What's New at IZA

A recent IZA Discussion Paper studies ethnic discrimination in Germany's labor market with a correspondence test. To each of 528 advertisements for student internships the authors sent two similar applications, one with a Turkish-sounding and one with a German-sounding name. A German name raises the average probability of a callback by about 14 percent. Differential treatment is particularly strong and significant at smaller firms, at which the applicant with the German name receives 24 percent more callbacks. Discrimination disappears when the sample is restricted to applications including reference letters which contain favorable information about the candidate's personality. This finding is interpreted as evidence for statistical discrimination.

Leo Kaas, Christian Manger: Ethnic Discrimination in Germany's Labour Market: A Field Experiment, IZA Discussion Paper No. 4741

J. Addison

A recent book by IZA Research Fellow John T. Addison provides the first ever comprehensive economic evaluation of the long-standing German system of works councils and worker directors on company boards. This system of codetermination, or Mitbestimmung, is unique in the degree of information provision, consultation, and participation ceded employees. Addison analyzes the effects of works councils on establishment productivity, profitability, investment in physical and intangible capital, employment, training, wages and organizational flexibility, as well as the influence of worker directors on some of the same indicators plus, critically, shareholder value. Today, works councils are in decline while worker directors have scarcely been embraced either from within or without. This book examines these challenges and addresses the likely evolution of codetermination.

John T. Addison is the Hugh C. Lane Professor of Economic Theory at the University of South Carolina and Professor-at-Large at the Free University of Bolzano. An IZA Research Fellow since 2001, he has contributed nearly 50 research papers to the IZA Discussion Paper Series. His work is mainly concerned with unions and plant closings, unemployment duration analysis, employment protection, and the impact of employee involvement on firm performance.

John T. Addison: The Economics of Codetermination - Lessons from the German Experience, Palgrave Macmillan 2009. ISBN: 978-0-230-60609-8, ISBN10: 0-230-60609-1, 192 pages. [more info]

D. Cobb-Clark

IZA Research Fellow Deborah A. Cobb-Clark, a world expert on the effects of public policies on labor market outcomes, has been appointed Director of the Melbourne Institute of Applied Economic and Social Research and Ronald F. Henderson Professor at the University of Melbourne. She will take up the appointment on April 27, 2010. The Institute is responsible for running the national household panel (HILDA) and conducts extensive social policy research for the Australian government.

Affiliated with IZA for almost a decade now, Professor Cobb-Clark has been a frequent visitor to IZA over the past years. She is the former Head of the Economics Program at the Research School of Social Sciences, and inaugural Director of the Social Policy Evaluation, Analysis and Research (SPEAR) Centre at the Australian National University.

Much of her research has focused on immigration policy and its impact on the labor market outcomes of migrants. She has also examined how the receipt of income support affects young people's decisions to engage in risky behavior and the role of gender in promotions, occupational choice, and wages. She is currently leading the innovative Youth in Focus project, a longitudinal survey funded by the Australian Research Council and the Commonwealth Government.

A. Oswald

IZA Research Fellow Andrew J. Oswald (University of Warwick) has joined the board of editors of Science, the principal journal of the American Association for the Advancement of Science. Along with Ernst Fehr (University of Zurich), who is also an IZA Fellow, he is one of the few economists to have been invited to join Science's board in the journal's 130-year history. Oswald is known for his research at the borders between economics, psychology and epidemiology, while Fehr has made important contributions to behavioral and experimental economics, as well as to the emerging field of neuroeconomics.

Science and Nature are viewed as the two leading scientific journals in the world; they have print circulations of approximately 100,000 and Impact Factors of approximately 30. Science's estimated readership is one million people per week.

Both Oswald and Fehr have published recent work as IZA Discussion Papers this week:

• Andrew J. Oswald, Stephen Wu: "Objective Confirmation of Subjective Measures of Human Well-being: Evidence from the USA", IZA DP No. 4695, January 2010 (forthcoming in Science)
• Björn Bartling, Ernst Fehr, Klaus M. Schmidt: "Screening, Competition, and Job Design: Economic Origins of Good Jobs", IZA DP No. 4710, January 2010.

