Peer-reviewed Publications:
Dealing with censored earnings in register data (with Johannes König, Isabella Retter, Christian Schluter, Carsten Schröder, and Yogam Tchokni). Accepted at Journal of Economics and Statistics.
Earnings are often top-coded (right-censored) in administrative registers. The censoring threshold in the case of Germany is the limit value for social security contributions, leading to a substantial fraction of censoring: For example, about 12% of male workers in West Germany are affected, rising to above 30% for highly educated prime-aged workers. This missing right tail of the earnings distribution constitutes a major problem for researchers studying earnings inequality and top incomes. We overcome this challenge by taking a distributional approach and semi-parametrically modelling the right tail as being Pareto-like. Non-censored earnings survey data matched to administrative records, derived from the SOEP-RV project, let us operate in a laboratory-like setting in which the targets are known. Our approach outperforms alternative imputation methods based on Tobit regressions.
The beyondpareto command for optimal extreme-value index estimation (with Johannes König, Isabella Retter, Christian Schluter, and Carsten Schröder). The Stata Journal, 25(1), 169-188.
This paper introduces the command beyondpareto which estimates the extreme value index for distributions that are Pareto-like, i.e. whose upper tails are regularly varying and eventually become Pareto. The estimation is based on rank-size regressions, and the threshold value for the upper order statistics included in the final regression is determined optimally by minimizing the asymptotic mean-squared error (AMSE). An essential diagnostic tool for evaluating the fit of the estimated extreme value index is a Pareto quantile-quantile (QQ) plot, provided in the accompanying command pqqplot. The usefulness of our estimation approach is illustrated in several real-world examples focusing on the upper tail of the German wealth and city size distribution.
Is there a desired added worker effect? Evidence from involuntary job losses (with Rick Glaubitz). Review of Economics of the Household (2024).
While the existing evidence on added worker effects is mixed, most studies find no or only small effects. However, studies to date have mostly analyzed individuals' actual labor supply responses to their partners' job loss, neglecting to consider a potential mismatch between desired and actual labor supply adjustments. Using data from the German Socio-Economic Panel (SOEP), we study individuals' changes in actual and desired working hours after their partners' involuntary job loss in an event study design. Our results show that actual and desired working hours only increase marginally and that these increases are of similar magnitude. Thus, we provide first evidence that the absence of more substantial added worker effects is in line with individuals' stated labor supply preferences and is not the result of an inability to realize desired working hours.
Earnings Inequality and Working Hours Mismatch (with Carsten Schröder). Labour Economics 76 (2022): 102184
Based on data from the German Socio-Economic Panel, we document a significant rise in monthly earnings inequality between 1993 and 2018. The main contributors are inter-temporal increases in working hours inequality and increases in the covariance between working hours and hourly wages, while changes in the distribution of hourly wages play a minor role. Applying a novel double decomposition technique reveals that these results are particularly pronounced in the growing groups of female employees and service sector employees. If employees had been able to realize their desired optimal working hours, the increase in inequality would have been more moderate. This is mainly due to the fact that employees with low hourly wages work less than desired, a finding that is reinforced over time—even after controlling for various covariates.
Inspections and Compliance: Enforcement of the Minimum-Wage Law (with Alexandra Fedorets). FinanzArchiv: Public Finance Analysis 77.1 (2021): 1-58
This paper is the first to empirically study the relationship between spatial distributions of labor market inspections and noncompliance with Germany's minimum-wage law. Combining novel administrative data with large-scale longitudinal survey data, we document that the inspection probability is higher in regions with higher noncompliance. This implies risk-based allocation of the inspection efforts and, hence, its endogeneity. Using fixed effects and an instrumental-variable approach, we show that higher inspection efforts have a limited effect on compliance. Based on a theoretical framework and international evidence, we discuss challenges for law enforcement, the political importance of compliance, and possible improvement measures.
Recent Working Papers
Out For Good: Transitory and Persistent Labor Market Effects of Heterogeneous Health Shocks (with Johannes König). R&R at Labour Economics.
Health shocks limit individuals’ participation in the labor market and pose a major risk to household welfare. In this paper, we derive two novel health shock indicators using machine learning based on sick days and hospitalizations: one for transitory and one for persistent shocks. In an event study framework, we show their respective effects on employment, yearly working hours, and labor earnings, but also partner earnings and household net income. Persistent shocks induce large negative employment effects that end up impacting household net incomes. In contrast, transitory shocks induce only minor employment effects that leave household net incomes unaffected.
Further Work in Progress
Levels and Drivers of Lifetime Earnings (with Carsten Schröder and Yogam Tchokni)
We use administrative earnings records linked with rich panel survey data to provide empirical facts about the levels and drivers of lifetime earnings in Germany. Our novel data base allows us to provide a much more comprehensive picture than previous studies, as it also covers self-employed, civil servants and individuals with low labor market attachment. We complement the earnings information in the administrative records with rich background information from the survey, so that we can evaluate drivers of lifetime earnings. We show that exogenous determinants like sex or parental background as well as educational or occupational choices and household formation are important drivers of lifetime earnings. Labor market participation operates as a mediator that explains some but not all of the associations between lifetime earnings and its drivers.
Job Tasks and Workers' Health
Technological progress and automation are rapidly changing the task composition of jobs. In this paper, I analyze the impact of occupational routine task intensity on workers' mental and physical health. By combining individual-level health information of German workers with data on occupational task profiles and applying an instrumental variable strategy, I find that male and female workers are oppositely affected by occupational routine task intensity. For women routine tasks are more likely cognitive routine tasks that negatively affect mental health. For men, routine tasks are more likely manual routine tasks, that negatively affect physical health but have a positive effect on mental health. When considering the overall workforce, the effects on mental health balance out, but a significant negative effect of routine task intensity on physical health remains.