Economic conditions at the time of labour market entry can induce wage differentials between workers entering the labour market at different points in time. While the existence and persistence of these entry wage differentials are well documented, little is known about their interaction with...

This paper presents a model in which mismatch employment arises in a constrained efficient equilibrium. In the decentralized economy, however, mismatch gives rise to a congestion externality whereby heterogeneous job seekers fail to internalize how their individual actions affect the labor...

Although the cyclical aspects of worker reallocation are investigated in numerous studies, only scarce empirical evidence exists for Germany. Kluve, Schaffner, and Schmidt (2009) emphasize the heterogeneity of cyclical influences for different subgroups of workers, defined by age, gender and...

We examine racial disparities in key labor market outcomes for men and women over the past four decades, with a special emphasis on their evolution over the business cycle. Blacks have substantially higher and more cyclical unemployment rates than whites, and observable characteristics can...

The aggregate average unemployment rate in a given country is essentially the result of individual workers' transitions between the three core labor force states, employment, unemployment, and inactivity. The dynamics of these transitions depend both, on individual duration in a particular state...

Since ethnic clustering is common in Germany, a better understanding of its effects on the integration of immigrants could be important for integration policies, especially in the light of rising immigration and a skilled worker shortage. Yet, both economic theory and empirical research for...

The standard model of optimal minimum wage policy in a perfectly competitive labor market suggests that a positive tax rate on minimum wage income is Pareto inefficient. However, most countries with minimum wage legislation exhibit a positive tax rate on minimum wage income. We solve this...

I construct an index of sectoral dynamics to characterize changes in the sectoral composition of economic activity. There is evidence of asymmetry in different phases of business cycles with recessions being associated with larger changes in sectoral composition than expansions. I find that the...

The persistently low and (partly) negative output growth in Germany in 2019 evoked memories of the recent global economic crisis and, by this, sparked debates about measures to counter the growing number of unemployed, for example changing the generosity of unemployment benefits (UB) and...

This paper analyses the impact of the business cycle on labour market dynamics in EU member states and the US during the first decade of the 21st century. Using unique measures of labour market flows constructed from worker-level micro data, we examine to what extent macro shocks were...