Contributions published at Macroeconomics and Labor Markets (Josef Zweimüller)

"We study the short-run effect of involuntary job loss on comprehensive measures of publicnhealth costs. We focus on job loss induced by plant closure, thereby addressing the reversencausality problem of deteriorating health leading to job loss as job displacements due to plant closure are unlikely caused by workers' health status, but potentially have important effects on individual workers' health and associated public health costs. Our empirical analysis isnbased on a rich data set from Austria providing comprehensive information on various typesnof health care costs and day-by-day work history at the individual level. Our central findings are: (i) overall expenditures on medical treatments (hospitalizations, drug prescriptions, doctornvisits) are not strongly affected by job displacement; (ii) job loss increases expenditures for antidepressants and related drugs, as well as for hospitalizations due to mental health problems for men (but not for women); and (iii) sickness benefits strongly increase due to job loss."

This paper presents a simple conceptual framework intended for describing individuals'nsubjective evaluations of occupational wage inequality and their demand for redistribution. Most importantly, the framework explicitly allows for the distinction between individuals'nperceptions and their normative beliefs. I illustrate the framework using Swiss survey data from the International Social Survey Program. While most individuals accept quite large wage differentials across occupations, they also prefer a lower level of overall wage inequality than what they perceive to exist. Consistent with previous evidence, the empirical analysis also shows that financial self-interest, social norms about distributive justice and perceptions of how wages are determined in reality all simultaneously influence the demand for redistribution. Finally, I show that subjective inequality measures and the demand for redistribution are substantially significant predictors of both individuals' support for governmentnintervention and their party identification. This result provides indirect evidencenon the presumed link between perceptions and beliefs on the one hand and and politicalnoutcomes on the other hand.

The Austrian Social Security Database (ASSD) is a matched firm-worker data set, which records the labor market history of almost 11 million individuals from January 1972 to April 2007. Moreover, more than 2.2 million firms can be identified. The individual labor market histories are described in the following dimensions: very detailed daily labor market states and yearly earnings at the firm-worker level, together with a limited set of demographic characteristics. Additionally the ASSD provides some firm related information, such as geographical location and industry affiliation. This paper is a short description of this huge data base and intended for people using this data in their own empirical work.

We present a model of structural change due to non-linear Engel-curves for consumer goods. Goods are sequentially introduced starting out as a luxury with high income elasticity and ending up as a necessity with low income elasticity. Although this leads to rising and falling sectoral employment shares, the model exhibits a steady growth path along which the Kaldor facts are satisfied. Extending the basic model to the case of endogenous product innovations shows that complementarities between aggregate and sectoral growth may give rise to multiple equilibria.

This paper deals with the compensation for non-fatal accident risk in Switzerland and presents empirical estimates of the value of a statistical injury. We approach the problem of endogenous sorting of workers into jobs with different accident risks based on unobserved productivity differences twofold. First, we have access to the number of accidents not only at the level of industries, but within cells defined over industry x skill-level of the job, which allows us to estimate risk compensation within groups of workers defined over the same cells. Second, we capitalize on the partial panel structure of our data which allows us to empirically isolate the wage component specific to the employer. Our different approaches to identification in fact yield very different estimates of the value of a statistical injury. Our preferred estimate gives an estimate of about 40,000 Swiss francs (per prevented injury pernyear).

This article evaluates the effects of Swiss active labour market programmes on the job chances of unemployed workers. The main innovation is a comparison of two important dynamic evaluation estimators: the ‘matching’ estimator and the ‘timing-of-events’ estimator. We find that both estimators generate different treatment effects. According to the matching estimator temporary subsidised jobs shorten unemployment duration whereas training programmes and employment programmes do not. In contrast, the timing-of-events estimator suggests that none of the Swiss active labour market programmes shortens unemployment duration.

The computer-aided tool to analyse a project environment (PUA) developed by the MIO group at the University of Zurich has a gap in possible quality assurance methods in the form of missing unit tests. Conceptually, this thesis will close the gap completely. Together with important aspect oriented concepts of unit tests, the physical and modular structure of the test framework is a fundamental part of the test concept and this thesis. The result is a test framework with the de facto standard JUnit, which is physically and modularly closely related to the productive code. This test framework is also partially implemented. Some functional bugs could already be detected by the test framework and they are documented in this thesis. The thesis provides a basis for further unit tests assuring the enduring quality of the project environment analysis tool.

