Brigitte Hochmuth

Oscar-Morgenstern-Platz 11090 Wien E-Mail: brigitte.hochmuth[at]

About me

I am an Assistant Professor (non tenure track) at the University of Vienna since September 2021.

I am further affiliated with the Friedrich-Alexander University of Erlangen-Nuremberg (as Research Affiliate) and with the Institute for Advanced Studies Vienna (as Fellow).

My research interests cover the fields Macroeconomics, Labor Economics, Macro-Finance, and Applied Econometrics.

I work on the effect of labor market policies (short-time work and unemployment benefit reforms) and the interaction of credit and labor markets. I am especially interested in the role of nonlinearities and heterogeneity.

Click here for my CV. [Download].


  • March 2021:

I am very happy to announce that I will join the University of Vienna as an assistant professor in September 2021.

  • October 2020:

I am very honoured to have received the Dwyer Ramsey Prize by the Society of Nonlinear Dynamics and Econometrics (SNDE) for my job market paper "Financial Constraints, Firm Age, and the Labor Market".

  • May 2020:

Check out our new VoxEU Article on Guidelines for cost-effective use of SURE
(with Almut Balleer, Britta Gehrke and Christian Merkl).

  • March 2019:

I am happy to be part of the Organizing Comitee of the T2M 2019 in Nuremberg (click here for the program):

The 23rd Conference "Theories and Methods in Macroeconomics" (T2M) took place on March 22nd and 23nd 2019 in Nuremberg (Germany) at the Friedrich-Alexander-Universität (FAU) and the Institute for Employment Research (IAB).


Abstract: This paper proposes a new approach to evaluate the macroeconomic effects of the ‘Hartz IV’ reform, which reduced the generosity of long-term unemployment benefits. We propose a model with different unemployment durations, where the reform initiates both a partial effect and an equilibrium effect. We estimate the relative importance of these two effects and the size of the partial effect based on the IAB Job Vacancy Survey. Our approach does not hinge on an external source for the decline in the replacement rate for long-term unemployed. We find that Hartz IV was a major driver for the decline of Germany’s steady state unemployment and that partial and equilibrium effect were nearly of equal importance. In addition, we provide direct empirical evidence on labor selection, one potential dimension of recruiting intensity.

Related Policy Articles & Media Coverage: [IZA Newsroom, German version] [Makronom]

  • Counteracting Unemployment in Crises: Non-Linear Effects of Short-Time Work Policy (joint with Britta Gehrke)
    The Scandinavian Journal of Economics, Vol. 123, Issue 1, January 2021, pp, 144 - 183.

[Published Version] [IZA Discussion Paper]

Abstract: Short-time work is a labor market policy that subsidizes working time reductions among firms in financial difficulty to prevent layoffs. Many OECD countries have used this policy in the Great Recession. This paper shows that the effects of short-time work are strongly time dependent and nonlinear over the business cycle. It may save up to 0.87 jobs per short-time worker in deep economic crises. In expansions, the effects are smaller and may turn negative. We disentangle discretionary short-time work from automatic stabilization in German data using smooth transition VARs.

Related Policy Articles & Media Coverage: VoxEU Article , in German: [ifo Schnelldienst] [WirtschaftsWoche]
[Zeitschrift f. Wirtschaftspolitik]

Current Research Projects

Dwyer Ramsey Prize 2020 by the Society of Nonlinear Dynamics and Econometrics (SNDE)

Abstract: This paper shows that credit crunches cause labor market effects that are nonlinear over time and heterogeneous by firm age. During the Great Financial Crisis, a credit supply shock caused young firms to reduce employment significantly more than old firms, because the housing bust in 2006 led to a decline in young firms' housing collateral and restricted their ability to borrow. To understand the underlying mechanism, I propose a financial frictions model with an explicit firm age structure. A simultaneous credit crunch and a decline in young firms' net worth can reconcile the model with my empirical results. While old firms switch to equity financing, young firms depend on debt financing and cut labor demand. As young firms disproportionately account for aggregate job growth, my findings explain the sluggish labor market recovery after the Great Financial Crisis. A counterfactual experiment shows that absent the net worth shock, the U.S. unemployment rate would have been back to its pre-crisis level two years quicker.

Labor Market Reforms in Open Economies: The Role of Consumer Heterogeneity

(joint with Stéphane Moyen, Felix Schröter, and Nikolai Stähler).

Abstract: This paper establishes a link between labor market reforms and the increase in the reforming country's net foreign asset position via a precautionary savings channel. We propose a heterogeneous agent model of a small-open economy with labor market frictions. As a quantitative exercise, we apply our framework to evaluate the current account effects of a major German unemployment benefits reform. The reform contributed significantly to the German savings glut and the increase in net foreign assets. A reduction in the generosity of unemployment benefits increases consumption risk. As consumers aim to self-insure against this risk, they accumulate domestic and foreign assets for precautionary reasons. Compared to a closed economy framework, the reform is more detrimental to consumers' welfare in the short run, and more beneficial in the long run. This result can be explained by the missing interest rate channel in the small open economy.

Short-Run Pain and Long-Run Gain: The Dark Shadow of Benefit Reforms in a Monetary Union

(joint with Christian Merkl, Nikolai Stähler, and Heiko Stüber).

Abstract: Reduced unemployment benefits are known to increase incentives to work, but to reduce insurance. Our paper adds a macroeconomic layer to this debate. Lower benefits lead to lower unemployment in a monetary union. However, due to reduced insurance in the reforming country, precautionary savings trigger an export of savings to the non-reforming country. The ensuing lower long-run consumption in the non-reforming is the dark shadow of benefit reform in a monetary union. To quantify the effects of benefit reforms, we estimate the reaction of the tradeable and non-tradeable sector in response to the major benefit reform in Germany in 2005. Those are targeted in a monetary union model with precautionary savings motive.


I have teaching experience at the undergraduate level (exercise classes) and graduate level (specialized seminars). Here is an overview:

  • Macroeconomics, Undergraduate Level

  • International Economics, Undergraduate Level, Exercise Class

  • European Topics in Economics, Master Seminar with the European Commission

  • Empirical Applications in Financial Economics, Master Seminar

  • Large-scale Data Management, Master Seminar

  • Supervision of Bachelor and Master Theses

Short CV

Professional Experience

Since September 2021 I am an assistant professor (non tenure-track) at the University of Vienna.

Before joining the University of Vienna, I was a postdoctoral researcher at the Chair of Macroeconomics (Prof. Christian Merkl) at Friedrich-Alexander University Erlangen-Nuremberg, where I successfully defended my PhD thesis in November 2020. During my Ph.D. studies, I was teaching and research assistant at the Chair of Macroeconomics.

I have completed research visits at the IIES Stockholm, NYU Abu Dhabi, the Deutsche Bundesbank and the European Commission.

Before I started my PhD in Nuremberg, I worked as a researcher at the Institute for Advanced Studies in Vienna.


I obtained my Ph.D. at Friedrich-Alexander University Erlangen-Nuremberg. My Ph.D. advisors were Christian Merkl and Kurt Mitman.

After finishing my Bachelor's degree in Economics at the Vienna University of Economics and Business Administration (2009-2012), I did my Masters in Applied Economics at the University of Innsbruck (2012-2014).

Click here to download my detailed CV.