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Bruce Headey

Twenty-five years of SOEP: An international user's perspective

A famous physicist, began his acclaimed history of the universe with the sentence, “After the first thirty seconds all the interesting physics were over”. Just the opposite is true of SOEP and other great national socio-economic household panels. They get better with age. They exist to enable social scientists to describe and explain social and economic change, and draw out the public policy implications of change. Many public policies – for example, educational and other human capital investment policies, and policies related to retirement and pension schemes – are intended to bring about beneficial long term change. So it is essential to have panel studies which track and document long term change, including the impact of policies on change.

One of the keys to SOEP’s success has been its policy of making the data available almost free of charge to all academic users, including international users, who sign a straightforward confidentiality agreement. This policy is one of enlightened self-interest. Together with the high quality of the data, the policy has ensured that thousands of academics, world-wide, are aware of SOEP and hundreds use it for their own research; often in order to make international comparisons of social and economic change, or of public policy developments. 
I may be SOEP’s most long distance user. I am also an old-time user, having first analysed the data in 1987 in Mannheim. In 1987 SOEP was in fact directed in Frankfurt and Mannheim, DIW Berlin was the junior partner, and I remember sitting in an old University of Mannheim house on the Rhine, trying to get an old Siemens computer to analyse these new exotic panel data.

Panel data were very new to European social scientists in the 1980s, so it was comparatively easy for us come up with new and apparently astonishing findings, which contradicted the received wisdom of the time. For example, in the late 1980s there was a concern that Germany was becoming ‘a two-thirds society’; a society in which two-thirds of the population had a comfortable lifestyle, while one-third were locked into poverty or near-poverty. There was some evidence to support that viewpoint, if one used only standard cross-sectional data. But panel studies were already beginning to show that many phenomena which had previously been thought of as characteristically long term, including poverty and welfare reliance, were more often short term. So we were able to show, with very straightforward analysis, that most income poverty in Germany was short term, and that nothing like one-third of society was locked into long term poverty. This is still, although for long term unemployment raised, the case.

Such simple descriptive research remains important, especially in the policy arena. But nowadays SOEP users are able to undertake much more elaborate, probing analyses which help to explain, as well as describe, social and economic changes. These analyses have become possible for three reasons (1) the availability of long term data (2) development of improved methods of panel data analysis and (3) historical developments which have created special research opportunities.

The very major historical development, which incidentally created opportunities for SOEP users, was of course German reunification. Labour economists, using SOEP, and observing what happened to East German employees whose human capital had become partly outmoded but could be refurbished, were able to gain new insights into the relative value and durability of different qualifications and labour market skills. In a similar vein, sociologists and economists studying child development, were able to use comparisons between the very different child care systems of East and West Germany to make improved evaluations of the impact of child care on children’s later educational performance.

When SOEP began, the data were mainly of interest to economists and sociologists. Indeed, the survey was under the direction of economists and sociologists. In the last decade or so, SOEP’s range of advisers has expanded. So the survey’s coverage has expanded to take in the interests of academics from other disciplines. Psychologists make use of measures of psychological traits and subjective evaluations, demographers and students of child development use new biographical data on the life course and data from the new ‘mother and child’ questionnaires, and health researchers can use new physiological measures and measures of physical and mental functioning.

In my view, one reason SOEP has been so successful is that, throughout its history, it has remained under academic direction. In many countries panel surveys have been started under Governmental direction. These surveys have generally died an early death. They fall victim to a Government cost-cutting exercise, or get cancelled because they bring unwelcome policy news. The key advantage of a panel study under academic direction, is, or ought to be, a commitment to innovation and a capacity to react rapidly to opportunities. The bold decision to get SOEP into East Germany during the first phase of transition, conducting interviews before reunification, when the former GDR occupational and educational systems were still in place, was a superb example of a desire to innovate and a capacity to react.

History will continue to throw up opportunities. May SOEP long be around to react!

Bruce Headey, University of Melbourne/Australia
(joined the SOEP-Survey Team for nine months – October 2007 until July 2008)

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