Imperfect Information and the Meltzer-Richard Hypothesis

Despite a strong theoretical prediction that income skewness and redistribution should be positively linked, empirical evidence on this issue is mixed. This paper argues that it is important to distinguish between sources of changes in income skewness. Two sources of such changes are discussed: rising polarization and upward mobility, which both increase income skewness. Under imperfect information, these developments affect redistribution in different ways. While rising polarization increases redistribution, upward mobility can have the opposite effect. Reasonable degrees of informational imperfection are sufficient to generate increasing income skewness and decreasing redistribution in the presence of upward mobility.Voting; redistribution; imperfect information

Inattentive Voters and Welfare-State Persistence

Welfare-state measures often tend to persist even when they seem to have become suboptimal due to changes in the economic environment. This paper proposes an information-based explanation for the persistence of the welfare state. I present a structural model where rationally inattentive voters decide upon implementations and removals of social insurance. In this model, welfare-state persistence arises from disincentive effects of social insurance on attentiveness. The welfare state crowds out private financial precautions and with it agents‘ attentiveness to changes in economic fundamentals. When welfare-state arrangements are pronounced, agents realize changes in economic fundamentals later and reforms have considerable delays.Welfare state; voting; imperfect information

Sticky Prices vs. Sticky Information – A Cross-Country Study of Inflation Dynamics

This paper empirically compares sticky-price and sticky-information Phillips curves considering inflation dynamics in six countries (US, UK, Germany, France, Canada, and Japan). We evaluate the models‘ abilities to match empirical second moments of inflation. Under baseline calibrations, the two models perform similarly in almost all countries. Under estimated parametrizations, sticky information performs better in France while sticky prices dominate in the UK and Germany. Sticky prices match unconditional moments of inflation dynamics better while sticky information is more successful in matching co-movement of inflation with demand. Both models‘ performances worsen where inflation dynamics diff er from the US benchmark.Phillips curve; sticky information; sticky prices

Assortative Mating and Female Labor Supply

This paper investigates the pattern of wives' hours disaggregated by the husband's wage decile. In the US, this pattern has changed from downward-sloping to hump-shaped. We show that this development can be explained within a standard household model of labor supply when taking into account trends in assortative mating. We develop a model in which assortative mating determines the wage ratios within individual couples and thus the efficient time allocation of spouses. The economy-wide pattern of wives’ hours by the husband's wage is downward-sloping for low degrees, hump-shaped for medium degrees, and upward-sloping for high degrees of assortative mating. A quantitative analysis of our model suggests that changes in the gender wage gap are responsible for the overall increase in hours worked by wives. By contrast, the fact that wives married to high-wage men experienced the most pronounced increase is a result of trends in assortative mating.female labor supply, assortative mating, gender wage gap

Household Labor Supply and Home Services in a General-Equilibrium Model with Heterogeneous Agents

We propose a new explanation for differences and changes in labor supply by gender and marital status, and in particular for the increase in married women’s labor supply over time.We argue that this increase as well as the relative constancy of other groups’ hours are optimal reactions to outsourcing labor in home production becoming more attractive to households over time.To investigate this hypothesis,we incorporate heterogeneous agents into a household model of labor supply and allow agents to trade home labor. This model can generate the observed patterns in US labor supply by gender and marital status as a reaction to declining frictions on the market for home services.We provide an accounting exercise to highlight the role of alternative explanations for the rise in hours in a model where home labor is tradable.Labor supply, gender, home production, heterogeneity

Household Labor Supply and Home Services in a General-Equilibrium Model with Heterogeneous Agents

We propose a new explanation for differences and changes in labor supply by gender and marital status, and in particular for the increase in married women's labor supply over time. We argue that this increase as well as the relative constancy of other groups' hours are optimal reactions to outsourcing labor in home production becoming more attractive to households over time. To investigate this hypothesis, we incorporate heterogeneous agents into a household model of labor supply and allow agents to trade home labor. This model can generate the observed patterns in US labor supply by gender and marital status as a reaction to declining frictions on the market for home services. We provide an accounting exercise to highlight the role of alternative explanations for the rise in hours in a model where home labor is tradable.labor supply, gender, home production, heterogeneity

Minimum wages and female labor supply in Germany

We study the labor-supply effects of subsidized minimum wages in a structural household model with married and single households. In the model, married women's hours react relatively strongly to minimum wages due to substitution effects within the home production of couples while other population groups show ambiguous reactions. An empirical analysis for Germany shows that minimum wages would affect total labor supply only weakly while, in our baseline experiments, married women's average hours increase by 3-6%. Further, we finnd that costs of a subsidized minimum wage are high and increase sharply in its level while its labor-supply effects level out

