Working Papers
Working Papers
Demographics, Labor Market Power and the Spatial Equilibrium
ECB Working Paper, Revise and Resubmit at American Economic Journal: Macroeconomics
This paper studies how demographics affect aggregate labor market power, the urban wage premium and the spatial concentration of population. I develop a quantitative spatial model in which labor market competitiveness depends on the demographic composition of the local workforce. Using highly disaggregated administrative data from Germany, I find that firms have more labor market power over older workers: The labor supply elasticity decreases from more than 2 to 1 from age 20 to 64. Calibrating the model with the reduced-form elasticity estimates, I find that differences in labor supply elasticities across age groups can explain 4% of the urban wage premium and 2% of the spatial concentration of population. Demographics and skill together account for 10% of the urban wage premium and 2% of agglomeration.
Non-Homothetic Housing Demand and Geographic Worker Sorting
ECB Working Paper
Housing expenditure shares decline with income. A household’s income determines its sensitivity to housing costs and drives its location decision. Has spatial skill sorting increased because low income individuals are avoiding increasingly expensive regions? I augment a standard quantitative spatial model with flexible non-homothetic preferences to estimate the effect of the national increase in the relative supply of high skilled workers that has put upward pressure on housing costs in skill-intensive cities. My model explains 10% of the increase in average house prices in Germany from 2007 to 2017 and 11% of the regional differences in house price increases. One third of the effects is due to an increase in spatial skill sorting driven by differences in housing expenditure shares. The observed degree of skill sorting was not significantly different from the optimal allocation in 2007 while skill sorting was larger than optimal in 2017.
Past and future challenges for the external competitiveness of the euro area
joint with Camilla Altieri, Virginia Di Nino, Michael Fidora, Vanessa Gunnella, Marta Salazar Rodríguez and Tobias Schuler
ECB Economic Bulletin, Issue 6, 2024
Will the euro area car sector recover?
joint with Roberto De Santis, Virginia Di Nino, Ulla Neumann and Pedro Neves
ECB Economic Bulletin, Issue 4, 2024