Seminar für Nationalökonomie und Finanzwissenschaft (Prof. Fuest)
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Research

Labor Market Policy

Christian Holzner und Makoto Watanabe, “Do intermediaries reduce search frictions?”. (latest version)
In this paper we show empirically that the PEA reduces search frictions by spreading the applications of registered unemployed more evenly among vacancies than the private market. For identification we use the fact that the German Job Vacancy Survey provides for each registered vacancy information on the number of applicants arriving via the private market and via the PEA. This allows us to compare for the same set of vacancies the distribution of applicants arriving via these two channels. The result is very robust. It also holds if we control for a very rich set of vacancy characteristics and look at the distribution of the residuals. We also present suggestive evidence that the PEA helps firms that have been unable to hire until the intended starting date to fill their vacancy.

Christian Holzner und Makoto Watanabe, “Understanding the Role of the Public Employment Agency”. (latest version)
We investigate the implications of having such an additional market place. The intermediation services of the PEA ensure applications regardless the attractiveness of the posted vacancy. This should in theory enable registered firms to pay lower wages. Paying lower wages should lead to adverse selection. When deciding whether or not to register with the PEA firms have to trade off the negative selection of applicants coming through the PEA with the benefit of paying lower wages. We test these theoretical predictions empirically using the German Job Vacancy Survey and the GSEOP and find strong support for the fact that applicants send by the PEA are on average less suitable compared to workers, who applied through the private market. We also find that registered vacancies contribute to residual wage inequality by paying lower wages.

Andreas Bastgen and Christian Holzner, 2017, “Employment protection and the market for innovations”, Labour Economics, 46, 77–93. (old version)
In this paper we study the effects of employment protection taking into account that firms can invest in R&D or buy new technologies in order to restore their productivity. To do so we developed an equilibrium matching model with an imperfect labor and innovation market. If employment protection is introduced, firms' willingness to pay for product or process innovations increases. This shifts economic activity towards firms specializing in process and product innovation and triggers entry of new start-ups. We calibrate our model to match aggregate US labor and product market statistics and show that our model generates the estimated negative impact of wrongful dismissal laws in the US on productivity and a positive effect on the number of innovations and start-ups.

Christian Holzner and Andrey Launov, 2010, “Search equilibrium and social and private returns to education”, European Economic Review, 54, 39–59. (old version)
In this paper we develop a structural equilibrium on-the-job search model, which allowed us to empirically identify the social and private returns to education by building an on-the-job search model where production requires different skill levels. We show that the decreasing unemployment risk for higher skill groups in Germany up to 2001 increased private returns above the social optimal level, calling for a labor market reform to decrease unemployment among the low skilled (as the later Hartz reforms did).

Christian Holzner, Volker Meier and Martin Werding, 2010, “Workfare, monitoring, and efficiency wages”, Journal of Macroeconomics, 32, 157–168. (old version)
Christian Holzner, Volker Meier and Martin Werding, 2010, “Time limits in a two-tier unemployment benefit scheme under involuntary unemployment”, CESifo Economic Studies, 56. (old version)
In this paper we incorporated welfare to work policies into efficiency wage models to understand the welfare implications of such policies. In a paper, which we published in the Journal of Macroeconomics, we show that with a stronger work requirement welfare of employed and unemployed can increase even if net wages fall, since the decreased shirk incentives caused by stronger work requirements increases job creation. Stricter time limits have similar effects as we show in a paper published in CESifo Economic Studies. Both projects were financed by the German Research Foundation.

Christian Holzner and Sonja Munz, 2013, “Should local public employment services be merged with local social benefit administrations?”, Journal for Labour Market Research, 46 (2), 83–102. (old version)
In this paper we estimate a regional matching function and to evaluate which institutional and organizational processes increased the chances of long-term unemployed to find a job.

