Hannah Illing

The Gender Gap in Earnings Losses after Job Displacement

With Johannes Schmieder and Simon Trenkle

[Journal of the European Economic Association, Volume 22, No. 5, October 2024]

Abstract

We compare men and women who are displaced from similar jobs by applying an event study design combined with propensity score matching and reweighting to administrative data from Germany. After a mass layoff, women’s earnings losses are about 35% higher than men’s, with the gap persisting five years after displacement. This is partly explained by women taking up more part-time employment, but even women’s full-time wage losses are almost 50% higher than men’s. Parenthood magnifies the gender gap sharply. Finally, displaced women spend less time on job search and apply for lower-paid jobs, highlighting the importance of labor supply decisions.

Hiring and the Dynamics of the Gender Gap

With Hanna Schwank and Linh Tô

Abstract

We investigate how the same hiring opportunity leads to different labor market outcomes for male and female full-time workers. Using administrative data from Germany spanning 1981 to 2016, we analyze firms’ wage-setting behavior in response to exogenous vacancies caused by sudden worker deaths. By identifying external replacement workers, we compare positions that, ex-ante, are equally likely to hire a male or female worker. Our analysis shows that female replacement workers’ starting wages are, on average, 11 log points lower than those of equally productive male counterparts. This gap is unlikely to be explained by differences in hours, within-firm adjustments, or outside options. Instead, the results suggest that firms may statistically discriminate by gender and that differences in worker bargaining play an important role. The gender hiring opportunity gap is lower in contexts where gender equality norms are stronger. These findings suggest that a significant portion of the gender wage gap originates within firms at the hiring stage, contributing to our understanding of the mechanisms behind persistent gender disparities in wages.

The Labor Market Costs of Job Displacement by Migrant Status

With Mária Balgová, IZA Discussion Paper 17496

[Revise and resubmit at the Journal of Human Resources]

Abstract

This paper examines the differential impact of job displacement on migrants and natives. Using administrative data for Germany from 1997-2016, we identify mass layoffs and estimate the trajectory of earnings and employment of observationally similar migrants and natives displaced from the same establishment. Despite similar pre-layoff careers, migrants lose an additional 9% of their earnings in the first 5 years after displacement. This gap arises from both lower re-employment probabilities and post-layoff wages and is not driven by selective return migration. Key mechanisms include sorting into lower-quality firms and depending on lower-quality coworker networks during job search.

Crossing Borders: Labor Market Effects of European Integration

[revised and resubmitted for the Journal of Human Resources, new version!]

Abstract

This paper studies the labor market effects of out- and in-migration in the context of cross-border commuting. It investigates an EU policy reform that granted Czech citizens full access to the German labor market, resulting in a Czech commuter outflow across the border to Germany. Exploiting the fact that the reform specifically impacted the Czech and German border regions, I use a matched difference-in-differences design to estimate its effects on local labor markets in both countries. Using a novel dataset on Czech regions, I show that the Czech border region experienced a decline in unemployment rates due to the worker outflow, and a corresponding increase in vacancies. Accounting for differences in exposure to trade, I find no change in native employment or wages in German border municipalities. This holds both at the regional level and for a cohort of incumbent native workers. Overall, my findings suggest that the Czech border region faced labor shortages, while local labor markets in Germany were able to fully absorb the migrant inflow.

Mobility and the Labor Market Effects of Being Affected by a Flood Event

With Hanna Schwank, Johannes Weber and Leonie Wicht

The Impact of a Forced Migrant Outflow on Firms and Workers

With Britta Jensen and Cem Özgüzel

The Impact of Job Disruptions on Households During the Covid-19 Pandemic

Policy Brief (in German)

With Mara Buhmann, Michael Oberfichtner, Nico Pestel, Johannes Schmieder and Simon Trenkle