automation”, spurring public fears of massive job-losses and technological unemployment. This chapter discusses how new digital technologies might affect the labor market in the near future. First, the chapter discusses estimates of automation potentials, showing that many estimates are severely upward biased because they ignore that workers in seemingly automatable occupations already take over hard-to-automate tasks. Secondly, it highlights that these numbers only refer to what theoretically could be automated and that this must not be equated with job-losses or employment effects – a mistake that is done often in the public debate. Thirdly, the chapter develops scenarios on how digitalization is likely to affect the German labor market in the next five years and derives implications for policy makers on how to shape the future of work. Germany is an interesting case to study, as it is a developed country at the technological frontier. In particular, the main challenge will not be the number, but the structure of jobs and the corresponding need for supply side adjustments to meet the shift in demand both within and between occupations and sectors.

Versions: published version here.

"No need for automation angst but automation policies" (joint with Daniel Arnold, Melanie Arntz, Susanne Steffes und Ulrich Zierahn), 2018, in: Max Neufeind, Jacqueline OReilly, Florian Ranft, Work in the Digital Age, Challenges of the Fourth Industrial Revolution, Rowman and Littlefield International, London, New York.

Abstract: Technological change is increasingly turning the value chain into an automated and digitalised process. The digitalisation and automation of manufacturing processes is characterised by the use of increasingly autonomous systems and robots, as well as fully automated smart factories (Industry 4.0), which are interconnected with upstream and downstream business divisions. Similarly, service providers have been using intelligent software and algorithms on the basis of large volumes of data and web interfaces to digitalise and automate business processes. To this effect, businesses make use of big data analysis software, cloud computing systems or online platforms, to give but a few examples. In view of these technological developments – sometimes referred to as technologies of the fourth industrial revolution – an increasing number of concerns have been voiced in the public debate that this might lead to many jobs becoming redundant in the future. The idea of ‘technological unemployment’ is supported by a number of US studies which suggest that almost 50% of jobs are at risk of being replaced by new digital technologies (Frey and Osborne 2017). This raises a number of questions for both political decisionmakers and the general public: is it true that automation and digitalisation will result in major job losses? And if so, which jobs are at risk? In what ways are technological developments changing work processes and content? How will this affect qualification and skills requirements? Do we need to adapt in order to guarantee employee job security? This essay sheds some light on these questions. 

"Betriebe und Arbeitswelt 4.0: Mit Investitionen in die Digitalisierung steigt auch die Weiterbildung" (joint with Simon Jansson, Ute Leber, Melanie Arntz and Ulrich Zierahn), 2018, IAB-Kurzbericht 26/2018, 1-8.

Abstract (German): Moderne Technologien – wie cyberphysi­sche Systeme und künstliche Intelligenz – finden immer mehr Anwendungen in deutschen Betrieben. Sie könnten viele Tätigkeiten, die heute noch von Menschen ausgeübt werden, ersetzen und zugleich neue Aufgabenfelder schaffen. Dies stellt die Betriebe und ihre Beschäftigten vor große Herausforderungen. Insbesondere gewinnt die Qualifizierung der Mitarbei­ter an Bedeutung, damit diese mit dem technologischen Wandel Schritt halten können. 

"Arbeitswelt 4.0: Wohlstandszuwachs oder Ungleichheit und Arbeitsplatzverlust – was bringt die Digitalisierung?" (joint with Oliver Stettes, Melanie Arntz, Ulrich Zierahn, Katharina Dengler, Daniel Veit, Werner Eichhorst and Ulf Rinne), 2017, ifo Schnelldienst 7, 3-18.

Abstract (German): Der rasante technologische Fortschritt bringt immer neue Technologien hervor, mit denen Wertschöpfungs-prozesse automatisiert werden können. Im Produktionsbereich zählen dazu selbststeuernde Anlagen und Roboter bis hin zu vollautomatisierte und vernetzte »Smart Factories« (Industrie 4.0). Im Dienstleistungsbereich sorgen intelligente Software und Algorithmen für die Digitalisierung und Automatisierung von Geschäftsprozessen, etwa mit Hilfe von Big Data, Cloud-Computing Systeme oder Online-Plattformen. Vor dem Hintergrund dieser technologischen Entwicklungen werden in der öffentlichen Debatte vermehrt Befürchtungen laut, dass in Zukunft viele Arbeitsplätze ersetzt werden könnten. Für Politik und Gesellschaft drängen sich damit eine Reihe von Fragen auf, die im vorliegenden Beitrag diskutiert werden: Führt Automatisierung und Digitalisierung zum Abbau von Arbeitsplätzen? Welche Arbeitsplätze sind gefährdet? Wie ver-ändern sich die Arbeitsprozesse und -inhalte im Zuge des Wandels? Wie verändern sich Qualifikations- und Kompetenzanforderungen? Besteht Anpassungsbe-darf zur Sicherung der Beschäftigungsfähigkeit von Arbeitskräften? 

Arbeitswelt 4.0 – Stand der Digitalisierung in Deutschland: Dienstleister haben die Nase vorn” (joint with Melanie Arntz, Florian Lehmer, Britta Matthes and Ulrich Zierahn), 2016, IAB Kurzbericht 22/2016.

Abstract (German): Mögliche Folgen der zunehmend automa-tisierten und digitalisierten Arbeitswelt werden gegenwärtig intensiv diskutiert. Dabei stand bislang die Frage nach dem technisch Machbaren im Mittelpunkt. Ob dies jedoch Realität wird, hängt vor allem auch von den Investitionsentscheidungen der Betriebe ab. Bisher gibt es kaum Daten zum tatsächlichen Einsatz moderner digitaler Technologien in den Betrieben in Deutschland und dazu, wie sie die Chancen und Risiken einer Nutzung dieser Technologien einschätzen. Eine aktuelle Betriebsbefragung zur „Arbeitswelt 4.0“ liefert nun erstmals repräsentative Ergebnisse zu diesen Themen.

In press: FAZ.net, Wirtschaftswoche.

Selektive Arbeitskräftemobilität in Deutschland: Beschäftigungschancen sind wichtiger als der Lohn” (joint with Melanie Arntz and Florian Lehmer), 2012, IAB-Kurzbericht, 13, 1-8.

Abstract (German): Die wirtschaftliche Prosperität von Regio­nen hängt unter anderem davon ab, ob sie ein attraktiver Standort für (Hoch­) Qua lifizierte sind. Für die Gestaltung po­litischer Maßnahmen, die Brain­Drain­Phänomenen entgegenwirken sollen, ist es wichtig zu wissen, was die Wanderung von Arbeitskräften bestimmt. In diesem Beitrag wird deshalb untersucht, wie sich regionale Unterschiede in der Lohn­ und Be schäftigungsverteilung auf die Bildungs­struktur in den Arbeitskräftebewegungen auswirken.