Using administrative data for West Germany, we investigate whether part of the urban wage premium stems from fierce competition in thick labour markets. We first document fewer search frictions in denser labour markets. We further show that controlling for search frictions lowers the wage...

This paper employs a wage-setting approach to analyze the labor market effects of immigration into Germany. The wage-setting framework relies on the assumption that wages tend to decline with rising unemployment, albeit imperfectly. This enables us to consider labor market rigidities, which are...

Economic research suggests that the amount and duration of unemployment benefits can increase equilibrium rate of unemployment, but the literature has overlooked the effects of other restrictions on benefits, namely the length of the qualifying period and the base period. We develop a...

This paper comprehensively analyzes the stepping-stone effect of temporary agency employment. Using the timing-of-events approach, we not only investigate whether temporary agency employment is a bridge into regular employment but also at the individual's post-unemployment wages and...