This paper studies the effect of labor market reform on the welfare cost of business cycles. Motivated by the German labor market reforms of 2003-2005, the so-called Hartz reforms, the paper focuses on two labor market institutions: the unemployment insurance system determining search incentives...

Trust in the citizens of a potential partner country may affect the decision to trade with or to migrate to a foreign country. This paper employs panel data to examine the causal impact of such bilateral trust on international trade and migration patterns. We apply instrumental variables (IV)...

We derive a simple equation for the welfare gains from trade when tariffs are liberalized or iceberg trade costs fall. Covering various one-sector trade models that may or may not feature extensive margins and imperfect competition, we generalize the analysis of Arkolakis, Costinot and...

This paper examines recent trends in employment patterns on the labor market for youth and changing returns to early employment stability over the past four decades. True state dependence is identified by exploiting exogenous variation in aggregate labor market conditions induced by differences...

We estimate the causal effect of immigration on unemployment, employment and wages of resident employees in Switzerland, whose foreign labor force has increased by 32.8% in the last ten years. To address endogeneity of immigration into different labor market cells, we develop new variants of the...

Quantifying the welfare effects of trade liberalization is a core issue in international trade. Existing frameworks assume perfect labor markets and therefore ignore the effects of aggregate employment changes for welfare. We develop a quantitative trade framework which explicitly models labor...

This paper examines the effects of a major change in German parental transfer system on fertility. I use the largely unanticipated reform of 2007 as a natural experiment to assess how an earnings-dependent parental leave benefit effects higher-order fertility. Given the recent introduction, this...

The Spanish economy is currently plagued by a deep recession with very high unemployment. We ask how much of the unemployment increase in Spain can be traced back to the debt deleveraging needs of Spanish households. We use provincial household debt and sectoral unemployment data and follow Mian...