Trade Shocks, Labour Markets and Elections in the First Globalisation
Richard Bräuer, Wolf-Fabian Hungerland, Felix Kersting
Abstract
This paper studies the economic and political effects of a large trade shock in agriculture – the grain invasion from the Americas – in Prussia during the first globalisation (1871-1913). We show that this shock accelerated the structural change in the Prussian economy through migration of workers to booming cities. In contrast to studies using today’s data, we do not observe declining per capita income and political polarisation in counties affected by foreign competition. Our results suggest that the negative and persistent effects of trade shocks we see today are not a universal feature of globalisation, but depend on labour mobility. For our analysis, we digitise data from Prussian industrial and agricultural censuses on the county level and combine it with national trade data at the product level. We exploit the cross-regional variation in cultivated crops within Prussia and instrument with Italian trade data to isolate exogenous variation.
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Power Generation and Structural Change: Quantifying Economic Effects of the Coal Phase-out in Germany
Katja Heinisch, Oliver Holtemöller, Christoph Schult
Energy Economics,
2021
Abstract
In the fight against global warming, the reduction of greenhouse gas emissions is a major objective. In particular, a decrease in electricity generation by coal could contribute to reducing CO2 emissions. We study potential economic consequences of a coal phase-out in Germany, using a multi-region dynamic general equilibrium model. Four regional phase-out scenarios before the end of 2040 are simulated. We find that the worst case phase-out scenario would lead to an increase in the aggregate unemployment rate by about 0.13 [0.09 minimum; 0.18 maximum] percentage points from 2020 to 2040. The effect on regional unemployment rates varies between 0.18 [0.13; 0.22] and 1.07 [1.00; 1.13] percentage points in the lignite regions. A faster coal phase-out can lead to a faster recovery. The coal phase-out leads to migration from German lignite regions to German non-lignite regions and reduces the labour force in the lignite regions by 10,100 [6300; 12,300] people by 2040. A coal phase-out until 2035 is not worse in terms of welfare, consumption and employment compared to a coal-exit until 2040.
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Benchmarking New Zealand's Frontier Firms
Guanyu Zheng, Hoang Minh Duy, Gail Pacheco
IWH-CompNet Discussion Papers,
Nr. 1,
2021
Abstract
New Zealand has experienced poor productivity performance over the last two decades. Factors often cited as reasons behind this are the small size of the domestic market and distance to international partners and markets. While the distance reason is one that is fairly insurmountable, there are a number of other small advanced economies that also face similar domestic market constraints. This study compares the relative performance of New Zealand’s firms to those economies using novel cross-country microdata from CompNet. We present stylised facts for New Zealand relative to the economies of Belgium, Denmark, Finland, Netherlands and Sweden based on average productivity levels, as well as benchmarking laggard, median and frontier firms. This research also employs an analytical framework of technology diffusion to evaluate the extent of productivity convergence, and the impact of the productivity frontier on non-frontier firm performance. Additionally, both labour and capital resource allocation are compared between New Zealand and the other small advanced economies. Results show that New Zealand’s firms have comparatively low productivity levels and that its frontier firms are not benefiting from the diffusion of best technologies outside the nation. Furthermore, there is evidence of labour misallocation in New Zealand based on less labour-productive firms having disproportionally larger employment shares than their more productive counterparts. Counter-factual analysis illustrates that improving both technology diffusion from abroad toward New Zealand’s frontier firms, and labour allocation across firms within New Zealand will see sizable productivity gains in New Zealand.
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Organised Labour, Labour Market Imperfections, and Employer Wage Premia
Sabien Dobbelaer, Boris Hirsch, Steffen Müller, Georg Neuschäffer
CESifo Working Paper,
Nr. 8739,
2020
publiziert in: ILR Review
Abstract
This paper examines how collective bargaining through unions and workplace co-determination through works councils shape labour market imperfections and how labourmarket imperfections matter for employer wage premia. Based on representative Germanplant data for the years 1999{2016, we document that labour market imperfections arethe norm rather than the exception. Wage mark-downs, that is wages below the marginalrevenue product of labour rooted in employers' monopsony power, are the most prevalentoutcome. We further nd that both types of organised labour are accompanied by asmaller prevalence and intensity of wage mark-downs whereas the opposite holds for wagemark-ups, that is wages above the marginal revenue product of labour rooted in workers'monopoly power. Finally, we document a close link between our production-based labourmarket imperfection measures and employer wage premia. The prevalence and intensityof wage mark-downs are associated with a smaller level and larger dispersion of premiawhereas wage mark-ups are only accompanied by a higher premium level.
