The effect of broadband infrastructure on entrepreneurial activities: The case of Germany

This paper investigates whether the local infrastructure favours entrepreneurial activities. Besides the physical and knowledge infrastructure we take into account a county's broadband availability by building an index which accounts for county-related specificities. We find that broadband availability fosters entrepreneurial activities particularly in high-tech sectors for which efficient ways of knowledge transfer is crucial. --broadband provision,physical and knowledge infrastructure,local entrepreneurial activities

Occupational Skills and the Evolution of Wages

The US and many European countries are witnessing substantial changes in the wage structure (Autor et al. 2006; Dustmann et al., 2009). Previous research has focused on changing returns to education and experience (Katz and Murphy, 1992), changes in the workforce composition (Lemieux, 2006), or the decline in unionization (DiNardo et al., 1996) as possible explanations for the observed changes. Until recently, little attention has been paid to the potential role of the returns to skills. However, the demand for different skills has shown vivid dynamics both within and between industries (Autor et al., 2003). A prominent idea in the more recent literature is that structural changes have depressed the relative demand for certain types of tasks performed on the job. A common finding is that returns to routine tasks have been decreasing over time, while returns to abstract tasks have been increasing. Yet, measuring and defining different types of task categories has been proven to be empirically difficult (Autor, 2013). In our study, we avoid potential measurement issues by using a skill approach as opposed to a task approach to characterize occupations. Instead of focusing on the tasks performed on the job, we examine the skills that individuals acquire during their education. For our empirical analysis we use the Sample of Integrated Labour Market Biographies (SIAB), a sample of social security records in Germany from 1975 through 2008. The information on skills taught in an occupation come from the BIBB/IAB Employment Survey, a representative worker survey. We construct occupation-specific skill portfolios and identify changes in the skill portfolios over the observed time period. We then match the skill portfolios to the corresponding occupations in the SIAB, thereby following the procedure utilized in Gathmann and Sch nberg (2010). In the descriptive analysis, we provide evidence that both the wage level across occupations and the skill portfolios within the same occupation have changed substantially over the observed time period. Then, we investigate whether the observed are related. Following Firpo et al. (2011), we run regressions of wage changes on the base period wage for each percentile of the within-occupation wage distribution and link the estimated intercepts and slopes to the skill portfolios of each occupation. Our results suggest that overall skills that used to be valuable in low-wage occupations have decreased in value, while the opposite has happened in high-wage occupations. Finally, we use a decomposition method based on the re-centered influence function regression approach by Firpo et al. (2007; 2009) to explicitly quantify the contribution of the skill portfolios to changes in the wage structure. Quantifying the contribution of single skills to the evolution of wages allows us to better understand why some occupations have experienced sharp decreases in wages, while others have experienced sharp increases. We thereby contribute to the recent literature on wage inequality. Finally, calculating skill prices can provide guidance for policy makers on how to design training curricula

The Effect of Broadband Infrastructure on Entrepreneurial Activities: The Case of Germany

This paper investigates whether the local infrastructure favours entrepreneurial activities. Besides the physical and knowledge infrastructure we take into account a county’s broadband availability by building an index which accounts for county-related specificities. We find that broadband availability fosters entrepreneurial activities particularly in high-tech sectors for which efficient ways of knowledge transfer is crucial

Occupational Specificity: A new Measurement Based on Training Curricula and its Effect on Labor Market Outcomes

This paper proposes a new measurement for the specificity of occupations based on a content analysis of training curricula that we link to labor market demands. We apply Lazear’s (2009) skill weights approach and test predictions on labor market outcomes derived from his theory. We find clear evidence of a trade-off between earning higher returns with more specific training and higher occupational mobility with less specific training. Our measure improves the micro-foundation of human capital specificity and provides an evidence-based approach to evaluate the specificity of training curricula

Wages and employment: The role of occupational skills

How skills acquired in vocational education and training (VET) affect wages and employment is not clear. We develop and estimate a search and matching model for workers with a VET degree. Workers differ in interpersonal, cognitive and manual skills, while firms require and value different combinations of these skills. Assuming that match productivity exhibits worker-job complementarity, we estimate how interpersonal, cognitive and manual skills map into job offers, unemployment and wages. We find that firms value cognitive skills on average almost twice as much as interpersonal and manual skills, and they prize complementarity in cognitive and interpersonal skills. The average return to VET skills in hourly wages is 9%, similar to the returns to schooling. Furthermore, VET appears to improve labour market opportunities through higher job arrival rate and lower job destruction. Workers thus have large benefits from acquiring a VET degree

Regional Innovation Effects of Applied Research Institutions

We analyze the effect of applied research institutions on regional innovation activity. Exploiting a policy reform that creates tertiary education institutions conducting applied research, the Universities of Applied Sciences (UASs) in Switzerland, we apply difference-in-differences estimations to investigate the effect on innovation quantity and quality. Findings show a 7.7 to 13 percent increase in regional patenting activity (i.e., quantity), and a 1.3 to 11 percent increase in patent family size, and the number of granted patents, claims, and citations per patent (i.e., quality). Findings are robust to various model specifications, suggesting that applied research taught in UASs boosts regional innovation

Labour market transitions after layoffs: the role of occupational skills

We study the role of occupational skills for labour market transitions after layoffs. Drawing on Lazear’s skill-weights approach, we develop empirical measures for occupational specificity and the skill distance between occupations to investigate how skills map into job mobility and wages. Our analysis reveals several important insights. First, higher occupational specificity is associated with lower job mobility and a longer period of unemployment. However, it is also associated with higher wages. Workers receive a wage premium of about 9% for re-employment in a one standard deviation more specific occupation. These results suggest a risk–return trade-off to educational investments into more specific skills. Second, the skill distance is negatively associated with wages. Workers moving between occupations with similar skill requirements suffer smaller wage losses than those with more distant moves. Thus, skills appear to be transferable across occupations and to play a pivotal role in the determination of wages

Immigration and Federalism in Canada: beyond Quebec Exceptionalism?

The paper focuses on Canadian Provinces’ role in migrant selection. After an asymmetric approach, that benefited only Quebec, the federal government granted devolutionary powers in migrant selection to the other Provinces as well, moving towards de facto asymmetry. This process has proved to be successful over the years, but recently the federal government has reacted, recentralizing some aspects of immigration policy. This does not apply to Quebec

Demographics and the current account

This paper investigates the relationship between demographics and the current account. We analyze the impact of recent demographic changes and provide a forecast of its future impact. Overall, we find a strong and robust, non-linear demographic effect. In particular, we find a positive association between the current account and the share of a population's prime-age individuals and a negative association with the share of the elderly. Our forecast suggests that, given the dramatically aging population in most industrialized countries, demographics will likely decrease the current account balance in the near future in those countries