Wednesday, 22 September, 2021 | 13:30 | Defense - PhD

Jakub Grossmann: "Essays on Local Labor Markets"

Defense Committee:
Mariola Pytliková (chair)
Vasily Korovkin
Michal Franta (Czech National Bank)

Tor Eriksson (Aarhus University)
Kamil Galuščák (Czech National Bank)

Dissertation Committee:
Štěpán Jurajda (chair)
Christian Ochsner
Filip Pertold
Nikolas Mittag
Daniel Münich
Filer Randall (The City University of New York)


This thesis studies local labor markets affected by policy reforms, and shocks to health and migration. The effects studied in the three essays operate locally and are important for workers' labor-market outcomes, for family health members, and for long-term identity of local communities. The thesis contributes to existing empirical research by proposing new identification approaches and using new sources of variation. The essays quantify policy effects, some of them multigenerational, and ask about the underlying mechanisms behind the estimated effects. Each chapter focuses on a specific topic related to local labor markets or local communities in the Czech Republic.

In the first paper, I study the employment effects of four minimum wage increases implemented in the Czech Republic during 2012-2017, which cumulatively increased the national minimum wage by 37 percent. I analyze outcomes at the level of firm-occupation-county-specific job cells and apply an intensity-treatment estimator similar to that of Machin et al. (2003). My preferred specifications suggest that minimum wage increases led to higher wages for low-paid workers and did not have significant impacts on their rates of employment.

The second paper argues that a system of sick-pay is critical for balancing the economic and health costs of infectious diseases. Surprisingly, most research on sick-pay reforms does not rely on variation in worker exposure to diseases when investigating absences from work. This paper studies the effects on work absences of changes in health-insurance coverage for the first three days of sickness. I explore geographic variations in the prevalence of infectious diseases, primarily the seasonal flu, to identify variations in the need for sickness insurance. Estimates based on the Czech Structure of Earnings Survey imply that when sickness insurance is not available, total hours of work missed are not affected, but employees rely on paid and unpaid leave instead of sick-leave. The substitution effects are heterogenous across occupations and socio-demographic characteristics of employees, and suggest that workers do not spread infectious diseases at their workplaces as a result of a lack of sickness insurance coverage in the first three days of an illness.

In the third paper we study how staying minorities who evaded ethnic cleansing integrate into re-settled communities. After World War Two, three million ethnic Germans were expelled from Czechoslovakia's Sudetenland, but some were allowed to stay, many of whom were left-leaning anti-fascists. We study quasiexperimental local variation in the number of anti-fascist Germans staying in post-war Czechoslovakia and find a long-lasting footprint: Communist party support, party cell frequencies, and far-left values and social policies are more prevalent today in locations where anti-fascist Germans stayed in larger numbers. Our findings also suggest that political identity supplanted German ethnic identity among stayers who faced new local ethnic majorities.  

Full Text: "Essays on Local Labor Markets"