External refereed essays

Success in the University Admission Process in Germany: Regional Provenance Matters

[An erratum to this article can be found at http://dx.doi.org/10.1007/s10734-009-9271-4 ]. - School education in Germany is under the responsibility of the federal states and as a consequence average grades differ widely across regions. Since school leavers apply nationwide for admission to university, regional provenance may thus matter a lot for the success probability in the admission process. Using ...

"Making Work Pay" in a Rationed Labour Market

This paper empirically analyzes the labor supply effects of two "making work pay" reforms in Germany. We provide evidence in favor of policies that distinguish between low effort and low productivity by targeting individuals with low wages rather than those with low earnings. We discuss our results more generally and with comparisons to the family-based tax credits in force in the US and the UK. For ...

Optimal Taxation: The Design of Child-Related Cash- and In-Kind-Benefits

In this paper, we empirically derive the welfare function that guarantees that the current German tax and transfer system for single women is optimal. In particular, we compare the welfare function conditional on the presence and age of children and assess how recent reforms of in-kind childcare transfers affect the welfare function. Our analysis is based on a discrete model of optimal taxation. We ...

Optimal Income Taxation of Lone Mothers: An Empirical Comparison for Britain and Germany

Optimal tax rules are used to evaluate the optimality of taxation for lone mothers in Germany and Britain. The theoretical model is combined with elasticities derived from the structural estimation of lone mothers' labour supply. For both countries we do not find that in-work credits with marginal tax rates are optimal. However we show that when the government has a low taste for redistribution, out-of-work ...

Making Work Pay for the Elderly Unemployed: Evaluating Alternative Policy Reforms for Germany

We evaluate three policy reforms targeted at older unemployed people: (i) an hourly wage subsidy, (ii) an in-work credit, and (iii) an employment bonus in the form of subsidized social security contributions on low wages. The work-incentive, labor-supply, and welfare effects of these policy reforms are analyzed on the basis of a behavioral microsimulation model for Germany. We find that the simulated ...

What Drives Heterogeneity in Foreign Exchange Rate Expectations: Insights from a New Survey

Foreign exchange rate expectations play a central role in virtually all monetary models for the open economy. Therefore, it is extremely important to gain empirical insights into the expectations formation process. In this paper, we use a unique disaggregated data set to model the expectations of file Yen/USD exchange rate of about 50 leading foreign exchange rate professionals. The survey includes ...

Price Convergence in an Enlarged Internal Market

This paper investigates the effects of EU enlargement on price convergence. The internal market is expected to boost integration and increase efficiency and welfare through a convergence of prices in product markets. Two principal drivers are crucial to explain price developments. On one hand, higher competition exerts downward pressure on prices because of lower markups. On the other hand, the catching-up ...

A Link between Workers' Remittances and Business Cycles in Germany and Turkey

This paper examines the cyclical interactions between the remittances of Turkish workers in Germany and output in both Turkey and Germany. Our analysis introduces a new data set covering 1962 to 2004, never used before in the research literature and considered to be a more reliable source than the data sets used in other studies. By dividing the original sample into recruitment, family reunification, ...

A Dynamic Panel Data Approach to the Forecasting of GDP of German Länder

Das Sozio-oekonomische Panel (SOEP): Multidisziplinäres Haushaltspanel und Kohortenstudie für Deutschland: eine Einführung (für neue Datennutzer) mit einem Ausblick (für erfahrene Anwender)

Solidarität gesucht: Osteuropas Finanzmärkte in der globalen Finanzkrise

The global financial crisis has also hit Eastern Europe. Since the liberalisation and privatisation of the financial markets in the European Union's eastern states, the importance of the banking sector has grown, and the integration of these young financial markets in the global financial system has increased. The consequence is a greater vulnerability to crises. The new EU members cannot give sweeping ...

Money Velocity and Asset Prices in the Euro Area

Aiding Violence or Peace? The Impact of Foreign Aid on the Risk of Civil Conflict in Sub-Saharan Africa

This paper considers the impact of foreign aid flows on the risk of civil conflict. We improve on earlier studies on this topic by addressing the problem of the endogenous aid allocation using GDP levels of donor countries as instruments. A more structural addition to the literature is that we efficiently control for unobserved country specific effects in typical conflict onset and conflict continuation ...

Adult Height and Childhood Disease

Taller populations are typically richer populations, and taller individuals live longer and earn more. In consequence, adult height has recently become a focus in understanding the relationship between health and wealth. We investigate the childhood determinants of population adult height, focusing on the respective roles of income and of disease. Across a range of European countries and the United ...

Does Democracy Foster Trust?

The level of trust inherent in a society is important for a wide range of microeconomic and macroeconomic outcomes. This paper investigates how individuals' attitudes toward social and institutional trust are shaped by the political regime in which they live. The German reunification is a unique natural experiment that allows us to conduct such a study. Using data from the German General Social Survey ...

Childhood Family Structure and Schooling Outcomes: Evidence for Germany

We analyze the impact on schooling outcomes of growing up in a non-intact family in Germany. We find that this experience is associated with worse outcomes according to estimates from models that do not control for possible correlations between common unobserved determinants of family structure and educational performance. Evidence of adverse effects emerges also when endogeneity is accounted for. ...

Measuring People's Trust

We measure trust and trustworthiness in British society with a newly designed experiment using real monetary rewards and a sample of the British population. The study also asks the typical survey question that aims to measure trust, showing that it does not predict 'trust' as measured in the experiment. Overall, about 40% of people were willing to trust a stranger in our experiment, and their trust ...

On the Treatment of Non-Original Sample Members in the German Household Panel Study (SOEP)

The Preadult Origins of Post-Materialism: A Longitudinal Sibling Study

Using a research design that traces siblings' preferences for postmaterialist values in Germany over two decades, this article provides new evidence on the origins of value preferences. Focusing on Inglehart's thesis of value change, the combined socialisation and scarcity hypothesis is tested against the social learning hypothesis - a prominent rival account of preadult value preference formation. ...

Russlands Energieexporte: Potentiale, Strategien, Perspektiven

Russia's oil and natural gas exports are of great importance for Europe's energy supplies. The future extent and direction of supplies will depend on Russia's energy policy as well as its export strategies. The amount of exports mentioned in prognoses can only be achieved if energy efficiency in Russia increases, coal replaces natural gas, price controls are eliminated, and considerable investments ...