Research

Rationality and competition: The economic performance of individuals and firms 

Funding type: DFG collaborative research center
Funding period: 2025-2028

Subproject 1 title: Family policy, gender, and redistribution: Impacts, social preferences, and design
Research team: Rajshri Jayaraman (ESMT Berlin), Emanuel Hansen (Ludwig-Maximilians-Universität Munich), Andreas Peichl (Ludwig-Maximilians-Universität Munich)

This subproject investigates three aspects of socio-economic inequality. First, it examines the evolution of economic inequality; the public’s perception of it; and the role of social norms and culture in shaping inequality. Second, it studies the effects of family policies and the tax-transfer system on individual behavior and inequality. Third, it investigates the design of policy reforms that can improve social welfare and economic efficiency.

Subproject 2 title: Assortative matching and the allocation of talent
Research team: Jan Nimczik (ESMT Berlin), Fabian Waldinger (Ludwig-Maximilians-Universität Munich)

This subproject aims to gain a nuanced understanding of talent allocation in labor markets. The pairing of workers with firms—and even with specific roles within an organization—tends to follow a pattern known as positive assortative matching. In simple terms, high-earning workers often land jobs at companies that offer the highest wages. This phenomenon plays a significant role in shaping wage inequality. The project examines how this matching process emerges and the ways in which institutions influence it.

Subproject 3 title: Assortative matching and the allocation of talent
Research team: David Ronayne (ESMT Berlin), Radosveta Ivanova-Stenzel (Technische Universität Berlin)

This subproject investigates systematic effects on market outcomes caused by limited information and biases. By understanding the transmission mechanisms of biased behavior into market outcomes, the project aims to provide informed and targeted recommendations for regulation and policy with a focus on topics relevant to modern marketplaces, including human-AI interaction, consumer search behavior, targeted advertising, and privacy protocols. 

Labour market transformation: Scarcity, mismatch, and policy

Funding type: DFG research unit
Funding period: 2025-2028
Spokesperson: Peter Haan (Freie Universität Berlin)

Subproject 1 title: Labour scarcity and the role of firms in the labour market 
Research team: Jan Nimczik (ESMT Berlin), Alexandra Spitz-Oener (Humboldt-Universität Berlin)

Subproject 2 title: Labour market regulations 
Research team: Jan Nimczik (ESMT Berlin), Christian Traxler (Hertie School of Governance)

As a result of global change processes such as digitisation, globalisation and climate change, economies worldwide are facing the challenge of changing structures in the area of labour needs. There is an increasing demand for qualifications that only a few workers and specialists currently possess. For this reason, the Research Unit Labour market transformation: Scarcity, Mismatch, and Policy examines the above-mentioned transformation processes that are causing this shift in the demand for certain skills within the labour force. It also looks at how policy can counter the mismatch between required and existing qualifications so as to reduce the shortage of skilled workers and specialists. In doing so, it focuses particularly on the areas of family and gender policy, immigration, education and pension policy, based on an international comparison. 

Long-term impact of a large-scale school feeding program on labor market outcomes: Evidence from India

Funding type: DFG research grant 
Funding period: 2025-2027
Research team: Rajshri Jayaraman (ESMT Berlin), Tanika Chakraborty (Indian Institute of Management, Calcutta)

This project examines the long-term labor market effects of India’s national school feeding program — the Midday Meal Scheme (MDM). While the short-run impacts of school feeding on child nutrition, health, and education have been extensively studied, there is limited evidence on whether these benefits persist into adulthood in the form of improved employment outcomes. This is a critical gap, particularly for low- and middle-income countries (LMICs), where such programs are widespread and labor market conditions remain precarious.

India’s MDM, the world’s largest school feeding initiative, was introduced in a staggered manner across states between 2002 and 2004. This variation generates plausibly exogenous exposure for children born between 1990 and 2000, who are now of working age. Drawing on this natural experiment, we estimate the causal impact of school feeding exposure during primary school on adult labor force participation, employment quality, and earnings.

The project focuses on three questions: (1) What is the overall effect of MDM exposure on adult labor outcomes? (2) What are the underlying mechanisms — such as human capital accumulation, occupational sorting, or shifts in marriage and family dynamics — that account for any observed effects? (3) Does MDM exposure reduce or widen existing socioeconomic disparities by gender, caste, religion, or geography?

The analysis uses nationally representative data from India’s Periodic Labour Force Survey (PLFS, 2017–2024) and National Family Health Survey (NFHS, 2015–16, 2019–21). These data permit a detailed investigation of labor market outcomes, educational attainment, health, and family structure.

The empirical strategy applies a difference-in-differences approach using the staggered rollout of MDM, supplemented with recent methodological developments that address heterogeneous treatment effects, small-cluster inference, and potential exposure misclassification due to migration.