Publications Based on SOEP Data: SOEPlit

Ex Post Inequality of Opportunity Comparisons

In this paper we propose different criteria to rank income distributions according to equality of opportunity. Different from existing ones, our criteria explicitly recognize the interplay between circumstances and effort. We characterize them axiomatically and we compare them with existing criteria; then we propose some scalar measures. We show that our ex post criteria are mostly obtained from "seemingly" ...

Social Comparison Affects Reward-Related Brain Activity in the Human Ventral Striatum (supporting online material)

Causal Returns to Education: A Survey on Empirical Evidence for Germany

Natives and Migrants in Home Production: The Case of Germany

In this paper, we assess the impact of international migration and the induced homecare service labor supply shock on fertility decisions and the labor supply of native females in Germany. Specifically, we consider the individual data of native women from the German Socio-Economic Panel and merge them with data on the share of female immigrants and other regional labor market characteristics. We provide ...

The Private Equity Premium Puzzle Revisited - New Evidence on the Role of Heterogenous 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 ...

Gender Differences in Entrepreneurial Choice and Risk Aversion: A Decomposition Based on a Microeconometric Model

Why are female entrepreneurs so rare? In Germany, women exhibit both a lower entry rate into and higher exit rate from self-employment. To explain this gender gap, this study estimates a structural microeconometric model of transition rates that includes a standard risk aversion parameter. Inputs into the model are the expected value and variance of earnings from self-employment and dependent employment, ...

Risk Attitudes and Private Business Equity

Why do people engage in entrepreneurship and commit large parts of their personal wealth to their business, despite comparably low returns and high risk? This paper connects several streams of literature to shed some light on this puzzle and suggests possible future research avenues. Key insights from the literature are that entrepreneurs may operate in imperfect financial markets and that entrepreneurs ...

Personal Bankruptcy Law, Wealth and Entrepreneurship – Theory and Evidence from the Introduction of a "Fresh Start“

A personal bankruptcy law that allows for a “fresh start” not only reduces the individual risk involved in entrepreneurship, but may also lead to higher interest rates charged by creditors. Both effects are less relevant for wealthy potential entrepreneurs. This paper illustrates these effects in a model and tests the hypotheses derived by exploiting the introduction of a “fresh start” policy in Germany ...

The returns to education for opportunity entrepreneurs, necessity entrepreneurs and paid employees

We assess the relevance of formal education on the productivity of the self-employed, distinguishing between opportunity entrepreneurs, who voluntarily pursue a business opportunity, and necessity entrepreneurs, who lack alternative employment options. We expect differences in the returns to education between these groups due to different levels of control over the use of their human capital. The analysis ...

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 ...