In most of the developed countries the number of low-skilled workers decreased and the number of high-skilled workers increased. However, it is far from clear whether and how this change in the skill composition of the employees affects the evolution of regional employment disparities....

This article reconsiders the empirical evidence on regional human capital externalities using longitudal survey data from the German Socio-Economic Panel (SOEP). It complements the empirical literature on the role of human capital for explaining regional wage differences. Based on the framework...

This paper examines job polarization at the level of local labor markets in Germany over a 30-year period. The major explanation of job polarization is skill biased technological change (SBTC): new technologies are complementary to high paying jobs but substitute workers in routine manual jobs...

Governments are often willing to subsidize firms on the verge of bankruptcy. The main economic rationale behind these interventions is that a plant closure would not only harm the workers employed in that plant, but create a domino effect on the regional economy as a whole. Yet, little is still...

This paper indicates that the extent of collective bargaining coverage in an industry may depend on the differences in firms productivity levels within the industry. Less pronounced differences in productivity levels make it easier to design collective wage contracts that are accepted by a wider...

This paper investigates the effect of market size on innovation activities across different durable good industries in the Chinese manufacturing sector. We use a potential market size measure driven only by changes in the Chinese income distribution which is exogenous to changes in prices and...

Ever since Sjaastad (1962), researchers have struggled to quantify the psychic cost of migration. We monetize psychic cost as the wage premium for moving to a culturally different location. We combine administrative social security panel data with a proxy for cultural difference based on unique...

This paper is among the first to link internal migration and subjective well-being in developed countries. Economic theory predicts that individuals migrate towards urban agglomerations, if the potential gain in income is sufficient to cover costs. However, this narrow view cannot explain why...

Ethnic groups tend to agglomerate and assemble, mostly in urban areas. While ethnic clustering is critically debated in societies and the consequences for economic outcomes are under debate in research, the process is not yet well understood. A separate literature has also examined the cultural...

Even though ethnic clustering is common, both economic theory and empirical research have not been able to provide a clear-cut answer on its effects on the integration of immigrants. In this paper, we study the effect of residential clustering on the labour market outcome of immigrants in...