Essays in Applied Labor Economics

Abstract

"This dissertation consists of four self-contained empirical studies in applied labor economics. The topics studied are minimum wages, gender inequality in the labor market and the effects of a large parental leave policy reform, and long-term unemployment. The variety of topics covered in this dissertation shows the great opportunities that rich, detailed, and reliable administrative data offer for empirical research in economics and therefore this dissertation contributes new insights into important issues in labor economics. The first paper studies the causal effects of the introduction of a high-impact minimum wage in the German hairdressing sector – a sector that resembles the archetypical perfectly competitive labor market quite closely. Based on the full population of employees in the sector – derived from German administrative labor market data – and a difference-in-differences design, the main findings in this paper are that high minimum wages do not necessarily cause negative effects on employment, even in a labor market that closely resembles a perfectly competitive labor market. Instead, increases in consumer prices can be a major mitigating channel if consumers are willing to pay the increased wage costs caused by the minimum wage in the form of higher prices. The second paper studies the causal effects of the federal minimum wage introduction in Germany in 2015 on educational plans of teenagers. This paper combines survey data with a special focus on education with administrative labor market data. Based on a difference-indifferences design, the results show that the reform increased teenagers’ willingness to invest in additional schooling. Moreover, based on a triple difference-in-differences approach, the results show that low-skilled teenagers drive this positive effect. These findings suggest that low-skilled teenagers are forward-looking and account for changes in wages and in employment probabilities when deciding on human capital investments. The third paper explores the effects of childbirth on gender inequality in different cultural contexts within a common institutional setting – West and East Germany – and studies the causal effects of a major parental leave benefit reform on parents’ labor markets outcomes. The study is based on a data set constructed by combining novel approaches to enrich administrative social security data. Based on an event study approach, the main findings are that children still impact the careers of women quite differently in both parts of the country, while the labor market outcomes of men are affected similarly by the arrival of their first child in West and East Germany. Regarding the parental leave benefit reform, the study shows that the reform increased the take-up of paternity leave among fathers. Results based on a novel empirical approach that combines event studies with a difference-in-differences design show that the X reform reduced women´s and men´s labor supply during the first year after childbirth, and that the reform had no meaningful effects on parents’ employment beyond this period. Finally, the results show that fathers’ parental leave-taking does not have any effects on both parents’ employment probabilities. The fourth paper compares the ability of different statistical learning models to predict whether individuals will become long-term unemployed. Comparing the performance of classifiers based on logistic regressions and based on random forests, the study shows that, depending on the objective function and budget constraints of an employment agency, one or the other classifier is preferable. Classifiers based on logistic regressions identify a larger share of high-risk individuals, while random forest classifiers mis-classify less low-risk individuals as high-risk. The study also shows how employment services can influence potential statistical discrimination and discusses practical issues in implementing statistical learning techniques in public employment services. This dissertation contributes to the field of applied labor economics by using extensive, high-quality administrative data and a broad variety of empirical methods to extend the knowledge of key issues in the field. The first three studies focus on the identification of causal effects of large labor market reforms, while the fourth study is centered on the practical implications of implementing statistical learning techniques in public employment services." (Author's abstract, IAB-Doku) ((en))

Cite article

Kunaschk, M. (2021): Essays in Applied Labor Economics. Erlangen, 175 p.