We implement a laboratory experiment in which a principal has to decide on monitoring intensity and pay to investigate whether they are complements or substitutes. Wage level, monitoring intensity, and consequently the desired enforceable effort level are jointly determined by the maximization...

Local returns to scale in the labor market have been notoriously difficult to disentangle from increasing returns in the product market and from the spatial sorting of workers and firms as a source for regional variation in productivity. In this paper we use the introduction of high-speed rail...

In this paper a labor supply model with demand side rationing is estimated to analyze the economic policies that directly affect incentives to work as well as labor costs. The framework is applied to evaluate the employment effects of a federal minimum wage in Germany and the impact of employer-...

I derive the unconditional transformed likelihood function and its derivatives for a fixed-effects panel data model with time lags, spatial lags, and spatial time lags that encompasses the pure time dynamic and pure space dynamic models as special cases. In addition, the model can accommodate...

In this paper we explore the possibility of the application of GAMLSS regression techniques for the analysis of income distributions in Germany following the reunification. We find that conditional income distributions can generally be modelled using the three parameter Dagum distribution and...

This paper investigates the behaviour of employers' monopsony power and workers' wages over the business cycle. Using German administrative linked employer--employee data for the years 1985--2010 and an estimation framework based on duration models, we construct a time series of the firm-level...

After the fall of the Berlin wall, the total fertility rate in East Germany tumbled from 1.7 (1989) to a stunning 0.7 children per woman (1994). While this fact is well-documented, little is still known about the crisis underlying causes. We propose a new explanation: permanent shifts in the...

Governments are often willing to subsidize firms on the verge of bankruptcy. The main economic rationale behind these interventions is that a plant closure would not only harm the workers employed in that plant, but create a domino effect on the regional economy as a whole. Yet, little is still...

Job polarization the rise in employment shares of high and low skill jobs at the expense of middle skill jobs occurred in the US not just recently, but also in the late nineteenth and early twentieth centuries. We argue that in each case polarization resulted from increased automation, and...

In this paper, we study how wage mobility in the low-wage sector has changed in Western Germany between 1984 and 2004. Using German individual register data, we document a clear upward trend in the persistence of low-wage employment for both men and women. To explore whether the observed rise in...