IZA Young Labor Economist Award 2008

On January 4, 2009, IZA Director Klaus F. Zimmermann presented the third IZA Young Labor Economist Award to Fabian Lange (Yale University) during an IZA reception held at the Annual Meetings of the Allied Social Science Associations (ASSA) in San Francisco. The award honors an outstanding paper published by young labor economists under the age of 40. The selection committee consisting of Zimmermann and the IZA Program Directors chose Lange's contribution on "The Speed of Employer Learning" (Journal of Labor Economics, 2007) from a large number of nominations submitted by IZA Research Fellows and Affiliates.

During the award ceremony, Zimmermann said the selected paper "demonstrates impressively how the combination of careful theoretical analysis and rigorous empirical work can provide new insights into important labor market questions." The paper proposes a model to estimate the speed at which employers learn about the actual productivity of job entrants hired on the basis of signals such as schooling. The empirical analysis suggests that employers learn fast, with initial expectation errors declining by 26% in the first year and about 50% within three years. Lange also shows that signaling accounts for less than 15% of the overall gains from an additional year of schooling.

In his acceptance speech, Fabian Lange thanked his advisors at the University of Chicago and Yale who have inspired his award-winning work. As a German scholar in the United States, he also acknowledged IZA's role as a "bridge between the European and American research communities."