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Organised Labour, Labour Market Imperfections, and Employer Wage Premia
Sabien Dobbelaer, Boris Hirsch, Steffen Müller, Georg Neuschäffer
Tinbergen Institute Discussion Paper,
Nr. 81,
2020
publiziert in: ILR Review
Abstract
This paper examines how collective bargaining through unions and workplace co-determination through works councils shape labour market imperfections and how labourmarket imperfections matter for employer wage premia. Based on representative Germanplant data for the years 1999{2016, we document that labour market imperfections arethe norm rather than the exception. Wage mark-downs, that is wages below the marginalrevenue product of labour rooted in employers' monopsony power, are the most prevalentoutcome. We further nd that both types of organised labour are accompanied by asmaller prevalence and intensity of wage mark-downs whereas the opposite holds for wagemark-ups, that is wages above the marginal revenue product of labour rooted in workers'monopoly power. Finally, we document a close link between our production-based labourmarket imperfection measures and employer wage premia. The prevalence and intensityof wage mark-downs are associated with a smaller level and larger dispersion of premiawhereas wage mark-ups are only accompanied by a higher premium level.
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Organised Labour, Labour Market Imperfections, and Employer Wage Premia
Sabien Dobbelaer, Boris Hirsch, Steffen Müller, Georg Neuschäffer
IZA Discussion Paper,
Nr. 13909,
2020
publiziert in: ILR Review
Abstract
This paper examines how collective bargaining through unions and workplace co-determination through works councils shape labour market imperfections and how labourmarket imperfections matter for employer wage premia. Based on representative Germanplant data for the years 1999{2016, we document that labour market imperfections arethe norm rather than the exception. Wage mark-downs, that is wages below the marginalrevenue product of labour rooted in employers' monopsony power, are the most prevalentoutcome. We further nd that both types of organised labour are accompanied by asmaller prevalence and intensity of wage mark-downs whereas the opposite holds for wagemark-ups, that is wages above the marginal revenue product of labour rooted in workers'monopoly power. Finally, we document a close link between our production-based labourmarket imperfection measures and employer wage premia. The prevalence and intensityof wage mark-downs are associated with a smaller level and larger dispersion of premiawhereas wage mark-ups are only accompanied by a higher premium level.
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Competition, Cost Structure, and Labour Leverage: Evidence from the U.S. Airline Industry
Konstantin Wagner
IWH Discussion Papers,
Nr. 21,
2020
Abstract
I study the effect of increasing competition on financial performance through labour leverage. To capture competition, I exploit variation in product market contestability in the U.S. airline industry. First, I find that increasing competitive pressure leads to increasing labour leverage, proxied by labour share. This explains the decrease in operating profitability through labour rigidities. Second, by exploiting variation in human capital specificity, I show that contestability of product markets induces labour market contestability. Whereas affected firms might experience more stress through higher wages or loss of skilled human capital, more mobile employee groups benefit from competitions through higher labour shares.
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Borrowers Under Water! Rare Disasters, Regional Banks, and Recovery Lending
Michael Koetter, Felix Noth, Oliver Rehbein
Journal of Financial Intermediation,
July
2020
Abstract
We show that local banks provide corporate recovery lending to firms affected by adverse regional macro shocks. Banks that reside in counties unaffected by the natural disaster that we specify as macro shock increase lending to firms inside affected counties by 3%. Firms domiciled in flooded counties, in turn, increase corporate borrowing by 16% if they are connected to banks in unaffected counties. We find no indication that recovery lending entails excessive risk-taking or rent-seeking. However, within the group of shock-exposed banks, those without access to geographically more diversified interbank markets exhibit more credit risk and less equity capital.
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