Equity, Inclusion & Opportunity
Inequality creates segregation and exclusion and can lead to political radicalisation and endanger democratic institutions. It has many different causes and presents itself in many different forms. To date, particular attention has been given to inequality in income and earnings, but these are far from the only dimensions of inequality. The issues related to inequality are complex and manifold; including re-distributive institutions, the housing market, intergenerational transmission of opportunity, generational disadvantage and demographic development, and exclusion and discrimination.
Understanding Regional Inequalities: Technology, Education and Policies for Levelling Up
Regional inequalities in rich economies such as Germany are staggering. The richest county in Germany is nearly ten times as rich as the poorest county. What is more, there is surprisingly little convergence over time between regions. This is a puzzle, as theory predicts that regions initially lagging behind are bound to catch up with more developed regions, as has historically been the case in the US. We aim to study the roots of these regional disparities by tracing them back to the beginnings of technological inventions, in particular technological and educational investments during and after the Industrial Revolution as well as policy choices, past and present. Understanding the origins of regional inequalities and the reasons for their persistence is of paramount importance as they determine inequality of opportunities not only in the present, but also moving into the future. Our analysis will investigate the mechanisms behind persistence in disadvantage, thereby shedding light on policy choices conducive to overcoming historical disadvantages. This project will not only contribute to our understanding of regional inequalities in contemporary Germany but will also have important implications for policy decisions to be made during the AI revolution, with consequences for future growth and prosperity.
Hyejin Ku (University College London)
Knowledge Spillover and Individual Careers
Workers obtain skills not only through formal education and training, but also through learning by doing at the workplace. Such skill acquisition at the workplace may partly operate through learning from coworkers. However, evidence on knowledge spillover among co-workers is still inconclusive, and most existing evidence has focused on high-skilled workers. This project will produce the first study to provide direct micro-level evidence on knowledge spillover from well-trained workers (apprenticeship graduates) onto their lower skilled coworkers. The main part of the project focuses on knowledge spillover onto unskilled labour market entrants without formal qualifications, a group that is vulnerable to job loss and low labour market attachment. In an extension, the analysis will shift to other groups of workers whose skills are low or require updating, most notably immigrant workers (whose skills require adaptation to the host country labour market) or older workers (whose skills may have become obsolete due to technological change). Knowledge spillovers at the workplace have obvious important implications: in the presence of knowledge spillovers, the return to investment into training can be far larger than the sum of returns to trained workers.
Christian Dustmann (University College London)
Uta Schönberg (University College London)
Globalisation, Welfare and Economic Espionage
Economic espionage is a pervasive phenomenon around the world with potentially dramatic effects on the welfare of affected nations. In the United States and Germany alone, the economic damages caused by this illicit activity are estimated to amount to around 400 billion dollars and 100 billion euros per year respectively. Besides harming the targeted countries, economic espionage may also generate substantial benefits for the perpetrating countries. Yet, despite its economic importance and frequent appearance in current public debates, there exists hardly any quantitative evidence on the effects of economic espionage on the economy and society at large.
This project addresses various related questions on the role of economic espionage. We will investigate how and to what extent economic espionage generates tangible benefits for the perpetrating country, using unique micro-level data that provide a full account of East Germany’s spying activities in the West during the Cold War period. We will also analyse how espionage-based international knowledge flows today affect productivity growth and innovation, relating changes in measurable outcomes such as sectoral TFP to changes in the presence of a country’s own nationals in other foreign economies. Third, we will collect novel data by including a topic module on industrial espionage in a large longitudinal employer survey in Germany, allowing us to conduct a comprehensive firm-level analysis of the prevalence, perception, and impact of industrial espionage in contemporary Germany.
Adrian Lerche (Institute for Employment Research, Nuremberg)
Lukas Mergele (ifo Institute, Munich)
Erqi Ge (Sun Yat-sen University, Guangzhou)
Productivity, Skills and Competitiveness: Challenges of the Global Economy
Industrialised economies had to adjust to substantial changes in the nature of the global economy over the preceding decades as China and other middle- and lower-income economies were increasingly integrated into global trade and production networks, and as technological changes induced further changes in production patterns. This project examines important and interrelated research questions addressing both the immediate and the longer run implications of these events: First, how relevant are indirect ‘upstream’ production chain effects (in addition to the direct effects) when it comes to the impact of trade on the labour market? Second, why were some advanced economies better positioned to take advantage of this wave of increased global trade—contrast Germany which took advantage of the opportunities brought about by this second wave of globalisation with other countries like the US that were less able to do so? Third, what is the technological adoption component of globalisation, again taking into account indirect ‘upstream’ and ‘downstream’ effects of differentiated technology adoption on labour market outcomes?
Christian Dustmann (University College London)
Bernd Fitzenberger (Friedrich-Alexander-Universität Erlangen-Nürnberg and Institute for Employment Research, Nürnberg)
Alexandra Spitz-Oener (Humboldt-Universität zu Berlin)
Stan de Ruijter van Steveninck (University College London)
Jan Knuf (University College London)
Technology and Work
Most recent research on the impact of technology on the labour market focuses on automation, that is the ability of advanced technologies to substitute workers in performing routine, programmable tasks. However, the interplay between workers and technologies is much more complex. Digital tools complement the creative and analytical capabilities of workers, for example, and new tasks arise. In this project, we will shed light on the question of how workers whose jobs are subject to technology-driven adjustment shocks change the tasks they perform, paying particular attention to new tasks and tasks that are complementary to the capabilities of advanced technologies. The analyses will cover about 4 decades, from the late 1970s to the late 2010s, thereby covering the complete current phase of technological changes involving computers, software, robots, and other advances in computer technology, including artificial intelligence. The data allow to investigate how the changing capabilities of technology impact skill requirements at the workplace and, most importantly, workers’ labour market outcomes in terms of job quality, employment, and wages.
Giuseppe Pulito (ROCKWOOL Foundation Berlin)
Joonas Tuhkuri (ROCKWOOL Foundation Berlin)