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 W.E. Upjohn Institute Dissertation Award's First Prize 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 holds research affiliations with CESifo and the Institute of Labor Economics (IZA). He will join MIT's Department of Economics as an Assistant Professor and the National Bureau of Economic Research as a Faculty Research Fellow in 2017.
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.
Altmann, S., Falk, A., Jäger, S., & Zimmermann, F. (2017). Learning about job search: A field experiment with job seekers in Germany. Journal of Public Economics (forthcoming).
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.
Ganong, P., & Jäger, S. (n.d.). A Permutation Test for the Regression Kink Design. Journal of the American Statistical Association (forthcoming).
The Regression Kink (RK) design is an increasingly popular empirical method for estimating causal effects of policies, such as the effect of unemployment benefits on unemployment duration. Using simulation studies based on data from existing RK designs, we empirically document that the statistical significance of RK estimators based on conventional standard errors can be spurious. In the simulations, false positives arise as a consequence of non-linearities in the underlying relationship between the outcome and the assignment variable, confirming concerns about the misspecification bias of discontinuity estimators pointed out by Calonico et al. (2014). As a complement to standard RK 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. We implement simulation studies based on existing RK applications that estimate the effect of unemployment benefits on unemployment duration and show that our permutation test as well as inference procedures proposed by Calonico et al. (2014) improve upon the size of standard approaches, while having sufficient power to detect an effect of unemployment benefits on unemployment duration.