We exploit the natural experiment of German re-unification to address the question whether distress from social (income) comparisons results in negative attitudes towards foreigners. Our empirical approach rests upon East German individuals who have West German peers. We use the exogenous variation of wealth of West German peers shortly after the fall of the Berlin Wall as an instrument to identify ...
Cross-sectional latent class regression models, also known as switching regressions or hidden Markov models, cannot identify transitions between classes that may occur over time. This limitation can potentially be overcome when panel data are available. For such data, we develop a sequence of models that combine features of the static cross-sectional latent class (finite mixture) models with those ...
There is evidence that participation in workplace training has a positive effect on wages; however, it is unknown whether training returns differ across different types of educational attainment. This exploration is relevant because it may indicate a way to redress wage gaps in the labour market. Using the German Socio Economic Panel and the British Household Panel Survey, this paper looks at individuals ...