Working Papers

(Dec 2015) NEW VERSION!
When firms choose staffing levels under demand uncertainty, any staffing level implies a level of expected temporarily idle labor (hoarded labor). However, hoarded labor has been difficult to measure, and we know little about its implications for corporate financial policies. This paper addresses these gaps by (i) constructing a novel firm-level measure of hoarded labor from German administrative employment data and firms’ use of short-time work, and (ii) formalizing and testing a labor-hoarding channel of risk management.

(Dec 2025) NEW VERSION!
We study a key policy lever of the short-time work (STW) scheme—extensions in the potential benefit duration (PBD)—using novel German administrative data from 2009 until 2021. Our research design, which exploits a 2012 reform that unexpectedly doubled the PBD, reveals that STW extensions in Germany did not significantly improve short- or long-term employment outcomes but points towards downward wage flexibility preventing layoffs.

The paper studies incentives for insurance sellers to ensure solvency when insurer default risk is a quality dimension of the insurance product. In a basic insurance model, I introduce insurer default risk as a quality dimension, resulting in vertical product differentiation. I show that market discipline in the choice of default risks emerges, and discuss the result in the context of over-the-counter derivatives markets.