Family Economics

Christian Holzner und Bastian Schulz, “Marriage and Divorce under Labor Market Uncertainty”. (latest version)
In this paper we study match formation and dissolution in frictional marriage markets under labor market uncertainty. We propose a search model in which ex-ante heterogeneous men and women search for partners in the marriage market and for jobs in the labor market. In the marriage market, individuals match assortatively on education and draw a match-specific shock component representing mutual affection. Divorces can happen due to both match-specific reasons and labor market transitions. We structurally estimate our model using German micro data and decompose the observed flow of divorces into so-called labor market divorces and match-specific divorces. While more than 90% of divorces happen for match-specific reasons, the share of labor market divorces has increased significantly in Germany since the mid 2000s. Interestingly, most of this increase is driven by couples in which a previously unemployed woman starts working, more so for highly-educated women.

Trade and Labor

Christian Holzner und Mario Larch, “Capacity constraining labor market frictions in a global economy”. (latest version)
In this paper we examine the link between wage inequality and trade liberalization. We combine convex vacancy creation costs and on-the-job search in a new trade theory model with heterogeneous firms to explain how trade liberalization affects trade patterns, wages, and wage inequality. Convex costs shape firms' responses to trade liberalization. Firms will only serve few export markets, more productive firms will export to more countries and charge higher or similar prices compared to less productive firms. Trade liberalization also affects labor market outcomes. Increased profits by exporting firms trigger firm entry, reduce unemployment and increase wage inequality.

Search Theory

Pieter Gautier and Christian Holzner, 2017, “Simultaneous Search and Efficiency of Entry and Search Intensity”, American Economic Journal: Microeconomics, 9(3), 245–282. (old version)
Pieter Gautier und Christian Holzner, “Maximum matching in the labor market under incomplete information”. (latest version)
In two theoretical projects, where workers are able to simultaneously apply to several firms, we show that different competitive environments endogenously generated by the application process generate wage inequality among equally productive workers. We use methods from network theory and computer science to show that flexible wage negotiations during the recruitment process lead to the maximum matching in any given network between workers and firms where applications are the links. If workers propose wages, flexible wage negotiations lead to efficient firm entry, worker participation, and number of applications even if equally productive workers are paid differently.

Personnel Economics

Felix Ehrenfried and Christian Holzner, 2019, “Dynamics and Endogeneity of Firms Recruitment Behavior”, Labour Economics, 57, 63–84. (old version)
With Felix Ehrenfried (former PhD student of mine) I use the German Job Vacancy Survey to investigate how firms adjust their recruitment behavior during the recruitment process. We can show that firms hiring far ahead of the intended starting date are lucky because they received a relatively high fraction of suitable applicants. Those firms hiring just in time and even more so those hiring at least more than two weeks after the intended starting date report significantly more difficulties during the recruitment process. As a response, they increase the number of search channels, are more often willing to bargain over pay, to pay higher wages, and to hire workers with a qualification and experience below their prior expectation.

Hermann Gartner und Christian Holzner, “Wage posting as a positive selection device: Theory and empirical evidence”. (latest version)
In another project using the same data source Hermann Gartner (IAB Nuremberg) and I investigate what strategy is best suited to attract suitable applicants, posting a fixed wage or offering to bargain over the wage. In contrast to the theoretical literature we find empirically that firms, which post wages, attract more suitable applicants than firms, which offer to bargain. To explain this observation, we show theoretically that it is sufficient to assume that firms commit not only to the posted wage but also to a hiring threshold, which deters less suited workers from applying.

Christian Holzner, “On the coexistence of different personnel policies: The role of unions”. (latest version)
In this paper I investigate how unionized firms with a more egalitarian wage structure are able to compete with non-unionized firms that use a competitive wage policy. Theoretically, these two types of wage policies can coexist, if I assume a framework where unions help firms commit to a fixed wage-tenure contract, i.e., not to renegotiate the contract if the worker receives an outside offer. Non-unionized firms renegotiate the contract if a worker receives an outside offer in order to keep the worker. The fact that renegotiations provide an incentive for employees to search for outside offers to be able to renegotiate higher wages implies that non-unionized firms can face the same quit rate as unionized firms. The theoretical model generates several predictions, which I currently investigate empirically using the German linked employer-employee dataset.

