In part A, my co-authors and I have focused on the role of skill-biased technological change in accounting for the rise in wage inequality observed in many developed countries. We argue that skill-biased technological change not only affects wage gaps between skill groups, but also increases wage inequality within skill groups, across workers in different firms. We show that an industry-wide skill-biased technological change shock will increase between-firm wage inequality within the industry through three main channels: increased employment concentration in more productive firms, increased wage dispersion between firms for workers of the same skill type, and increased segregation and sorting of skilled workers in more productive firms. Using rich administrative matched employer-employee data from Germany, we provide empirical evidence of establishment-level patterns that are in line with the predictions of the model. We further document that industries with more technological adoption exhibit particularly pronounced patterns along the dimensions highlighted by the model.
In other work, my co-authors and I focus on more recent trends in wage inequality in Germany, in the aftermath of the Great Recession. We show that from 2010 onwards, wage inequality at the bottom of the wage distribution has declined in Germany. We partially attribute this trend to an exceptionally tight labor market which fostered job-to-job mobility from lower-paying to higher-paying firms, and reduced firm's monopsony power in the labor market.
In part B, my co-authors and I have focused on the effects of the introduction of the minimum wage in Germany in 2015 on the labor market. We find that the minimum wage raised wages at the bottom of the wage distribution without lowering employment. The minimum wage also drove small businesses out of the market and re-allocated low-wage workers from smaller, lower paying to larger, higher paying establishments. As such, the minimum wage helped to reduce wage inequality not only within but also between firms.
In other work, my co-authors and I have investigated the effects of increases in business tax rates (i.e. taxes levied on firms’ profits) on firms, workers and the wider economy. Leveraging more than 4,800 persistent changes in local business tax rates levied on firms’ profits, we find that an increase in the tax rate by one percentage point reduces a municipality’s employment by 1.17 percent, the capital stock by 4 percent, wages by 0.52 percent, and the number of establishments by 0.6 percent. Workers' wages in the local labor markets decline for two reasons: directly through wage declines within affected establishments and indirectly through a decline in upward job-to-job mobility induced by a sharp reduction in hiring of larger and higher-paying establishments.
In Part C, my co-authors have focused on the role of co-workers in fostering mothers’ labour market careers post-birth. We find that colleagues who grew up in the more gender-egalitarian East-German environment induce West German women from more traditional backgrounds to return to work faster and work longer hours after childbirth.
In other work, my co-authors and I have investigated which firms provide childcare to their workers, and their motives behind doing so.
