Institute for the Study of Labor

About: Institute for the Study of Labor is a nonprofit organization based out in Bonn, Germany. It is known for research contribution in the topics: Wage & Unemployment. The organization has 2039 authors who have published 13475 publications receiving 439376 citations.

The Economic Effects of the 1918 Influenza Epidemic

Abstract: The 1918-19 influenza epidemic killed at least 40 million people worldwide and 675,000 people in the United States, far exceeding the combat deaths experienced by the US in the two World Wars, Korea, and Vietnam combined. Besides its extraordinary virulence, the 1918-19 epidemic was also unique in that a disproportionate number of its victims were men and women ages 15 and 44, giving the age profile of mortality a distinct 'W' shape rather than the customary 'U' shape, and leading to extremely high death rates in the prime working ages. We examine the impact of this exogenous shock on subsequent economic growth using data on US states for the 1919-30 period. Controlling for numerous factors including initial income, density, urbanization, human capital, climate, the sectoral composition of output, geography, and the legacy of slavery, the results indicate a large and robust positive effect of the influenza epidemic on per capita income growth across states during the 1920s.

Compensation and Firm Performance

Abstract: This paper uses stochastic simulation and my US econometric model to examine the optimal choice of monetary policy instruments Are the variances, covariances, and parameters in the model such as to favor one instrument over the other, in particular the interest rate over the money supply? The results show that the interest rate and the money supply are about equally good as policy instruments in terms of minimizing the variance of real GNP The variances of some of the components of GNP are, however, much larger when the money supply is the policy instrument, as is the variance of the change in stock prices Therefore, if one's loss function is expanded beyond simply the variance of real GNP to variances of other variables, the interest rate policy does better The results thus provide some support for what seems to be the Fed's current choice of using the interest rate as its primary instrument Stochastic simulation is also used to estimate how much of the variance of real GNP is due to the error terms in the demand for money equations The results show that the contribution is not very great even when the money supply is the policy instrument

Minimum Wage Channels of Adjustment

Abstract: The economic impact of the 2007-2009 increases in the federal minimum wage (MW) is analyzed using a sample of quick-service restaurants in Georgia and Alabama. Store-level bi-weekly payroll records for individual employees are used, allowing us to precisely measure the MW compliance cost for each restaurant. We examine a broad range of adjustment channels in addition to employment, including hours, prices, turnover, training, performance standards, and non-labor costs. Exploiting variation in the cost impact of the MW across restaurants, we find no significant effect of the MW increases on employment or hours over the three years. Cost increases were instead absorbed through other channels of adjustment, including higher prices, lower profit margins, wage compression, reduced turnover, and higher performance standards. These findings are compared with MW predictions from competitive, monopsony, and institutional/behavioral models; the latter appears to fit best in the short run.

Cohort Effects in the Educational Attainment of Second Generation Immigrants in Germany: An Analysis of Census Data

Abstract: Even though second generation immigrants make up ever increasing population shares in industrialized countries we know little about their social integration and well-being. This study focuses on the educational attainment of German born children of immigrants. Their schooling success still lags behind that of natives. We investigate completed degrees and school attendance of German born immigrants and find considerable evidence suggesting that this group does not assimilate to native education standards but instead increasingly falls behind.

Youth unemployment in the OECD: Demographic shifts, labour market institutions, and macroeconomic shocks*

Abstract: We use a panel of OECD countries to gauge the relevance of the relative size of the youth population, labour market institutions and macroeconomic shocks at explaining observed relative youth unemployment rates. We find that the fluctuations of the youth population size caused by the baby boom of the 1950s and 1960s and the subsequent decline of fertility in many European countries are positively associated with fluctuations in relative youth unemployment rates. We also find that some labour market institutions contribute to increase youth unemployment, and that the adjustement to macroeconomic shocks has affected relatively more to young workers than to adult workers. To motivate the effects of institution on the relative unemployment rate of young workers, we lay out a simple theoretical model that builds on the imperfect substitutability of workers of different ages, and on the non-allocative role of (age specific) wages.