Press Releases

Current and older Press Releases of DIW Berlin
1 ... 3 4 5 6 7 ... 15

19 June 2015

Income Inequality Virtually Unchanged since Steep Rise up until 2005

DIW Berlin’s researchers warn: employment does not necessarily prevent poverty11.5 million people in Germany are at risk of povertyone in five in eastern Germany is living below the poverty risk threshold

 Real disposable household incomes in Germany rose by an average of five percent from 2000 to 2012. At the same time, according to a study by the German Institute for Economic Research (DIW Berlin), the gap between rich and poor has grown in the past decade. Income gains are distributed very unequally between the various income groups: while the incomes of the top ten percent increased by more than 15 percent between 2000 and 2012, they remained virtually unchanged in the middle-income groups. The bottom 40 percent have up to four percent less in real terms than at the turn of the millennium. By 2005, the inequality of households’ disposable income rose considerably according to DIW Berlin’s study and since then it has remained at this level.

5 June 2015

Shutting Down the Nuclear Power Plants: Electricity Supply in Germany Remains Secure – Dismantling and Disposal Pose Major Challenges

DIW Berlin’s energy experts argue for a public-law nuclear fund – nuclear power plant operators’ provisions for dismantling and atomic waste disposal are not enough

Even by the end of 2022, after the very last German nuclear power plant has been removed from the grid, the lights in this country will not go out: The electricity supply remains secure, as DIW Berlin’s calculations attest to. “In Germany, we are already producing far more electricity than we are using,” explained Claudia Kemfert, Head of the Department of Energy, Transportation, and Environment at DIW Berlin. “The impending shutdown of the Grafenrheinfeld nuclear power plant will hardly change that. In 2025, we’ll still have enough electricity and will in fact continue to export to other countries.” Even bigger challenges lie ahead with regard to the dismantling of the nuclear power plants and the disposal of high-level radioactive waste, according to energy experts Kemfert, Christian von Hirschhausen, and Cornelia Ziehm: The provisions that have been set up by the nuclear power plant operators for these tasks, which currently amount to roughly 38 billion EUR, are not enough. Furthermore, because the provisions are not protected against insolvency and the energy companies could shirk their responsibilities through corporate restructurings, the study’s authors propose the creation of a public-law fund into which the provisions for dismantling and final disposal can be transferred. For the additional costs that are expected, the authors suggest that legislators set up a reserve liability.

20 May 2015

Mandatory Direct Marketing Raises the Financing Costs for Wind Power Projects

Plant operators must sell their electricity themselves – costs of forecast deviations and site-specific changes in revenue make wind power unnecessarily expensive

The 2014 reform of the Renewable Energy Sources Act (Erneuerbare-Energien-Gesetz, or EEG) mandates that operators of new large power plants market their electricity directly in order to create incentives for good wind forecasts and clever sales strategies. However, this also creates new risks about the level of costs caused by forecast deviation and differences in site-specific revenues. Thus mandatory direct marketing can result in an increase of financing costs—and therefore also production costs. “These additional costs must eventually be borne by electricity consumers. Hence the creation of new risks for investors should be avoided in further developments of the EEG ," said DIW energy expert Karsten Neuhoff.

13 May 2015

Tighter Capital Requirements For Investing in EU Government Bonds: Greek Banks Would Incur Problems - But Reform Would Nevertheless Be Desirable

A tightening of capital requirements for banks that invest in EU government bonds would primarily create a significant additional demand for capital for Greek banks. This is the conclusion of a study conducted by the German Institute for Economic Research (DIW Berlin), which calculated the additional capital requirements such a reform would create for German, French, Swedish, and Greek banks. As of now, financial institutions do not have to use equity capital for investments in EU government bonds, as they do in the case of investments in corporate loans. If this exemption privilege were to be abolished, as was recently proposed by the European Systemic Risk Board (ESRB), it would, according to DIW’s calculations, cost the Greek banks an additional 1.8 billion euros—about nine percent of the existing core capital requirements. In Germany, a reform of the existing regulations would be reflected in the budget with an additional 3.34 billion euros (1.8 percent of the core capital); French banks would need 3.52 billion euros of additional core capital (1.2 percent); and Swedish banks would, in fact, need only 80.6 million euros (0.14 percent). "Especially in light of the European government debt crisis, the privileging of EU government bonds over corporate loans does not make sense,“ said DIW research director Dorothea Schäfer and her co-author, Dominik Meyland. "The taxpayers could also benefit from an abolishment of the EU sovereign bonds’ privilege, as the banks themselves would then provide security against their risks to a greater extent.“ Bank risk and public debt risks would be more strongly decoupled, and the European financial system could be stabilized overall.