Marco Caliendo, Alexandre Mas

The 2009 IZA Young Labor Economist Award was awarded to Princeton University professor Alexandre Mas for his outstanding paper on "Labour Unrest and the Quality of Production: Evidence from the Construction Equipment Resale Market", (Review of Economic Studies Vol. 75 (1), 2008, 229-258). IZA Research Director Marco Caliendo presented the award to Mas during the ASSA annual meetings in Atlanta on January 4, 2010. The award reflects IZA's strong ambition to support young and aspiring academics. Mas' study "is a pioneering paper that shows how important psychological factors such as work morale may be for firms' productivity and profitability," said Caliendo in his laudation. Alexandre Mas earned his Ph.D. from Princeton University in 2004. In 2004 he joined the Haas School of Business and the Department of Economics at the University of California, Berkeley, as an Assistant Professor and became an Associate Professor in 2008. In 2009, he returned to Princeton as Professor of Economics and Public Affairs. He is currently on leave to serve as the Chief Economist of the U.S. Department of Labor.

More about the IZA Young Labor Economist Award

Katherine Terrell †

It is with the most profound sadness that we learned of the unexpected passing of IZA Research Fellow Katherine Terrell on December 29, 2009. She was an extraordinary scholar and a role model to many.

Katherine Terrell was a Professor of Business Economics and Public Policy at the Stephen M. Ross School of Business, and a Professor of Public Policy Analysis at the Gerald R. Ford School of Public Policy at the University of Michigan. She published widely in the areas of economic development and labor economics. Her research evaluated the impact of government policies and the effect of globalization on wages, employment, income inequality and firm performance in emerging market economies. She also served as a consultant to various international organizations such as the World Bank, the OECD and the EBRD. Kathy was an IZA Research Fellow for over ten years and has made immense contributions to the network. She published 19 IZA Discussion Papers and participated in numerous IZA workshops and conferences.

Those who knew her will always remember her warm personality and outstanding professional qualities. "We are completely shocked by this horrible news. Our thoughts are with her family," said IZA Director Klaus F. Zimmermann.

How immigrants and their descendants fare in the host society and in particular in the labor market is a very important question. While differences among ethnicities have been found to be marked and persistent within many host countries, and while the labor market consequences of diversity have been recognized, they have not been sufficiently examined. Edited by IZA migration experts Amelie F. Constant, Konstantinos Tatsiramos and Klaus F. Zimmermann, this volume contains fresh knowledge to help better understand the complex relationship between ethnic or minority groups, the role of ethnic identity and their disparate economic performance. Focusing on topics such as citizenship, interethnic marriages, and immigrant entrepreneurship, the book brings the role of ethnic identity in the forefront of scientific and political discussion and provides a link among these themes, anticipating new trends and directions in this area.

The Research in Labor Economics Series presents important new research in labor economics related particularly to worker well-being covering themes such as work and worker welfare, earnings distribution, skills, training, public policy, discrimination and migration. All academics and researchers in the field of labor economics are invited to submit their work for consideration in the series. Proposals for special issues (e.g. from workshops or sessions of international conferences) and symposia are also considered.

For general information on RLE submission guidelines and an online submission form see www.iza.org/rle

"IZA on Tour" in Warsaw, Nov. 10

Five years after EU enlargement, a new IZA book analyzes the consequences of east-west labor migration for the old and new EU member states. In sum, the positive effects clearly dominate. Countries that have allowed free mobility at an early stage, such as Sweden, Ireland and the United Kingdom, have benefited the most, whereas Germany is among the losers as a result of its closed-door policy. As of January 2009, Germany has tried to catch up in the competition for qualified workers by enacting the Arbeitsmigrationssteuerungsgesetz (law to control labor migration). "That's not enough," said IZA Director Klaus F. Zimmermann, who edited the new volume together with Martin Kahanec, Deputy Director of Research at IZA. "We need to send out a strong signal that qualified foreign workers, especially university graduates, are highly welcome as immigrants in Germany. Otherwise Germany will fall even further behind in the international competition for scarce human capital." A number of renowned experts have contributed country studies that cover the situation in the "old" EU member states as well the role of migration and brain drain in the accession states.

IZA on Tour:
During a book tour with stops in various European capitals and Washington, the editors presented the findings contained in the volume to a large audience of migration experts and policy makers [read more].

Martin Kahanec/Klaus F. Zimmermann (eds.), EU Labor Markets After Post-Enlargement Migration, Springer: Berlin et al. 2009, 344 pages. ISBN 978-3-642-02241-8 [order info]