FELIX  KOENIG     

• Reservation Wages and the Wage Flexibility Puzzle (joint with Alan Manning and Barbara Petrongolo) 

Using micro data for the UK and Germany, we provide novel evidence on the cyclical properties of reservation wages and estimate that wages and reservation wages are characterised by moderate and very similar degrees of cyclicality. Several job search models that quantitatively match the cyclicality of wages tend to overpredict the cyclicality in reservation wages. We show that this puzzle can be addressed when reservation wages display backward-looking reference dependence. Model calibrations that allow for reference dependence match the empirically observed cyclicality of wages and reservation wages for plausible value of all other model parameters.

• Labor Supply and Innovation in Entertainment: Evidence from TV  (joint with George Fenton) - R&R at the American Economic Journal: Applied Economics

Media coverage: The Guardian

We study the impact of entertainment technologies on labor supply using a natural experiment afforded by the regulated U.S. television rollout. We find that TV significantly affected retirement rates but had little impact on labor supply among prime-age workers.  A TV station launch reduced the probability of working by around 0.3 percentage points, driven mainly by increased retirement rates among older age groups. We use a representative agent model to assess the impact of entertainment innovations on aggregate labor supply trends more broadly and find that TV had a substantial impact, while subsequent technologies had small effects.

• Willingness to Pay for Workplace Amenities (joint with Massimo Anelli)

We present a new method to identify the value of workplace amenities using excess mass in the earnings distribution around budget discontinuities. The approach formalizes the intuition that workers are less responsive to financial incentives when the returns to work depend more strongly on the value of amenities. Applying the approach to the value of workplace safety, we find that workers are willing to forgo 9% of their earnings to reduce fatality risks by 1 in 100,000. We also illustrate how the approach can identify aggregate bundles of amenities linked to a job and measure the value of "enjoyable jobs."

Work in Progress

• Regulating Paid Time Off (joint with Simon Quach)

Paid time off is among the most common and most valued employment amenities. This study analyses the labor market effects of mandating paid time off. We leverage a German court ruling that mandated more time off for specific age groups in some industries. We find that the ruling significantly increased paid time off, with limited adverse effects on employment or wages. At the same time, fewer workers exit jobs with more paid time off, suggesting that the utility value of these jobs increases. The results suggest that information frictions lead to under-provision of paid time  off in the labor market and that government paid time off mandates can improve welfare.

• Labor Shortages and Firm Search (joint with Zoë Cullen and Mitchell Hoffman)

• Technical Change and Superstar Effects: Evidence from the Rollout of Television 

• Immigration and the Top 1% (joint with Arun Advani, Lorenzo Pessina, Andrew Summers)

• Can Helping the Sick Hurt the Able? Incentives, Information and Disruption in a Welfare Reform  (joint with Nitika Bagaria, Barbara Petrongolo, John van Reenen)