Other publications:

Monographs / Books:

  • Stefan Bauernschuster, Natalia Danzer, Timo Hener, Christian Holzner, Helmut Rainer and Janina Reinkowski, Kindergeld, ifo Forschungsberichte 60, Ifo Institute, Munich, 2013.
  • Wolfgang Auer, Stefan Bauernschuster, Natalia Danzer, Mine Hancioglu, Bastian Hartmann, Timo Hener, Christian Holzner, Notburga Ott, Helmut Rainer, Janina Reinkowski and Martin Werding, Kinderbetreuung, ifo Forschungsberichte 59, Ifo Institute, Munich, 2013.
  • Martin Werding, Robert Jaeckle, Christian Holzner, Marc Piopiunik and Ludger Woessmann, Humankapital in Deutschland: Wachstum, Struktur und Nutzung der Erwerbseinkommenskapazität von 1984 bis 2006, Mohr Siebeck, Tübingen, 2009.
  • Martin Werding, Thiess Büttner, Herbert Hofmann, Christian Holzner and Sonja Munz, Makroevaluation der SGB II-Grundsicherungsstellen, ifo Beiträge zur Wirtschaftsforschung, 33, Ifo Institute, Munich, 2009.
  • Thiess Büttner, Peter Egger, Herbert Hofmann, Christian Holzner, Mario Larch, Volker Meier, Chang Won Nam, Rigmar Osterkamp, Rüdiger Parsche and Martin Werding, Tu felix Austria: Wachstums- und Beschäftigungspolitik in Österreich und Deutschland im Vergleich, ifo Forschungsberichte 31, Ifo Institute, Munich, 2006.
  • Hans-Werner Sinn, Christian Holzner, Wolfgang Meister, Wolfgang Ochel and Martin Werding, Redesigning the Welfare State: Germany’s Current Agenda for an Activating Social Assistance, Ifo Economic Policy Series, Edward Elgar, 2006.
  • Christian Holzner, Asymmetric information and education in the labor market: Three essays in search theory, Dissertation an der LMU Munich, 2005.
  • Robert Fenge, Andrea Gebauer, Christian Holzner, Volker Meier and Martin Werding, Alterssicherungssysteme im internationalen Vergleich: Finanzierung, Leistung, Besteuerung, ifo Beiträge zur Wirtschaftsforschung 10, Ifo Institute, Munich, 2003.
  • Hans-Werner Sinn, Christian Holzner, Wolfgang Meister, Wolfgang Ochel and Martin Werding, Welfare to Work in Germany: A Proposal on How to Promote Employment and Growth, CESifo Research Report 1/2003, Ifo Institute, Munich, 2003.
  • Christian Holzner, Wolfgang Ochel and Martin Werding, Vom OFFENSIV-Gesetz zur Aktivierenden Sozialhilfe: Ein Konzept zur Reform der Arbeitsmarkt- und Sozialpolitik als Beitrag zu mehr Beschäftigung und Wachstum, ifo Forschungsbericht 17, Ifo Institute, Munich, 2003

Articles in professional journals:

