Workers in less secure jobs are often paid less than identical-looking workers in more secure jobs. We show that this lack of compensating differentials for unemployment risk can arise in equilibrium when all workers are identical and firms differ only in job security (i.e. the probability that...

The paper develops an equilibrium search and matching model where two-person families as well as singles participate in the labor market. We show that equilibrium entails wage dispersion among equally productive risk-averse workers. Marital status as well as spousal labor market status matter...

Policy debates about the balance of vocational and general education programs focus on the school-to-work transition. But with rapid technological change, gains in youth employment from vocational education may be offset by less adaptability and thus diminished employment later in life. To test...

It has been argued that monetary incentives restrain individual creativity and hamper performance in jobs requiring out of the box thinking. This paper reports from an experiment designed to test if the negative incentive effect is present also when individuals work together to solve such...

Many countries use centralized exit exams as a governance devise of the school system. While abundant evidence suggests positive effects of central exams on achievement tests, previous research on university-bound students shows no effects on subsequent earnings. We suggest that labor-market...

Immigrants in many countries have lower employment rates and lower earnings than natives. We study whether a more liberal access to citizenship improves the economic integration of immigrants. Our analysis relies on two major immigration reforms in Germany, a country with a weak record of...

This study investigates how the first childbirth affects the wage processes of highly attached women. We estimate a flexible fixed effects wage regression model extended with post-birth fixed effects by the control function approach. Register data on West Germany are used and we exploit the...

Existing evidence on peer effects in a work environment stems from either laboratory experiments or from real-word studies referring to a specific firm or specific occupation. Yet, it is unclear to what extent these findings apply to the labor market in general. In this paper, therefore, we...

This paper sheds light on how changes in the organization of work can help to understand increasing wage inequality. We present a theoretical model in which workers with a wider span of competence (higher level of multitasking) earn a wage premium. Since abilities and opportunities to expand the...

While uncertainty abounds in almost any decision on investment in schooling, it is mostly ignored in research and virtually absent in labour economics text books. This paper documents the scope for risk, discusses the tough disentanglement of heterogeneity and risk, surveys the analytical...