Fairness and the employment contract: North American regions versus Germany

Substantial evidence shows that North Americans are generallymore accepting of the market than Europeans and attribute marketoutcomes to a larger degree to effort or skill. Thus, NorthAmericans might be more accepting of layoffs and pay cuts thanGermans, and Germans might be more sensitive to the proceduresand conditions under which pay cuts and layoffs occur. The empiricalresults from our quasi-experiment are largely in line with thesehypotheses. The results may help to explain and be explainedby the different labour market institutions in the differentregions.     

Conditional risk measures in a bipartite market structure

In this paper, we study the effect of network structure between agents and objects on measures for systemic risk. We model the influence of sharing large exogeneous losses to the financial or (re)insurance market by a bipartite graph. Using Pareto-tailed losses and multivariate regular variation, we obtain asymptotic results for conditional risk measures based on the Value-at-Risk and the Conditional Tail Expectation. These results allow us to assess the influence of an individual institution on the systemic or market risk and vice versa through a collection of conditional risk measures. For large markets, Poisson approximations of the relevant constants are provided. Differences of the conditional risk measures for an underlying homogeneous and inhomogeneous random graph are illustrated by simulations.     

Fixing the Leak: Unemployment Incidence before and after a Major Reform of Unemployment Benefits in Germany

We present first empirical results on the effects of a large scale reduction in unemployment benefit entitlement lengths on unemployment inflows in Germany. We show that this highly disputed element of the Hartz‐Reforms in 2006 induced a rush of workers and firms to take advantage of the previous legislation in its last days. Furthermore, we find a considerable decline in transitions to unemployment and an increase in employment rates among older workers after the reform. Our results provide new evidence for the importance of changes in unemployment inflows for the analysis of changes in unemployment outflows.     

Wage settlements and wage setting: results from a multi-level model

Which dimensions of wage setting differ across establishments applying collective contracts and uncovered establishments? The empirical analysis reported here utilizes German linked employer–employee data for the years 1990, 1995 and 2001 and is restricted to workers without supervisory functions in larger manufacturing firms. Results show that the expected wage of an average worker is higher in firms applying collective contracts, while returns to human capital and the gender wage gap are reduced. Moreover, during the 1990s these effects became stronger.     

Gender, piece rates and wages: evidence from matched employer-employee data

Why are women disproportionately on piece rates? We investigatethree possible explanations: (1) Women are more likely to beon piece rates, because they have a shorter expected tenurethan men. (2) A greater demand for flexibility between workand home attracts women to work place technologies suitablefor variable pay based on individual performance. (3) Womenprefer piece rates, because they are subject to less wage discriminationwhen objective performance measures are available. The weightof our empirical evidence supports the third hypothesis. Theunexplained gender wage gap is substantially smaller in thepiece-rate regime than in the time-wage regime.     

When are bonus payments for managers perceived as fair? Results from a quasi-experiment

We investigate under which circumstances bonus payments for managers are accepted as fair, asking workers to judge several hypothetical scenarios. We find that perceptions vary widely with the characteristics of the situation, as well as with the workers’ general attitudes.