Research

Abstract A large literature suggests that growing international trade is among the drivers of rising labor earnings inequality within countries. We contribute to this literature by studying the distributional effects of Germany’s trade integration with China and Eastern Europe. We provide evidence that the trade shock explains 5–18% of the rise in earnings inequality between individual workers. However, when we take risk sharing between partners into account, we find that the inequality-increasing effect of the trade shock is up to 42% lower. Our results therefore suggest that a pure worker-level perspective which ignores risk sharing might give an incomplete picture of the distributional effects of international trade.

In:  European Economic Review, 2019, 111, 305-335. 

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Abstract This study examines the effect of substantial changes in parental leave regulations on the non-cognitive development of children aged between 0 and 3 years. I exploit a large and unanticipated parental leave reform in Germany as a natural experiment. Since the first of January 2007, the replacement of a means-tested by an earnings-related system led to a gain in benefits for wealthier families whereas needier parents receive a lower overall benefit amount than before the reform. I detect a significant negative effect of this change in the parental leave system on the socio-emotional development of newborns and it turns out that children from loser-families drive this effect. The parental leave reform does not have a significant impact on 2–3-year-olds’ skills and development on average and the difference between children from losers and winners does also not persist in the longer run. I only find suggestive evidence that an increase in benefits improves some skills of 2–3-year-olds if compared to those who experience reductions in benefits.

In: Review of Economics of the Household, 2019, 17(1), 89-119. 

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Abstract Surveys are an indispensable source of data for applied economic research; however, their reliance on self-reported information can introduce bias, especially if core variables such as personal income are misreported. To assess the extent and impact of this misreporting bias, we compare self-reported wages from the German Socio-Economic Panel (SOEP) with administrative wages from social security records (IEB) for the same individuals. Using a novel and unique data linkage (SOEP-ADIAB), we identify a modest but economically significant reporting bias, with SOEP respondents underreporting their administrative wages by about 7.3%. This misreporting varies systematically with individual, household, and especially job and firm characteristics. In replicating common empirical analyses in which wages serve as either dependent or independent variables, we find that misreporting is consequential for some, but not all estimated relationships. It turns out to be inconsequential for examining the returns to education, but relevant for analyzing the gender wage gap. In addition we find that misreporting bias can significantly affect the results when wage is used as the independent variable. Specifically, estimates of the wage-satisfaction relationship are substantially overestimated when based on survey data, although this bias is mitigated when focusing on interpersonal changes. Our findings underscore that survey-based measures of individual wages can significantly bias commonly estimated empirical relationships. They also demonstrate the enormous research potential of linked administrative-survey data. 

Revise & Resubmit at Journal of Labor Economics.

arXiv:2411.04751 (last updated in November 2024)

Abstract This study investigates the impact of public child care on maternal employment and career trajectories in West Germany, focusing on qualitative dimensions such as job responsibilities and task content of the job. Using an event study methodology and combining social security and county-level child care data, we analyze the effects of child care reforms on mothers up to ten years post-childbirth. While public child care significantly accelerates mothers' return to the labor market, it does not enhance average career quality indicators such as managerial roles, employment in jobs with abstract tasks, or wage positioning within the firm. Notably, mothers in flexible, family-friendly work environments gain the most from child care reforms, benefiting from improved career continuity and access to demanding jobs. Conversely, mothers in occupations with high career penalties see limited advantages. These findings highlight the interplay between public policy and labor market structures in shaping gender equality. The results suggest that public child care needs to be complemented by workplace flexibility to optimize career outcomes for mothers. Robustness checks confirm the validity of the findings, accounting for pre-birth differences, selective migration, and fertility impacts. This work extends existing literature by exploring long-term effects on both employment rates and career quality, emphasizing the need for integrated policy and organizational reforms to promote gender equity.

IZA DP No. 16433, earlier version available as CEPA DP No. 64.

Media Coverage: idw, Digitales Forschungsmagazin University of Passau, Bildungsklick.

Abstract We examine how gender shapes managers’ decisions regarding on-the-job training using a discrete choice experiment embedded in a representative survey of German firms. While previous research on training has focused on employees’ demand for it, we make a contribution by studying firms’ supply of training. In our vignette study, 1,144 managers evaluate hypothetical candidate profiles that differ by gender, age, competence, job mobility, and training characteristics. We find that women are somewhat more likely than men to receive training offers. The exceptions are that female managers are more reluctant to choose young women for training, while male managers favor male candidates for fully employer-funded training. These patterns persist across various model specifications and remain robust when controlling for observable manager characteristics. Heterogeneity analyses reveal that female managers are more reluctant to offer training to women when they operate in competitive product markets, male-dominated industries, and firms without collective bargaining agreements. More broadly, our results highlight that managers influence not only how much training is undertaken, but also how training opportunities are distributed among employees. This has the potential to create gender disparities in early career development that may have implications for organizational equity.

CEPA DP No. 90, IZA DP No. 18019

Abstract This paper examines how worker and firm characteristics shape workers' participation in on-the-job training in the context of Germany's dynamic labor market transformations, including technological advancements, automation, and globalization. Utilizing the novel SOEP-CMI-ADIAB7521 dataset, which integrates detailed survey data on individuals with their administrative employment histories and the firm environment, we explore whether the individual worker's decision to participate in training is determined rather by the worker's characteristics or by the firm environment. Due to the linked nature of our dataset, we are also able to investigate the role of interactive effects of worker and firm characteristics. In addition, we exploit exogenous industry-level variation in exposure to trade shocks and robot penetration that we use as proxies for the need to update skills to estimate causal effects in instrumental variable strategies. This paper delivers three main results. First, we provide evidence that training participation depends up to 30% on worker characteristics, 34% on job and occupational information and 25% on the firm environment. Second, some relevant individual characteristics like the worker's gender affect training decisions differently depending on the firm environment which further highlights the importance of the worker-firm interplay for training participation. Finally, behavioral traits such as locus of control moderate training responses to exogenous labor market shocks, including trade and automation exposure. Specifically, while increased import exposure raises training participation, export exposure dampens it, and these effects vary by workers' locus of control. These insights underscore the need for targeted, context-sensitive policies that integrate worker traits and firm environments to enhance on-the-job-training uptake and align workforce skills with evolving labor market demands.