IAB-Colloquium (en) Archive - IAB - Institut für Arbeitsmarkt- und Berufsforschung

Breaking Barriers or Reinforcing Inequalities? The Impact of Affordable Childcare on Entrepreneurship

This study exploits exogenous variation in the pricing of childcare caused by a nationwide reform.

We exploit exogenous variation in the pricing of childcare caused by a nationwide reform to estimate the impact of lower childcare costs and the propensity of individuals to start a firm. The reform capped the childcare prices, whereas the exogenous variation in the reduction of childcare prices comes from the pre-reform prices, which depended on the place of residence and family type. Decreasing the cost of childcare lowers both the capital and time constraint, which can lead to individuals becoming entrepreneurs.

We evaluate such potential mechanisms both for males and females separately in a difference-in-difference setting up to 5 years post reform. We find that reducing childcare costs increases entrepreneurial activity for both mothers and fathers.

Trade Integration, Import Competition, and Optimal Unemployment Insurance

This paper investigates the optimal design and implementation of labor market institutions within an open economy framework.

This paper investigates the optimal design and implementation of labor market institutions within an open economy framework. We develop a Heterogeneous Agent New Keynesian (HANK) DSGE model featuring search and matching frictions to analyze the interaction between labor market flexibility and international trade, with a specific focus on the German experience. Our findings suggest that labor market institutions, when analyzed in isolation, have a marginal impact on aggregate unemployment and welfare. However, their efficacy is significantly amplified when an economy is exposed to international trade.

We show that while import competition exerts upward pressure on unemployment in the short run, more flexible labor market institutions are essential for maximizing welfare in the long run. Crucially, we study the optimal policy sequence and find that a stepwise, sequential implementation of reforms is superior to a "big bang" approach. Such a trajectory maximizes aggregate welfare over a longer time horizon by effectively shielding heterogeneous agents from the regressive distributive effects of globalization shocks during the transition phase. Our results provide a normative rationale for gradualism in structural reform agendas within integrated economies.

Koautoren sind Andreas Hauptmann (IAB) und Benjamin Schwanebeck (FernUniversität in Hagen).

Spatial income inequality in Germany, 1957-2021

This study is about income inequality between and within German regions from 1957 to 2021 using a newly collected panel.

We analyze income inequality between and within German regions from 1957 to 2021 using a newly collected panel. We confirm previous evidence on convergence between regions during the decades after World War II, but do not find pronounced regional divergence since the 1990s - in contrast to some earlier studies.

Instead, the national income inequality rise since the 1980s is closely tracked by the near-unanimous rise in income concentration within regions, driven by overproportional labor income growth of the top income decile. Regression analysis suggests that regional growth switched from equality-enhancing to inequality-increasing in the 1990s.

Valuing Non-Wage Amenities: Survey and Experimental Evidence from Army Enlistments

In this paper, we estimate willingness to pay (WTP) across two key amenities in the U.S. Army.

Survey-based discrete choice experiments are widely used to estimate willingness to pay (WTP) for non-wage amenities. Recent innovations in elicitation methods, such as Bayesian Adaptive Choice Experiments (BACE), can generate precise, individualized WTP estimates, making possible a more stringent field test of survey-based discrete choice methods against person-level realized choices.

In this paper, we estimate WTP across two key amenities in the U.S. Army: (i) the compensation recruits require to accept longer initial service obligations, and (ii) recruits’ willingness to pay for a first duty station of their choosing. We implement two complementary approaches. First, we conduct a randomized controlled trial (RCT) that randomizes enlistment bonuses across these amenities, allowing us to estimate WTP for station of choice and for extending recruits’ contractually obligated service from 3 years to 4, 5, and 6 years. Second, we administer a BACE survey to a sample of potential recruits—nearly half of whom subsequently enlist—to estimate the same parameters. We compare estimates across the RCT and survey-based approaches, examining both internal consistency within the survey and external consistency with real-world enlistment choices.

Together, these analyses provide a field test of survey-based valuation methods and suggest that targeted changes to Army enlistment incentive structures could yield substantial cost savings.

Joint: Michael T. Baker, Kyle Greenberg, and Linh Tô

The Effect of Worker Health Shocks on Coworkers’ Employment and Health Behavior

This study analyzes how a worker’s severe health shock affects older coworkers.

We analyze how a worker’s severe health shock affects the employment and health behavior of their older coworkers. We link comprehensive administrative data on labor market histories and health records from Austria to identify coworker networks and severe health shocks in small firms, which cause substantial increases in healthcare expenditures, absenteeism, and mortality, as well as persistent reductions in the labor supply of affected workers. Combining a matching approach with a difference-in-difference framework, we find a significant impact of a health shock on the labor market outcomes and health behavior of older coworkers.

Affected coworkers are about 2.3 percentage points more likely to be employed in the shock firm and tend to delay retirement. Although there is no change in daily earnings and earnings growth, coworkers are more likely to receive special bonus payments after leaving the firm. The employment effects are larger when the health shock affects a high-skilled worker and when the shocked worker leaves the firm after the health shock.

Finally, we find that female coworkers in the treatment group are more likely to have a mammography, especially in response to health shocks due to cancer. We find no statistically significant effects on participation in general health check-ups and PSA tests, or on coworker absenteeism.

