The book ”Capital in the 21. Century” by Piketty (2014) marked the peak of attention for the topic of income inequality and spread awareness on the importance of ongoing research. During my master thesis, I had worked on decomposition methods for labor earnings. Motivated by this development in the literature and first experiences in academic research, I started working on income inequality as a topic for a Ph.D. thesis. The first project developed directly from the question how income inequality in Germany had developed over the last decade. Since 2005, we observed a growing labor market and economic recovery from the recession in the early 2000s. Given these increasing employment opportunities, we analyzed how income inequality developed. Our main finding was that income inequality did not increase further after 2005. On the one hand, within-year employment opportunities compensated otherwise rising inequality in annual labor incomes. On the other hand, income inequality did not decrease at all, because all parts of the income distribution benefited from the economic boom after 2006.
The concept of equality of opportunity (EOP) is directly related to income inequality and labor market development. A natural question is the dependence of inequality in adult outcomes on family background and childhood circumstances when working on income inequality and its underlying causes. The literature on EOP divides all potential determinants of adult outcomes in two main categories, circumstances and effort. The former comprise of all factors outside the realm of personal responsibility for which society should not hold people responsible, such as parental education. The latter represents personal choices and effort independent of circumstances. Total equality of opportunity would exist if inequality in adult income depended on effort. As I was interested in income inequality in the household context as well, the second project stemmed from the question how measurement of EOP depends on the partner in a relationship. We found that taking into account the spouse in measuring EOP matters empirically and from a theoretical perspective.
A prominent circumstance in the EOP literature is the country of origin. The increasing refugee migration all over Europe and Germany in particular raised the question which opportunities these newly arriving immigrants would face. Working on such timely events has benefits and disadvantages. On the one hand, one is sure to
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work on the frontier of applied research and social debate. On the other hand, data is scarce and the consequences of events cannot fully be observed immediately. Hence, we started to work on the short-terms effect of increased refugee migration to Germany in terms of employment, crime, and voting behavior. Our analysis indicates a small effect on crime rates, mostly around reception centers and with respect to drug crimes. The results on labor market integration showed an increase in foreign job seekers.
The recognition of refugee status is the necessary premise for labor market integration, but not necessarily sufficient. Extensive research has been conducted on the integration of refugees into the labor market and society. However, no consensus has been reached which factors perform best at facilitating job search and employment prospects. Many governments around de world use allocation schemes in order to pre- vent the formation of enclaves. In 2016, also the German government implemented a residency obligation for accepted refugees. The last chapter of my Ph.D. thesis is about the effectiveness of such an allocation scheme in fostering labor market integration and preventing criminal behavior of accepted refugees. Thereby, I combine insights from previous work in the final chapter. So far, I find a small but significantly positive effect of a residency obligation on employment prospects
