Using a matched firm-worker dataset, we show both theoretically and empirically that positive assortative matching between firms and workers leads to an underestimation of the absolute value of wage elasticity of labor demand.

While there is consensus on the need to raise the time spent in the market by European women, it is not clear how these goals should be achieved. Tax wedges, assistance in the job search process, and part-time jobs are policy instruments that are widely debated in policy circles. The paper...

Marginal employment', i.e. employment at low working hours and earnings not covered by social security, has been gaining importance in the German economy over the past decade. Using a large newly available panel data set and statistical matching techniques, we analyse the effects of marginal...

This paper investigates the macroeconomic effects of job creation schemes and vocational training on the matching processes in West Germany. The empirical analysis is based on regional data for local employment office districts for the period from 1999 to 2003. The empirical model relies on a...

Labor market institutions, via their effect on the wage structure, affect the investment decisions of firms in labor markets with frictions. This observation helps explain rising wage inequality in the US, but a relatively stable wage structure in Europe in the 1980s. These different trends are...

This study surveys the development of the East German labor market after the unification of Germany. We explain that in the last decade, East Germans were faced with very high levels of joblessness that considering labor market exits and active labor market policy, are only partly reported as...

We consider a continuum of workers ranked according to their abilities to acquire education and two firms with different technologies that imperfectly compete in wages to attract these workers. Once employed, each worker bears an education cost proportional to his/her initial ability, this cost...

The paper explores the consequences of macroeconomic policy for labor market outcomes in the presence of frictions. It shows how policy may be useful in overriding frictions, as well as how it might generate adverse outcomes. The analysis looks at the main tools of macroeconomic policy and...

Having faced high unemployment rates for more than a decade, the German government implemented a comprehensive set of labour market reforms during the period 2003-2005. This paper describes the economic and institutional context of the German labour market before and after these so-called Hartz...

This paper uses a social experiment in labour market policy - providing early and intensive monitoring and programme participation in unemployment spells - to assess the nature of labour market policy effectiveness. The experiment was conducted in two counties in Denmark during the winter of...