By investing in urban amenities, city-level policies often aim to attract highly skilled workers.However, studies relying on revealed preferences struggle to provide causal evidence that skilled workers value urban amenities more than less skilled workers. Therefore, we use a statedpreference experiment with hypothetical job choices between two cities that differ in wages, urban amenities and economic dynamism. We find that respondents are willing to forgo a significant fraction of their wages for better urban amenities. Most strikingly, preferences do not differ systematically by skill level. Hence, the higher fraction of highly skilled workers in amenity rich places stems from the inability of low-skilled workers to move to and afford living in their preferred locations.
Employment responses to the COVID-19 crisis differed widely across German local labour markets at the beginning of the pandemic, with differences in short-time work rates of up to 20 percentage points. We show that digital capital, and to a lesser extent working-from-home, were essential for the resilience of local labour markets. Using an empirical strategy that combines a difference-in-differences approach with propensity score weighting, we find that local exposure to digital capital reduced short-time work usage by up to 4 percentage points and the effect lasted for about 8 months. Working-from-home potential lowered short-time work rates, but only in local labour markets exposed to digital capital, and in the first four months of the pandemic when a strict lockdown was in place. Differences in unemployment rates across local labour markets were at most 2 percentage points and did not depend on digital capital or working-from-home potential.Evolution of the East German Wage Structure - ZEW Discussion Paper No. 20-081(with Christina Gathmann)
We analyze the evolution of the wage and employment structure in East Germany over the past two decades and compare it to West Germany. Our results suggest that wage inequality in the East exceeds that in the West, especially at the top of the wage distribution. We also show that wage inequality is no longer rising in Germany and even declining in East Germany after 2009. Third, unemployment rates have been declining drastically over the past decade in all of Germany but even more so in East Germany. Changes along the supply side seem to play some role for the evolution of wages, especially in the 1990s. Yet, institutional changes, esp. the introduction of sectoral minimum wages, seem to be an important driver of the recent declines in wage inequality in East Germany; in West Germany in tun, demand shifts and esp. routinization are important to explain recent wage changes.Restrictions of Fixed Term Employment Contracts: Evidence from a German Reform - ZEW Discussion Paper No. 19-034
This paper examines the impact of legal restrictions on fixed-term contracts on employment, wages and the careers of labour market entrants. Specifically, I analyse a 2001 German reform that made it more difficult for establishments that are not subject to employment protection to hire workers on fixed-term contracts. Using a Difference-in-Differences approach, which compares establishments subject to employment protection with those that are not both before and after the reform, I find that the reform has reduced the use of fixed-term contracts, but has not markedly changed net employment. However, the reform has had positive effects on the career stability of post-reform labour market entrants.A Novel Approach to Estimate Labor Supply Elasticities: Combining Data from Actual and Hypothetical Choices(with Christina Gathmann)
We propose a novel approach to estimate labor supply elasticities and to separate preferences for leisure from frictions. To identify preferences for leisure, we present respondents of a representative panel survey with a sequence of hypothetical labor supply choices. We then combine our estimates with data on observed labor supply choices to identify the size of frictions. Our preliminary results show that preferences for leisure from hypothetical choices are larger than those from observed choices pointing to the importance of optimization errors. We also document that preferences for leisure differ substantially along observable and unobservable dimensions. These results suggest that estimates from local variation might not be a good proxy for labor supply responses in the broader population.Entry Regulations and the Provision of Medical Services(with Davud Rostam-Afschar and Oliver Schlenker )
We examine the impact of entry restrictions for general practitioners (GP) on the accessibility of medical services and health outcomes using the demand-planning system in Germany. This system regulates the number of patients per GP in a given region by automatically blocking entry for new practitioners if the planning target is exceeded by 10%. We use a regression discontinuity design to estimate the causal effects of the reduced probability to open new practices on the quality of medical services and population health outcomes. We find that the ratio of people to GPs, consultation hours, and subjective ratings do not vary at the threshold. Life expectancy for blocked regions decreases by 0.1 years and cause-specific mortality rates increase for conditions that are preventable through GP care. The results suggest that blocking entry is not only theoretically equivalent to subsidies as an instrument for the distribution of medical services but also has only small effects on both subjective and objective health care quality.