In this study gender differentials in professional status attainment are analyzed. In the theoretical literature, unequal treatment of females is often rationalized by their higher probability of quitting. To test this hypothesis empirically we use data from the Austrian microcensus and find that neither the risk of childbearing nor different productive characteristics can explain the crowding of females in lower hierarchical positions. Females have to fulfill higher ability standards to be promoted; work experience is not rewarded in the same manner as it is for men.

Using information on job changes and search behavior of workers and controlling for endogenousnmobility we study firm-size wage differentials in Switzerland. We find that the observed crosssectionalnfirm size premium cannot be explained exclusively by worker heterogeneity. Almost 50n% of the cross-section differential is a firm-size effect.

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.

This paper analyzes the effects of changes in the duration of paid, job-protected parental leave on mothers' higher-order fertility and postbirth labor market careers. Identification is based on a major Austrian reform increasing the duration of parental leave from one year to two years for any child born on or after July 1, 1990. We find that mothers who give birth to their first child immediately after the reform have more second children than prereform mothers, and that extended parental leave significantly reduces return to work. Employment and earnings also decrease in the short run, but not in the long run. Fertility and work responses vary across the population in ways suggesting that both cash transfers and job protection are relevant. Increasing parental leave for a future child increases fertility strongly but leaves short-run postbirth careers relatively unaffected. Partially reversing the 1990 extension, a second 1996 reform improves employment and earnings while compressing the time between births.

We present a test of Coasean theories of efficient separations. We study a cohort of jobs from the introduction through the repeal of a large age- and region-specific unemployment benefit extension in Austria. In the treatment group, 18.5% fewer jobs survive the program period. According to the Coasean view, the destroyed marginal jobs had low joint surplus. Hence, after the repeal, the treatment survivors should be more resilient than the ineligible control group survivors. Strikingly, the two groups instead exhibit identical post-repeal separation behaviour. We provide, and find suggestive evidence consistent with, an alternative model in which wage rigidity drives the inefficient separation dynamics.

We incorporate consumption indivisibilities into the Krugman (1980) model and show that an importer's per capita income becomes a primary determinant of “export zeros”. Households in the rich North (poor South) are willing to pay high (low) prices for consumer goods; hence, unconstrained monopoly pricing generates arbitrage opportunities for internationally traded products. Export zeros arise because some northern firms abstain from exporting to the South, to avoid international arbitrage. Rich countries benefit from a trade liberalization, while poor countries lose. These results hold also under more general preferences with both extensive and intensive consumption margins. We show that a standard calibrated trade model (that ignores arbitrage) generates predictions on relative prices that violate no-arbitrage constraints in many bilateral trade relations. This suggests that international arbitrage is potentially important.

This paper develops a sufficient statistics framework for analyzing the welfare effects of disability insurance (DI). We derive social‐optimality conditions for the two main DI policy parameters: (i) eligibility rules and (ii) benefit levels. Applying this framework to two restrictive DI reforms in Austria, we find that tighter DI eligibility rules triggered higher fiscal cost savings and lower insurance losses. Hence, tighter DI eligibility rules dominate DI benefit reductions in scaling back the Austrian DI system.

This paper studies how changes in the two key parameters of unemployment insurance—the benefit replacement rate (RR) and the potential benefit duration (PBD)—affect the duration of unemployment. To identify such an effect we exploit a policy change introduced in 1989 by the Austrian government, which affected various unemployed workers differently: a first group experienced an increase in RR; a second group experienced an extension of PBD; a third group experienced both a higher RR and a longer PBD; and a fourth group experienced no change in the policy parameters. We find that unemployed workers react to the disincentives by an increase in unemployment duration, and our empirical results are consistent with the predictions of job search theory. We use our parameter estimates to split up the total costs to unemployment insurance funds into costs due to changes in the unemployment insurance system with unchanged behaviour and costs due to behavioural responses of unemployed workers. Our results indicate that costs due to behavioural responses are substantial.

We provide evidence that unemployment insurance affects equilibrium conditions in the labor market, which creates significant “market externalities.” We provide a framework for identification of such equilibrium effects and implement it using the Regional Extension Benefit Program (REBP) in Austria which extended the duration of UI benefits for a large group of eligible workers in selected regions of Austria. We show that non-eligible workers in REBP regions have higher job finding rates, lower unemployment durations, and a lower risk of long-term unemployment. We discuss the implications of our results for optimal UI policy.

This article explores the relationship between the duration of a vacancy and the starting wage of a new job, using linked data on vacancies, the posting establishments, and the workers eventually filling the vacancies. The unique combination of large-scale, administrative worker, establishment, and vacancy data is critical for separating establishment- and job-level determinants of vacancy duration from worker-level heterogeneity. Conditional on observables, we find that vacancy duration is negatively correlated with the starting wage and its establishment component, with precisely estimated elasticities of −0.07 and −0.21, respectively. While the negative relationship is qualitatively consistent with search-theoretic models where firms use the wage as a recruiting device, these elasticities are small, suggesting that firms’ wage policies can account only for a small fraction of the variation in vacancy filling across establishments.