Discussion of the paper by Andreas Kettemann (University of Zurich), Francis Kramarz (CREST, ENSAE) and Josef Zweimüller (University of Zurich)

1. Job Mobility and Creative Destruction:
Flexicurity in the Land of Schumpeter
Discussion by Jo˜ao B. Sousa
ADEMU Conference
European University Institute
November 17, 2017
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2. Theme
• Flexicurity: severance payments, occupational pensions.
• Austrian reform.
• An example for countries with low worker mobility.
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3. Contribution
1. Empirical evaluation: causal effect of policy reform on workers’
mobility in Austria
2. Theoretical evaluation: effect of policy on job-to-job transition
decisions
3. Quantitative experiment: effect of policy reform in a Southern
European country (where severance payments are high)
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4. Comment 1
Identification strategy
• Regression Discontinuity framework
• Selection of worker-firm into control/treatment groups
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5. Comment 1
Identification strategy
• Regression Discontinuity framework
• Selection of worker-firm into control/treatment groups
1. Worker characteristics - age, experience, Austrian nationality, pre-
vious wage - are similar around 2003Q1.
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6. Comment 1
Identification strategy
• Regression Discontinuity framework
• Selection of worker-firm into control/treatment groups
1. Worker characteristics - age, experience, Austrian nationality, pre-
vious wage - are similar around 2003Q1.
2. Firm characteristics - sector, location, size - are similar around
2003Q1.
• Balance sheet, sales, not available in the data.
• Average firm age before and after 2003Q1?
• Effect of policy is shown to be stronger for worker transitions into
young firms.
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7. Comment 1
Identification strategy
Source: A. Kettemann, F. Kramarz and J. Zweim¨uller (2017)
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8. Comment 2
Total Employment, % population.
Source: Eurostat. Seasonally adjusted data.
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9. Comment 3
Policy experiment
• Policy experiment: ψ > 0 → ψ = 0.
• ψ affects worker quit decisions, hence labour market flows.
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10. Comment 3
Policy experiment
t t+1
ω
ψ
0
layoff
no layoff
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11. Comment 3
Policy experiment
t t+1
ω
ψ
0
layoff
no layoff
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12. Comment 3
Policy experiment
• Policy experiment: ψ > 0 → ψ = 0.
• ψ affects worker quit decisions, hence labour market flows.
t t+1
ω
quit
stay
outside offer
π ψ+(1-π)0
V(offer)
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13. Comment 3
Austrian Policy experiment
• Policy experiment: ψ > 0 → ψ = 0 + Austrian Backpack.
• Is ψ = 0 + Austrian Backpack non-neutral?
t t+1
ω
quit
stay
outside offer
π dab+(1-π) vab
V(offer)+ vab
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