Simon Jäger works as a postdoctoral researcher at the Institute on Behavior and Inequality. He conducts research in labor, public, and behavioral economics. He graduated with a PhD in economics from Harvard University after studying economics at the University of Bonn and the University of California, Berkeley. His dissertation was awarded the First Prize of the W.E. Upjohn Institute Dissertation Award and Harvard University's David A. Wells Prize for the best dissertation in economics. His work combines experimental and quasi-experimental methods with large, administrative datasets to shed light on the functioning of labor markets and the origins and consequences of inequality. He will join MIT's Department of Economics as an Assistant Professor in the fall of 2017.
Jäger, S. How Substitutable are Workers? Evidence from Worker Deaths.
The substitutability between workers within a firm, and between incumbent workers and outsiders, matters for understanding the operation of internal labor markets and the consequences of worker turnover. To assess the substitutability of workers, I estimate how exogenous worker exits affect a firm’s demand for incumbent workers and new hires. Using matched employer-employee data based on the universe of German social security records, I analyze the effects of 34,000 unexpected worker deaths and show that these worker exits on average raise the remaining workers’ wages and retention probabilities for a period of several years. These findings are difficult to reconcile with frictionless labor markets and perfect substitutability between incumbent workers and outsiders. The average effect masks substantial heterogeneity: Coworkers in the same occupation as the deceased see positive wage effects; coworkers in other occupations instead experience wage decreases when a high-skilled worker or manager dies. Thus, coworkers in the same occupation appear to be substitutes, while high-skilled workers and managers appear to be complements to coworkers in other occupations. Finally, when the external labor market in the deceased’s occupation is thin, incumbents’ wages respond more and external hiring responds less to a worker death. The results suggest that thin external markets for skills lead to higher firm-specificity of human capital and lower replaceability of incumbents.
Ganong, P., & Jäger, S. A Permutation Test for the Regression Kink Design.
The Regression Kink (RK) design is an increasingly popular empirical method for causal inference. Analogous to the Regression Discontinuity design, which evaluates discontinuous changes in the level of an outcome variable with respect to the running variable at a point at which the level of a policy changes, the RK design evaluates discontinuous changes in the slope of an outcome variable with respect to the running variable at a kink point at which the slope of a policy with respect to the running variable changes. We document empirically that RK estimates are highly sensitive to nonlinearity in the underlying relationship between the outcome and the assignment variable. As an alternative to standard inference, we propose that researchers construct a distribution of placebo estimates in regions with and without a policy kink and use this distribution to gauge statistical significance. Under the assumption that the location of the kink point is random, this permutation test has exact size in finite samples for testing a sharp null hypothesis of no effect of the policy on the outcome. In simulation studies with policy kinks, we find that statistical significance based on conventional standard errors may be spurious. In contrast, our permutation test has exact size even in the presence of non-linearity.
Altmann, S., Falk, A., Jäger, S., & Zimmermann, F. Learning about Job Search: A Field Experiment with Job Seekers in Germany.
We conduct a large-scale field experiment in the German labor market to investigate how information provision affects job seekers' employment prospects and labor market outcomes. Individuals assigned to the treatment group of our experiment received a brochure that informed them about job search strategies and the consequences of unemployment, and motivated them to actively look for new employment. We study the causal impact of the brochure by comparing labor market outcomes of treated and untreated job seekers in administrative data containing comprehensive information on individuals' employment status and earnings. While our treatment yields overall positive effects, these tend to be concentrated among job seekers who are at risk of being unemployed for an extended period of time. Specifically, the treatment effects in our overall sample are moderately positive but mostly insignificant. At the same time, we do observe pronounced and statistically significant effects for individuals who exhibit an increased risk of long-term unemployment. For this group, the brochure increases employment and earnings in the year after the intervention by roughly 4%. Given the low cost of the intervention, our findings indicate that targeted information provision can be a highly effective policy tool in the labor market.
Jäger, S., & Abeler, J. (2015). Complex Tax Incentives. American Economic Journal, 7(3), 1–28.