Current Work

Author: Marcel Steffen Eckardt

Automation transforms the labor market, increases inequality, and thus creates social costs to society. We analyze the favorite level of automation selected in a political process between low-skill and high-skill workers. The selection is implemented by a task-specific tax in a task-based framework. In particular, we first focus on the special case where low-skill workers have the full power to select the level of automation. There, they prefer a positive task-specific tax on machines and thus less automation compared to the case without a tax. Then, we explore the effects of an automating economy by considering different types of technical changes. We show that these changes affect the selected level of automation and thus inequality between low-skill and high-skill workers. Finally, we emphasize that high-skill workers prefer a higher level of automation compared to the case without a tax. Hence, a higher weight of the high-skill workers in the political process increases the selected level of automation.

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Authors: Herbert Dawid and Michael Neugart

The advent of artificial intelligence is changing the task allocation of workers and machines in firms' production processes with potentially wide ranging effects on workers and firms. We develop an agent-based simulation framework to investigate the consequences of different types of automation for industry output, the wage distribution, the labor share, and industry dynamics. It is shown how the competitiveness of markets, in particular barriers to entry, changes the effects that automation has on various outcome variables, and to which extent heterogeneous workers with distinct general skill endowments and heterogeneous firms featuring distinct wage offer rules affect the channels via which automation changes market outcomes.

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Author: Selen Yildirim

In this paper, we argue that return migration needs to be analyzed by taking the interdependent location choice of the parent and the child into account. We formulate a model featuring a one-person household with his offspring, where parent decides the human capital investment of the child and the child determines the migration strategy and the frequency of attention to provide to his parent. We introduce the asymmetric assimilation of the generations such that child receives a preference shock in favor of the host country.
Empirically testable predictions are derived from the model. Parents with weak preferences over home country intend to stay and invest more in their children's human capital. Decreasing human capital investment leads to an increase in the probability of return for both the child and the parent. A higher cost of attention in case of separation decreases the probability of family members to be separated. The predictions of the model are tested using father-child pairs in the German Socio-Economic Panel. The estimates suggest that fathers who intend to return send their children to low-track secondary schools. This effect is even more prominent for daughters. There is a negative impact of upper secondary school track enrollment on the return migration when the child becomes an adult. Child's preference over host country has a negative impact on return migration of both. Long distance to the country of origin and poor health status of the father are associated with a lower probability of father-child pair being separated.

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Author: Michael Neugart

This paper brings individual level evidence to the hypothesis that women holding political offices affects mass mobilization. With a regression discontinuity design, I analyze the effect of close victories of directly elected female candidates in mixed-gender races at the federal elections in Germany in 2013 on individuals' decisions to turnout at the federal elections in Germany in 2017. In contrast to previous studies, when analyzing the effects of women in important political positions on turnout, mediating channels such as changes in the pool of candidates and policy implications for voters after a close victory of a female candidate are taken into account. The results indicate no effect of women winning a close electoral race on female turnout in the future. These findings hold even when considering intermediate and possibly compensating channels affecting turnout.

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Authors: Michael Neugart and Anna Zaharieva

Abstract: Empirical studies show that female workers are under-represented in highest hierarchical positions of companies, which is known as the glass-ceiling effect. In this study we investigate the relationship between social networks and the glass-ceiling effect. Specifically, we develop an equilibrium search and matching model where job ladders consist of three hierarchical levels and social networks are generated endogenously. Male and female workers move up in the hierarchical ladder via job-to-job transitions between firms and internal promotions within firms. They also accumulate experience which is a necessary requirement for applying to jobs in the highest hierarchical level. Open vacancies can be filled by formal matching of applicants to jobs or by referrals, which implies that senior workers recommend their social contacts for the job. Social networks exhibit gender homophily, which reflects the fact that social ties are more likely to be formed between workers of the same gender. In a setting when female workers are the minority, there are too few female contacts in the social networks of their male colleagues. This disadvantage implies that female workers are refereed less often for the jobs and under-represented in senior hierarchical positions of firms. We show that referrals via homophilous social networks can explain part of the total wage gap stemming from the glass-ceiling effect in Germany (6.4%). This mechanism is amplified by more hierarchical firm structures, stronger clustering of social networks, and earlier promotion times.

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