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Discussion Paper: The Bitter Taste of Unemployment - Evidence from Plant Closures and Layoffs

The new discussion paper "The Bitter Taste of Unemployment - Evidence from Plant Closures and Layoffs" by Max Steinhardt and Christopher Prömel is now available.  Abstract This study examines the effects of unemployment on bitterness, which describes a feeling of not having achieved what one deserves compared to others. Pooled OLS and fixed effects estimates reveal a positive association between unemployment and bitterness. To identify the causal effect of unemployment on bitterness, we exploit variation from plant closures and layoffs in Germany, combining entropy balancing with difference-in-differences estimation. We find that unemployment leads to a substantial and significant increase in bitterness of nearly half a point on the 1-7 point Likert scale. We demonstrate the robustness of our findings and that both the experience of job loss and the state of being unemployed contribute separately to a significant increase in bitterness, with longer unemployment duration resulting in higher levels of bitterness. Lastly, we evaluate the persistence of our effects, finding significant long-term effects for those who remain unemployed for over one year. Link to the discussion paper

Aug 27, 2025 | Economics

Language proficiency and homeownership: Evidence from U.S. immigrants

The joint work of Marc-André Luik, Max Steinh ardt, and Simon Voss , " Language proficiency and homeownership: Evidence from U.S. immigrants " is now available in the Journal of Housing Economics. Abstract: In this paper, we deliver the first causal evidence on the relationship between immigrant host-country language proficiency and homeownership. Using an instrumental variable strategy, we find a substantial positive impact of language skills on the propensity to own a home and the quality of housing among immigrants in the United States. While this effect is mediated by household income, our estimates also speak in favor of a direct language effect. Suggestive evidence further indicates that part of this effect may be driven by discrimination. Our results highlight the importance of host-country-specific human capital and, in particular, language proficiency for socio-economic assimilation in housing markets. Link to the paper

Aug 13, 2025 | Economics