Essays on Macroeconomics and Labor Markets

Over the last decades, the U.S. labor market has changed significantly. These developments can not only be attributed to cyclical components influencing labor market conditions during economic downturns but also partly to important and slow moving structural factors. How do changing labor markets affect workers? Discussing and answering this question is an important task for researchers, not only because labor earnings are a major source of income, making up around 60 percent of household income, but also because workers spent a large part of their lifetime at work, on average 34 hours a week for 38 years of their lives. I contribute to the understanding of changing labor markets by focusing on three specific aspects: technical change, selective hiring, and judicial ideology. While this thesis consists of three independent research papers, they are connected by an overarching focus on firms’ hiring behavior and associated consequences for workers’ employment conditions and opportunities. Chapter 2, which is joint work with Tobias Föll, explores the effect of routine-biased technical change on both the occupational and the union-membership choice of workers and thus analyses the connection between polarization and deunionization. In Chapter 3, I study the connection between involuntary part-time employment, workers’ job mobility, and the role of firms’ hiring behaviour. In Chapter 4, which is joint work with Christian Bredemeier and Tobias Föll, we examine how the ideological composition of the Supreme Court affects labor market conditions for workers in the U.S

Essays in Labor Economics and Labor Market Policy

The thesis 'Essays in Labor Economics and Labor Market Policy' contributes to the existing literature by advancing our understanding of the forces that have shaped labor market outcomes in recent decades. It consists of three independent research papers, which zoom in on the effects of financial frictions, routine-biased technical change, and judge ideology, respectively. My coauthors and I employ both empirical and analytical methods to analyze the underlying mechanisms and discuss appropriate policy implications. Chapter 2 of this thesis explores the joint role of imperfections in labor and financial markets for the cyclical adjustment of the labor market. I show that jobless recoveries emerge when, upon exiting a recession, firms are faced with deteriorating credit conditions. On the financial side, collateral requirements affect the cost of borrowing for firms. On the employment side, hiring frictions and wage rigidity increase the need for credit, making the binding collateral constraint more relevant. In a general equilibrium business cycle model with search and matching frictions, I illustrate that tightening credit conditions calibrated from data negatively affect employment adjustments during recovery periods. Wage rigidity substantially amplifies this mechanism, generating empirically plausible fluctuations in employment and output. In Chapter 3 of this thesis, using state-level labor market data, Anna Hartmann and I document a positive relationship between the two phenomena in the U.S.: the decrease in unionization rates has been significantly more pronounced in states with a higher employment share in routine-intensive occupations. Contrary to conventional wisdom, deunionization is mainly driven by large within-industry and within-occupation changes in union membership rates and not only by compositional effects. Building on this observation, we argue that the commonly assumed driver of polarization, routine-biased technical change, is also the main driving force behind the decline in union membership rates. In a model with search and matching frictions where workers choose occupations and endogenously form unions, we illustrate that shifts in the structure of labor demand in favor of low- and high-skill occupations worsen the bargaining position of unions and make participation in collective bargaining less attractive for workers. The ensuing within-industry and within-occupation decline in unionization rates in turn provides incentives for middle-wage workers to switch to low-wage occupations, which further amplifies job market polarization. In Chapter 4 of this thesis, Christian Bredemeier, Anna Hartmann, and I provide evidence on the systematic labor market effects of ideological tendencies of the judiciary, employing broad data on court rulings and labor market outcomes. Our identification strategy uses heterogenous effects of ideological shifts of the U.S. Supreme Court on U.S. district court rulings, which we derive from a theoretical model of judge decision making and document empirically. Exploiting this heterogeneity, we find that an increase in the share of conservative rulings substantially increases the employment rate and promotes labor market fluidity but also contributes to wage stagnation, job market polarization, deunionization, and rising income inequality. Our main empirical results can be rationalized in a search and matching model with wrongful-termination lawsuits

Bioenergie-Regionen stärken

Die Produktion und Bereitstellung holzbasierter Biomasse zur Energiegewinnung ist ein Baustein der Energiewende. Dabei spielen so unterschiedliche Herausforderungen wie Flächenverfügbarkeit, ökonomische Konkurrenzfähigkeit gegenüber anderen Landnutzungsformen bis hin zur öko logischen Verträglichkeit von Energieholz eine Rolle