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We introduce non-homothetic preferences into an innovation-based growth model and study how income and wealth inequality affect economic growth. We identify a (positive) price effect -- where increasing inequality allows innovators to charge higher prices and (negative) market-size effects -- with higher inequality implying smaller markets for new goods and/or a slower transition of new goods into mass markets. It turns out that price effects dominate market-size effects. We also show that a redistribution from the poor to the rich may be Pareto improving for low levels of inequality.

We introduce non-homothetic preferences into a general equilibrium model of monopolistic competition and explore the impact of income inequality on the medium-run macroeconomic equilibrium. We find that (i) a sufficiently high extent of inequality divides the economy into mass consumption sectors (where firms charge low prices and hire manynworkers) and exclusive sectors (where firms charge high prices and hire few workers). (ii)nHigh inequality may lead to a situation of underemployment and that underemployment could be ”Keynesian” in the sense that it cannot be cured by downward-flexible real wages.n(iii) A redistribution of income from rich to poor (by means of progressive taxation) leadsnto higher employment and such a redistribution is Pareto-improving. (iv) An exogenous increase in (minimum) real wages have a cost effect (that lets firms reduce their employment) and a purchasing power effect (that creates an incentive for mass production and raises aggregate employment) with ambiguous net effects. (v) The economy may featurenmultiple equilibria where full-employment and unemployment equilibria co-exist.

STATA ist eine umfangreiche Statistiksoftware, welche sich sowohl zur Verwaltung von umfangreichen Datenbeständen als auch zur statistischen Analyse eignet. Diese kurze Einführungngibt einen ¨Uberblick¨uber die allgemeine Syntax des Programmes sowie die wichtigsten Anweisungen zur Datenaufbereitung und –analyse. Diese Einführung dient der selbstädigen Einarbeitungnin das Programm. Anhand eines Beispieldatensatzes können die meisten der beschriebenennBefehle angewendet und nachvollzogen werden.

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"We study the causal effects of changes in parental leave provisions on fertility and return-to-work behavior. We exploit a policy change that took place in 1990 in Austria which extended the maximum duration of parental leave from the child’s first to the child’s second birthday. As parental leave benefits can be automatically renewed when a new mother is still on leave from a previous child, this created a strong incentive to ”bunch” the time of work in case of multiple planned children and/or to increase fertility. We study the quantitative effect of this incentive using an empirical strategy which resembles a true experimental set-up very closely. In particular, assignment to treatment is random and treated and controls face (almost) identical environmental conditions. We find that treated mothers have a 4.9 percentage points (or 15 percent) higher probability to get an additional child within the following three years; and a 3.9 percentage points higher probability in the following ten years. Thisnsuggests that not only the timing but also the number of children were affected by the policy change. We also find that parental leave rules have a strong effect on mothers’ return-to-work behavior. Pernadditional months of maximum parental leave duration, mothers’ time of work is reduced by 0.4 to 0.5 months. The effects of a subsequent policy change in 1996 when maximum parental leave duration was reduced from the child’s second birthday to the date when the child became 18 months old brought about no change in fertility behavior, but a labor supply effect that is comparable in magnitude to thenone generated by the 1990 policy change. This can be rationalized by the incentives created throughnautomatic benefit renewal."

Right-wing extremism is a serious problem in many societies. A prominent hypothesis states that unemployment plays a crucial role for the occurrence of right-wing extremist crime. In this paper we empirically test this hypothesis. We use a previously not used data set which includes all officially recorded right-wing criminal acts in Germany. These data are recorded by the German Federal Criminal Police Office on a monthly and state level basis. Our main finding is that there is in fact a significant positive relation between unemployment and right-wing criminal activities. We show further that the big difference in right-wing crime between East and West German states can mostlynbe attributed to differences in unemployment. This finding reinforces the importance of unemployment as an explanatory factor for right-wing crime and questions explanations based solely on the different socialization in former communist East Germany and the liberal West German states. Our data furthernallow us to separate violent from non-violent right-wing crimes. We show that unemployment is closelynrelated to both types of crimes, but that the association with non-violent crimes is much stronger. Since right-wing crime is committed particularly by relatively young males, we also explore whethernthe youth unemployment rate is a better predictor for right-wing crime than total unemployment. This hypothesis can be rejected: given total unemployment, a higher share of youth unemployment does not affect right-wing extremist crime rates.