  • Stefan Bauernschuster, Natalia Danzer, Anita Fichtl, Timo Hener, Christian Holzner, Helmut Rainer and Janina Reinkowski, “Child benefit and child allowances in Germany: their impact on family policy goals”. DICE Report, 12(1), 2014, 37.
  • Stefan Bauernschuster, Natalia Danzer, Anita Fichtl, Timo Hener, Christian Holzner, Helmut Rainer and Janina Reinkowski, "Kindergeld und Kinderfreibeträge in Deutschland: Evaluierung der Auswirkungen auf familienpolitische Ziele", ifo Schnelldienst 66 (09), 2013, 28-36.
  • Wolfgang Auer, Stefan Bauernschuster, Natalia Danzer, Anita Fichtl, Timo Hener, Christian Holzner, Helmut Rainer, Janina Reinkowski and Martin Werding, "Öffentlich geförderte Kinderbetreu-ung in Deutschland: Evaluierung der Auswirkungen auf die Arbeitsmarktbeteiligung von Müttern", ifo Schnelldienst 66 (07), 2013, 31-40.
  • Stefan Bauernschuster and Christian Holzner, "Atypische Beschäftigung: Leiharbeit, befristete Beschäftigungsverhältnisse, Minijobs", in: Georg Milbradt, Gernot Nerb, Wolfgang Ochel und Hans-Werner Sinn (Hrsg.): Der ifo Wirtschaftskompass, Carl Hanser, Munich, 2011, 124-125.
  • Stefan Bauernschuster and Christian Holzner, "Kündigungsschutz: Schutz der Kernbelegschaft oder Chance für Neueinstellungen?", in: Georg Milbradt, Gernot Nerb, Wolfgang Ochel und Hans-Werner Sinn (Hrsg.): Der ifo Wirtschaftskompass, Carl Hanser, Munich, 2011, 130-131.
  • Stefan Bauernschuster and Christian Holzner, "Explizite und implizite Mindestlöhne: Zwischen Einkommenssicherung und Vernichtung von Arbeitsplätzen", in: Georg Milbradt, Gernot Nerb, Wolfgang Ochel und Hans-Werner Sinn (Hrsg.): Der ifo Wirtschaftskompass, Carl Hanser, Munich, 2011, 132-133.
  • Christian Holzner, "Hartz IV: Warum es Deutschland heute besser geht", in: Georg Milbradt, Gernot Nerb, Wolfgang Ochel und Hans-Werner Sinn (Hrsg.): Der ifo Wirtschaftskompass, Carl Hanser, Munich, 2011, 162-163.
  • Stefan Bauernschuster, Wido Geis, Christian Holzner and Helmut Rainer, “Das Bundesverfassungsgerichtsurteil zu den Hartz-IV-Regelsätzen: Hintergrund und Bedeutung”, ifo Schnelldienst 63 (05), 2010, 21-29.
  • Christian Holzner, Sonja Munz and Silke Übelmesser, “Fiskalische Wirkungen der Auswanderung ausgewählter Berufgruppen”, ifo Schnelldienst 62 (17), 2009, 28-33.
  • Christian Holzner and Sonja Munz, “Makroanalyse und regionale Vergleich: Untersuchungsfeld 4 im Rahmen der Evaluation der Experimentierklausel nach § 6c SGB II”, ifo Schnelldienst 62 (1), 2009, 48-57.
    Hans-Werner Sinn, Wido Geis and Christian Holzner, “Die Agenda 2010 und die Armutsgefährdung”, ifo Schnelldienst 62 (17), 2009, 23-27.
  • Hans-Werner Sinn, Christian Holzner, Wolfgang Meister, Wolfgang Ochel and Martin Werding, “Die zentralen Elemente der Aktivierenden Sozialhilfe”, ifo Schnelldienst 60 (4), 2007, 48-53.
  • Christian Holzner, “Hartz IV fördert Minijobs und krankt an der ungenügenden Durchsetzbarkeit der Zumutbarkeitsregeln, Themenschwerpunkt Arbeitslosengeld II”, ifo Dresden berichtet 13 (2), 2006, 5-9.
  • Hans-Werner Sinn, Christian Holzner, Wolfgang Meister, Wolfgang Ochel and Martin Werding, “Aktivierende Sozialhilfe 2006: Das Kombilohn-Modell des ifo Instituts”, ifo Schnelldienst 59 (2), 2006, 6-27.
  • Herbert Hofmann, Christian Holzner and Sonja Munz, “Der Entwurf des Berufsausbildungssicherungsgesetzes: Wirkungen und Nebenwirkungen”, ifo Schnelldienst 57 (9), 2004, 18-22.
  • Herbert Hofmann and Christian Holzner, “Witharbeiterkapitalbeteiligung: Ein internationaler Vergleich”, ifo Schnelldienst 55 (12), 2002, 7-13.
  • Hans-Werner Sinn, Christian Holzner, Wolfgang Meister, Wolfgang Ochel and Martin Werding, “Aktivierende Sozialhilfe: Ein Weg zu mehr Beschäftigung und Wachstum”, ifo Schnelldienst 55 (9), 2002.

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