Technological Rivalry and the Allocation of Talent: Evidence from China’s College Admission

This paper studies how the U.S-China technology rivalry reshapes college admissions using data from China.

This paper studies how the U.S-China technology rivalry reshapes college admissions across fields of study using novel college admissions data from China.

Exploiting differential exposure to tariff escalation and export restrictions across major-region pairs over time, we find that more exposed pairs experience larger increases in admissions selectivity and enrollment, particularly for STEM majors and elite universities.

A one percentage point increase in the tariff exposure raises admission cutoff scores by 2-3 percent. Labor market returns shift in the same direction, with rising wage premia for STEM-related and R&D-intensive positions, consistent with a defensive-innovation channel in which rivalry pressure spurs self-reliance and innovation effort in China, increasing demand for science and high-end engineering skills.

The OECD Economic Survey of Germany 2025

After a decade of strong export-led growth COVID-19, war in Ukraine and rising trade tensions have hit the German economy and emphasised the need to accelerate structural reforms.

After a decade of strong export-led growth, the COVID-19 pandemic, Russia’s war of aggression against Ukraine and rising trade tensions have hit the German economy and emphasised the need to accelerate structural reforms. The recent reform of fiscal rules will allow to raise spending to improve defence capacity and address a large infrastructure backlog.

To ensure medium-term fiscal sustainability, this should be combined with raising spending efficiency, reallocating spending and broadening the tax base. Addressing rising spending pressures due to population ageing will require reforming the pension, health and long-term care systems. Simplifying and harmonising public procurement and infrastructure planning and approval procedures should be complemented with improving the capacity of the public administration to ensure a timely and efficient implementation of public investment projects.

To ensure that increasing domestic demand is matched by supply, it is key to address skilled labour shortages and reduce high administrative burdens and regulatory barriers to competition, which have weighed on business dynamism, innovation and productivity growth. Fostering regional development requires better coordination of placed-based with industrial, infrastructure and innovation policies as well as improving the financial and administrative capacity of municipalities.

Beyond the Chores: Mental Load, Gender, and Careers

This study investigates the often-overlooked "mental load" of domestic labor and its implications for gender equality and careers.

This study investigates the often-overlooked “mental load” of domestic labor-the invisible planning, organizing, and anticipating required for household functioning- and its implications for gender equality and careers.

Drawing on a survey experiment with 2,104 white-collar professionals across 11 provinces in Turkey, I test whether information interventions can shift awareness and attitudes toward the unequal distribution of domestic and cognitive labor. Participants in the treatment group viewed two short videos explaining the concept of mental load, its gendered burden, and possible tools for more equitable task-sharing, while the control group received only a brief statistic on cooking responsibilities.

Findings show that the intervention significantly increased participants’ willingness to request support in household tasks, especially among women, and heightened recognition of under-appreciation, conflict, and time poverty linked to domestic work. While implicit gender biases remained unchanged, men in the treatment group reported greater awareness of unfair household labor allocation. These results provide early causal evidence on how simple information treatments can raise recognition of invisible labor and highlight their potential for workplace and policy interventions targeting gender equity.

Working Hours, Workplace Hazards, and Health: The Long-Term Impact of the Eight-Hour Day

This study is about a nationwide policy trial from Sweden in 1920 that reduced the standard workweek from 55 to 48 hours.

Despite the well-known negative correlation between long working hours and workers’ health, credible causal evidence for the short- and particularly long-run is scarce.

We study a nationwide policy trial from Sweden in 1920 that reduced the standard workweek from 55 to 48 hours--but only for selected occupations--while keeping earnings constant. Using full population data and difference-in-differences designs, we demonstrate that reduced working hours led to a 15% decline in annual mortality rates over the first six years, driven by fewer workplace accidents, serious injury at work, and deaths from heart disease. Causal forest estimators indicate particularly strong effects for older workers. Long-run effects were substantial: affected workers lived up to one year longer over the next 50 years.

Our results suggest that reducing working hours, particularly in labour-intensive occupations, could yield large and lasting health benefits globally.

Vocational Education and Earnings Growth: Human Capital vs. Firm Sorting

This paper examines how post-16 educational tracking into academic and vocational pathways shapes early-career earnings trajectories.

This paper examines how post-16 educational tracking into academic and vocational pathways shapes early-career earnings trajectories, and through which mechanisms these differences arise.

Using population-wide linked education and tax records from England, we document not only differences in earnings levels, but mainly substantial divergence in earnings growth between academically and vocationally educated workers over the first twelve years of labor market experience. While the previous literature has favored skills-based explanations, we explore the role of firm sorting as a potential driver of this divergence. For this, we (statistically) decompose earnings growth into instantaneous returns to job moves, sorting into firms with different returns to tenure, and education-specific returns to experience. Between-job mobility (i.e., switching to firms with higher AKM fixed effects) plays a limited role beyond the very beginning of workers’ careers. The vast majority of the gap in earnings growth is due to differential sorting into firms with higher returns to tenure and higher returns to experience among academically educated workers across firms (each accounting for roughly 40%).

Overall, the results highlight the importance of firm heterogeneity and sorting in understanding the labor market consequences of educational tracking, complementing human-capital-based explanations.