Publikationen der Abteilung Staat

Optimal Top Marginal Tax Rates under Income Splitting for Couples

This paper provides formulas for optimal top marginal tax rates when couples are taxed according to income splitting between spouses, consumption is taxed, and the skill distribution is unbounded. Optimal top marginal income tax rates are computed for Germany using a dataset that includes the tax returns of all German top taxpayers. We find that the optimal top marginal tax rate converges to about ...

Trust, Positive Reciprocity, and Negative Reciprocity: Do These Traits Impact Entrepreneurial Dynamics?

Experimental evidence reveals that there is a strong willingness to trust and to act in both positively and negatively reciprocal ways. So far it is rarely analyzed whether these variables of social cognition influence everyday decision making behavior. We focus on entrepreneurs who are permanently facing exchange processes in the interplay with investors, sellers, and buyers, as well as needing to ...

Do Tuition Fees Affect the Mobility of University Applicants? Evidence from a Natural Experiment

Several German states recently introduced tuition fees for university education. We investigate whether these tuition fees influence the mobility of university applicants. Based on administrative data of applicants for medical schools in Germany, we estimate the effect of tuition fees on the probability of applying for a university in the home state. We find a small but significant reaction: The probability ...

Financial Student Aid and Enrollment in Higher Education: New Evidence from Germany

Means-tested student aid might affect enrollment in higher education. To derive the potential influence of student aid, we use a tax-benefit microsimulation model. The effect is a non-linear function of parental income, with variation as a result of bracket creeping and various reforms. Therefore, the effect of student aid on enrollment can be separated from the effects of income and other family characteristics. ...

The Private Equity Premium Puzzle Revisited: New Evidence on the Role of Heterogeneous Risk Attitudes

The empirical finding that entrepreneurs invest a large share of their wealth in their own firms, despite comparably low returns and high risk, has become known as the private equity premium puzzle. This paper provides evidence supporting the hypothesis that lower risk-aversion of entrepreneurs, and thus not necessarily credit constraints, may explain this puzzle. The analysis is based on a representative ...

The Political Economy of the German Länder Deficits: Weak Governments Meet Strong Finance Ministers

We analyse the deficits of the German Länder (regional states) for the period 1960 to 2005 and test a number of hypotheses derived from the literature on the political economy of public deficits. We find evidence for the weak government hypothesis, that is, coalition governments issue significantly more debt than single party governments - a result that is typically explained by the common pool problem. ...

Expected Future Earnings, Taxation, and University Enrollment: A Microeconometric Model with Uncertainty

Taxation changes the expectations of prospective university students about their future level and uncertainty of after-tax income. To estimate the impact of taxes on university enrollment, we estimate a structural microeconometric model, in which a high-school graduate decides to enter university studies if expected lifetime utility from this choice is greater than that anticipated from starting to ...

Distributional Effects of the Child Tax Credit in Poland and Its Potential Reforms

Can Child Care Policy Encourage Employment and Fertility? Evidence from a Structural Model

We develop a structural model of female employment and fertility which accounts for intertemporal feedback effects between these two outcomes. To identify the effect of financial incentives on employment and fertility we exploit variation in the tax and transfer system, which differs by employment state and number of children. Specifically, we simulate in detail the effects of the tax and transfer ...

Preferences for Childcare Policies: Theory and Evidence

We analyse preferences for public, private or mixed provision of childcare theoretically and empirically. We model childcare as a publicly provided private good. Richer households should prefer private provision to either pure public or mixed provision. If public provision redistributes from rich to poor, the rich should favour mixed over pure public provision, but if public provision redistributes ...