Mark Partridge (p), Alexandra Tsvetkova

Duncan Roth

President Trump’s election highlights US economic disparities, especially in rural America. This study assesses 21st century economic conditions to identify broad forces underlying the uneven economic performance of US counties, stressing factors that may be important for lagging regions. We examine the effects of three groups of variables (economic, social/demographic, and geography) on job growth, poverty, and median income. To this end, we split the time period before and after the Great Recession and use standard regression analysis augmented by quantile regressions to assess the heterogeneity in economic performance. The results suggest an increasing role played by economic factors including the benefits of having a fast-growing industry structure. Perhaps more importantly, measures of economic dynamics—the ability of a local economy to “rewire” by reallocating resources in response to economic shocks—emerge as important predictors of performance.

Annekatrin Niebuhr , Cornelius Peters (p)

Mark Partridge

This paper analyses where the human capital accumulation of workers takes primarily place: within establishments or outside, elsewhere in the local labour market. It distinguishes learning effects arising at the regional level from those arising at the establishment level. Using administrative data for Germany from the Integrated Employment Biographies (IEB) of the IAB, wages of newly established employment relationships are analysed. Our results indicate that these entry wages are significantly higher the larger the local labour markets and the larger the establishments were in which work experience previously was gathered. This suggests that both - working in big cities and in large establishments - gives rise to learning and thereby to regional wage disparities since large establishments are overrepresented in urban labour markets.

Duncan Roth (p), Uwe Blien , Wolfgang Dauth

Jan Cornelius Peters

We analyze the effect that an occupation’s degree of routine intensity has on the long-term costs of job loss. To this end we identify workers who experienced displacement as a result of a mass layoff in Germany between 1980 and 2010. We use detailed information on these individuals’ employment biographies before and after the mass layoff in order to control for institutional differences as well as individual self-selection into occupations. Our results show that conditional on covariates the employment biographies of workers in occupations with a high and a low extent of routine intensity do not differ prior to the mass layoff. However, we find that after the event the negative effect on subsequent employment and earnings is significantly more severe for former employees of routine-intensive occupations. A possible explanation for this finding is that the human capital accumulated in routine-intensive occupations has become less valuable. Moreover, we show that the effect of routine-intensity varies across age, sex and qualification groups as well as with population density and time of the mass layoff.