We develop a two-sector endogenous growth model with a dual labour market resulting from the presence of an effort extraction function in one sector. Effort of workers can be influenced by pay and monitoring. This results in an endogenous non-competitive wage differential between sectors and a...

The Swedish adult education program known as the Knowledge Lift (1997--2002) was unprecedented in its size and scope, aiming to raise the skill level of large numbers of low-skill workers. This paper evaluates the potential effects of this program on aggregate labour market outcomes. This is...

We survey the recent literature on the effects of active labour market policies on individual labour market outcomes like employment and income, for adult female individuals without work in European countries. We consider skill-training programs, monitoring and sanctions, job search assistance,...

This discussion paper has resulted in an article in 'Economica', 2002, 69(273), 21-40.

In this paper we study the economic effects of risk attitudes, time preferences, trust and reciprocity while we compare natives and second generation migrants. We analyze an inflow sample into unemployment in Germany, and find differences between the two groups mainly in terms of risk attitudes...

This Paper presents a methodology to identify net demand shocks as well as wage rigidities in heterogeneous labour markets on the basis of nonparametric regression. We show how this approach can be used to make suggestions for immigration policy in economies with labour market rigidities. In an...

This paper analyzes the reservation wages of first and second generation migrants. Based on recently collected and rich survey data of a representative inflow sample into unemployment in Germany, we empirically test the hypothesis that reservation wages increase from first to second generation...

We argue that firms’ balance sheets were instrumental in the propagation of shocks during the Great Recession. Using establishment-level data, we show that firms that tightened their debt capacity in the run-up (“high-leverage firms”) exhibit a significantly larger decline in employment in...

We investigate experimentally the economic effects of wage taxation to finance unemployment benefits for a closed economy and an international economy. The main findings are the following. (i) There is clear evidence of a vicious circle in the dynamic interaction between the wage tax and...

Germany experienced an even deeper fall in GDP in the Great Recession than the United States, with little employment loss. Employers’ reticence to hire in the preceding expansion, associated in part with a lack of confidence it would last, contributed to an employment shortfall equivalent to...