Empirical studies find that the age-variance profile of wages is U-shaped. The objective of this paper is to explore the driving forces of the U-shape in a model with search frictions. I introduce endogenous search effort and a fixed retirement age into Cahuc, Postel-Vinay, and Robin s (2006)...

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...

We study the relationship between cyclical job and worker flows at the plant level using a new data set spanning from 1976-2006. We find that procyclical labor demand explains relatively little of procyclical worker flows. Instead, all plants in the employment growth distribution increase their...

Dismissal protection has experienced many statutory changes in Germany in the past decades. This paper estimates the effects of dismissal protection on the hazard of leaving the establishment using as identification that workers employed before the legal amendment maintained their previous...

When a key responsibility of a manager is to allocate more or less attractive tasks to subordinates, these subordinates have an incentive to work hard and demonstrate their talents. As a new manager is less well acquainted with these talents this incentive mechanism is reinvigorated after a...

Economic debate about the consequences of immigration in Germany has largely focused on the wage effects for natives at an aggregate level. Especially the role of imperfect substitutability of migrants and natives gained importance. A new micro oriented approach is to focus on the firm level by...

We analyze whether a principal s decision to layoff an agent affects the performance of the surviving agents. To study the impact of the decision in isolation, we conducted an experimental principal-agent game. We find that agents reduce their performance by 37% as a response to the decision....

Skill-Biased Technical Change is one of the most prominent explanations for the rise in wage inequality in the United States over the last decades. However, the explanation is challenged for several reasons. In this paper, I propose an alternative type of technical change, where new technologies...

This paper studies the conditional patterns of unemployment dynamics in Germany. We employ a structural VAR model and identify a technology shock and two policy shocks by using standard restrictions. Interestingly, the worker reallocation process varies substantially with the identified shocks....

Using a representative establishment dataset, this paper analyzes the incidence of wage posting and wage bargaining in the matching process. We show that both modes of wage determination coexist in the German labor market, with about two-thirds of hirings being characterized by wage posting....