Nicola Fuchs-Schündeln receives a € 1.6 million ERC Consolidator Grant

Economist examines the people’s behavior in the labor market, the impact of policy measures and identifies success factors

Why do certain groups of people behave in the labor market in their own way? How can their different success on the job market be explained? Moreover, what influence do political measures have? These are central questions of a new research project by the Frankfurt economist and Leibniz Prize winner Nicola Fuchs-Schündeln. The Consolidator Grant of the European Research Council (ERC), one of the most valuable science funding awards in the European Union, will make this project possible. It has just been announced that Fuchs-Schündeln, who is currently doing a research semester in Australia, will receive this prize. Her project is titled "Macro- and Microeconomic Analyzes of Heterogeneous Labor Market Outcomes".

Nicola Fuchs-Schündeln is Professor of Macroeconomics and Development at Goethe University since 2009. She is involved in the Cluster of Excellence "The Formation of Normative Orders" as a Principal Investigator, as well as at the LOEWE Center "Sustainable Architecture for Finance in Europe" (SAFE). In 2015/16, she was a Visiting Professor for one year at Stanford University in California. She has received her doctorate at Yale University, and then worked at Harvard University until joining Goethe University. In Cologne she had studied Latin American studies and economics.

“For the second time in a short time, I congratulate Nicola Fuchs-Schündeln for a remarkable award,” commented university President Birgitta Wolff. “After the Leibniz Prize of the Deutsche Forschungsgemeinschaft, this outstanding economist now has brought an ERC Consolidator Grant to Frankfurt which is an enormous success. It shows the great recognition that Fuchs-Schündeln also enjoys internationally. We are happy that she is with us with her innovative research approach. In her projects, she combines macro and microeconomics and directs her attention to questions that are rather unusual in economics - a great enrichment for the scientific discussion and for the Goethe University.”

Combining micro and macroeconomic methods

Like in her other focal research areas, Fuchs-Schündeln holds on to her research style in the ERC project “Macro- and Microeconomic Analyzes of Heterogeneous Labor Market Outcomes”, which combines macro and microeconomic methods. The 46-year-old academic plans four subprojects, three of them focus on different behaviors of men and women in the labor market, and the fourth on the differences between poor and rich countries. The labor market data of the Institute for Employment Research (Institut für Arbeitsmarkt- und Berufsforschung, IAB) and the Federal Statistical Office (Bundesamt für Statistik) serve as a data basis. From the anonymous social security data of employees and employers, both individual work biographies and the personnel strategy of companies can be analyzed. 

One of the subprojects will examine the question how new family policies such as the introduction of parental leave and child allowance have affected women's employment success, explains Fuchs-Schündeln. What was intended as a family- and women-friendly measure could also have had some negative consequences, because employers became more reluctant to hire and promote women. “These potential negative effects have not been analyzed so far,” the researcher says. Such findings, though, are not only interesting for Germany, because family policy measures are discussed and implemented in many countries. Another sub-project will deal with the phenomenon that a job segment with a growing proportion of women is often accompanied by a decline in the wage level. “There are various explanations for this: it could be due to a loss of prestige in the profession - but also because women place more emphasis on flexibility and greater flexibility which goes along with a lower salary,” explains Fuchs-Schündeln. Among others, data from Eastern Germany are the basis, where women have advanced more into technical professions.

Not all this will be explored by Fuchs-Schündeln alone. Several doctoral students and one postdoctoral fellow will be involved in the projects. "This is a very data-intensive research agenda," says the economist. There are candidates for this in Frankfurt, says Fuchs-Schündeln: “In the Department of Economics, we have our own Graduate School with a structured doctoral program where we train the next generation of academics. This is one of the great strengths at Goethe University.” The entire project will be funded until 2024 with a sum of 1.6 million euros.

The ERC Consolidator Grant joins a series of awards: at the beginning of 2018, Fuchs-Schündeln was honored with the Leibniz Prize, the most prestigious German research award. In 2016, Fuchs-Schündeln received the Gossen Prize from the Verein für Socialpolitik, the most important German economist prize. In 2010, she had already received a Starting Grant from the European Research Council.