Aapo Stenhammar

Assistant Professor · University of Bonn · aapo.stenhammar [at] uni-bonn.de

I am an assistant professor at the Institute for Applied Microeconomics, Department of Economics, at the University of Bonn.

I am also a research fellow at the at Labour Institute for Economic Research LABORE in Helsinki, Finland.

I received my PhD in Economics at the Aalto University and Helsinki GSE. During my PhD, I also visited UC Berkeley and the IIES at the Stockholm University.

My research focuses on the interaction of labor markets, public policy, and political responses. In my work, I also use machine learning methods to digitize archived documents and to use text and images in econometric analysis.

You can download my cv here.

Fields: Labor Economics, Economic History, Political Economy

Research

Working Papers

Tensions of Structural Change

Abstract (click to expand)

While structural transformation is vital for economic development, it often counters resistance. To shed light on the tension between the political and economic effects of structural change, I study a policy that paid farmers to stop farming in 1970s Finland. Using over 290,000 newly digitized Agricultural Census forms linked to rich register data, I find that this Field Reservation Policy led to farm closures but did not affect farmers' income or geographical mobility. However, it had an important intergenerational effect. Children of the most affected farmers had 2.7% higher earnings and were more likely to work in office and managerial positions. Surprisingly, the positive effects on income are predominantly driven by children with lower cognitive skills. Despite the economic benefits, the policy faced a political backlash, contributing to the rise of a populist rural party. I provide evidence for two separate explanations for this political reaction: identity-based backlash by offended farmers and negative externalities arising from field reservation.

Winners and Losers of Technology Grants (Recently Updated)

with Joonas Tuhkuri (Stockholm U) and Johannes Hirvonen (Northwestern).

Reject and Resubmit from the Quarterly Journal of Economics.

Abstract (click to expand)

Industrial policies are widespread, but evidence on their workforce effects remains limited. We present novel evidence on the impact of EU technology subsidies on employment and skill demand in Finnish SMEs, 1994–2018. The subsidies fund new machinery, including robots and CNC machines. Comparing closely matched grant winners and losers, we find that receiving a grant increased employment without changing skill composition. Leveraging application text data and machine learning, we match firms, analyze their plans, and show that subsidies primarily supported expansion, such as launching new products, rather than automating work. In contrast, analysis of a broader sample of manufacturing firms outside the program reveals that IT investments are more strongly associated with skill upgrading than machinery investments, suggesting that different technologies may impact jobs differently. Our findings indicate that machinery grants can create opportunities for non-college-educated workers.

Online Appendix

Work in Progress

Opening Borders: Self-Selection and Economic Outcomes of Migration During the EU Enlargement

with Matti Sarvimäki and Jaan Masso

Publications in Finnish

Yksilöllistettyä opetusta ennustavat tekijät ja suhteellisen iän vaikutus erityisopetuksessa (paper)

with Markku Jahnukainen and Mika Kortelainen