Worker participation in decision-making is often associated with high-wage and high-productivity firm strategies. Using linked employer–employee data for Germany and worker fixed effects from a two-way fixed-effects model of wages capturing observed and unobserved worker quality, we find that plants with formal worker participation via works councils indeed employ higher quality workers. We show that worker quality is already higher in plants before council introduction and further increases after the introduction. Importantly, we corroborate previous studies by showing positive productivity and profitability effects even after taking into account worker sorting.

This paper investigates whether wage losses after job displacement are driven by lost firm wage premiums or worker productivity depreciations. We estimate losses in wages and firm wage premiums, the latter being measured as firm effects from a two-way fixed-effects wage decomposition. Using new German administrative data on displacements from small and large employers, we find that wage losses are to a large extent explained by losses in firm wage premiums and that premium losses are largely permanent. We show that losses strongly increase with pre-displacement employer size. This provides an explanation for large and persistent wage losses reported in previous displacement studies typically focusing on large employers, only.

How important is mastering information and communication technology (ICT) on modern labor markets? We answer this question with unique data on ICT skills tested in 19 countries. Our two instrumental-variable models exploit technologically induced variation in broadband Internet availability that gives rise to variation in ICT skills across countries and German municipalities. We find statistically and economically significant returns to ICT skills. For instance, an increase in ICT skills similar to the gap between an average-performing and a top-performing country raises earnings by about 8 percent. One mechanism driving positive returns is selection into occupations with high abstract task content.

We present the first evidence on the role of occupational choices and acquired skills for migrant selection. Combining novel data from a representative Mexican task survey with rich individual-level worker data, we find that Mexican migrants to the United States have higher manual skills and lower cognitive skills than nonmigrants. Results hold within narrowly defined region–industry–occupation cells and for all education levels. Consistent with a Roy/Borjas-type selection model, differential returns to occupational skills between the United States and Mexico explain the selection pattern. Occupational skills are more important to capture the economic motives for migration than previously used worker characteristics.

This paper studies effects of the introduction of a new digital mass medium on reemployment of unemployed job seekers. We combine data on broadband internet availability at the local level with German individual register data. We address endogeneity by exploiting technological peculiarities that affected the roll-out of broadband internet. Results show that broadband internet improves reemployment rates after the first months in unemployment for males. Complementary analyses with survey data suggest that internet access mainly changes male job seekers’ search behavior by increasing online search and the number of job applications.

It is well established that female students perform better when taught by female professors. However, little is known about the mechanisms explaining these gender match effects. Using administrative records from a German public university, which cover all programs and courses between 2006 and 2018, we show that gender match effects are sizable in smaller classes, but are absent in larger classes. These results suggest that direct and frequent interactions between students and professors are crucial for gender match effects to emerge. In contrast, the mere fact that one’s professor is female is not sufficient to increase performance of female students.

The standard economic model of occupational choice following a basic Roy model emphasizes individual selection and comparative advantage, but the sources of comparative advantage are not well understood. We employ a unique combination of Dutch survey and registry data that links math and language skills across generations and permits analysis of the intergenerational transmission of comparative skill advantages. Exploiting within-family between-subject variation in skills, we show that comparative advantages in math of parents are significantly linked to those of their children. A causal interpretation follows from a novel IV estimation that isolates variation in parent skill advantages due to their teacher and classroom peer quality. Finally, we show the strong influence of family skill transmission on children’s choices of STEM fields.

We provide the first causal evidence of discrimination against migrants seeking child care. We send emails from fictitious parents to > 18,000 early child care centers across Germany, asking if there is a slot available and how to apply. Randomly varying names to signal migration background, we find that migrants receive 4.4 percentage points fewer responses. Responses to migrants also contain substantially fewer slot offers, are shorter, and less encouraging. Exploring channels, discrimination against migrants does not differ by the perceived educational background of the email sender. However, it does differ by regional characteristics, being stronger in areas with lower shares of migrants in child care, higher right-wing vote shares, and lower financial resources. Discrimination on the child care market likely perpetuates existing inequalities of opportunities for disadvantaged children.

When workers are displaced from their jobs in mass layoffs or firm closures, they experience lasting adverse labor market consequences. We study how these consequences vary with the amount of skill mismatch that workers experience when returning to the labor market. Using novel measures of skill redundancy and skill shortage, we analyze individuals‘ work histories in Germany between 1975 and 2010. We estimate difference-in-differences models, using a sample in which we match displaced workers to statistically similar non-displaced workers. We find that displacements increase the probability of occupational change eleven fold, and that the type of skill mismatch after displacement is strongly associated with the magnitude of post-displacement earnings losses. Whereas skill shortages are associated with relatively quick returns to the counterfactual earnings trajectories that displaced workers would have experienced absent displacement, skill redundancy sets displaced workers on paths with permanently lower earnings.

We provide the first causal evidence of discrimination against migrants seeking child care. We send emails from fictitious parents to > 18, 000 early child care centers across Germany, asking if there is a slot available and how to apply. Randomly varying names to signal migration background, we find that migrants receive 4.4 percentage points fewer responses. Responses to migrants also contain substantially fewer slot offers, are shorter, and less encouraging. Exploring channels, discrimination against migrants does not differ by the perceived educational background of the email sender. However, it does differ by regional characteristics, being stronger in areas with lower shares of migrants in child care, higher right-wing vote shares, and lower financial resources. Discrimination on the child care market likely perpetuates existing inequalities of opportunities for disadvantaged children.