Working Papers

I study how firms’ labor hoarding, driven by their reliance on firm-specific human capital, affects their hedging of other business risks. Leveraging German administrative data on short-time work, I construct an empirical firm-level measure of hoarded labor and show that firms with more hoarded labor mitigate the resulting increase in cash flow sensitivity to demand fluctuations by reducing FX risk, a specific business risk relevant for globally exporting firms.

We analyze short-time work (STW) schemes using German administrative data from 2009 onward and focusing on two dimensions of policy variation: individual STW eligibility and extensions of potential benefit duration. Our research designs reveal that STW extensions in Germany did not significantly improve short- or long-term employment outcomes, but point 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.