6 May 2015

Refurbishing Buildings for Energy Efficiency: Could an Energy Efficiency Fund Serve as a Supplementary Financing Model?

To increase the rate at which residential building undergo refurbishments for energy efficiency, innovative financial solutions also need to be considered. For example, some property owners who are currently hesitant to implement thermal retrofit might be encouraged if the investment is funded by a third party (fund) and refinanced based on the energy costs saved with the efficiency measure. Such financing options need to be examined and tested, suggests a new study conducted by the German Institute for Economic Research (DIW Berlin). "It is important to look for innovative solutions, because we are currently squandering many economic benefits through the slow progress of the implementation of energy efficiency measures," said DIW expert Karsten Neuhoff. Even though other countries’ experience with such models is still limited, "the possibility of their implementation in Germany should be thoroughly examined in light of the challenges of energy transition," said Neuhoff. But it seems clear that an energy efficiency fund can only serve as a complement to existing financing instruments, and not as a replacement. The DIW experts believe it is especially necessary to further develop the existing information and advice programs, to strengthen financial support from Kreditanstalt für Wiederaufbau (KfW), and to continue improving qualification and certification in the construction industry in order to sustainably increase the rate of refurbishment.

29 April 2015

Effects of the German G8 High School Reform: Gymnasium Students Are Graduating Younger, But More Students Are Repeating a Grade

DIW Berlin expands empirical basis of G8 impact studies – data include Gymnasium graduation cohorts from 2002 to 2013 – Abitur graduation rates are not affected

Younger Gymnasium graduates, unaffected graduation rates, but more grade repetitions: These are the findings of a recent study conducted by the German Institute for Economic Research (DIW Berlin), one of the leading economic research institutions in Germany, on the effects of the G8 high school reform, which reduced the total number of years German students spend in Gymnasium (Germany’s academic school track) by one year. According to the study, Gymnasium graduates are on average 10 months younger than they would have been prior to the reform. However, this reduction in the graduation age is less than the full 12 months by which the reform has shortened the time spent in Gymnasium. One reason for this discrepancy: More students are repeating grades, especially in the final years at Gymnasium. No significant effect of the G8 reform can be observed on the share of a cohort that graduates from Gymnasium with the Abitur (general university entrance qualification).

22 April 2015

Electric Mobility in Germany: Carbon Emissions Depend on Charging Power - Emissions Reduction Would Require Additional Expansion of Renewables

Joint press release from the German Institute for Economic Research (DIW Berlin) and the Institute for Applied Ecology (Öko-Institut)

Even if the use of electric road vehicles (EVs) were to increase significantly, the total annual power consumption of EV fleets would be small compared to overall power demand. However, uncontrolled charging, which involves the vehicle being fully recharged as quickly as possible after being connected to the power grid, could result in problematic peak loads in the system. This would not be the case with a charging mode that optimizes system costs, such that EV charging is primarily carried at night when demand is lower and at midday when solar power generation is high. The source of the additional power generated and the resultant net CO2 emissions of EVs depend on the charging mode and assumptions about the future power plant fleet. If renewable power generation capacities were to be expanded beyond current targets – enough to meet the electricity demand of EVs – this could result in a net reduction in CO2 emissions of up to 6.9 million tons per annum in 2030. These are the findings of a recent study conducted by the German Institute for Economic Research (DIW Berlin) and the Institute for Applied Ecology (Öko-Institut) as part of a European research project analyzing the impact of electric mobility on the German power system and the CO2 emissions of EVs using various scenarios. “The introduction of electric mobility would only result in a significant reduction in carbon emissions if linked to a more extensive expansion of renewable energy sources than is currently envisaged,” say the authors of the study, DIW Berlin’s Wolf-Peter Schill and the Öko-Institut’s Peter Kasten.

16 April 2015

Joint Economic Forecast Spring 2015: A Strong Upswing Thanks to Cheap Oil and a Weak Euro

The German economy is experiencing a strong upturn driven by unexpected expansive impulses, especially the falling oil price and the sharp depreciation of the euro. Gross domestic product is expected to increase by 2.1 percent this year. The 68 percent projection interval ranges from 1.1 percent to 2.8 percent. Consumption is the driving force behind the upturn. The rest of the euro area is also expected to produce slightly positive impulses, meaning that international trade will contribute to growth. The pace of growth is only expected to slow slightly in the year ahead. The euro’s depreciation will continue to stimulate the economy, while the positive effects of the lower oil price are expected to fade. Public budgets will show significant surpluses of over twenty billion euros in 2015 and 2016 respectively. In view of large structural surpluses, the time is ripe to make the income tax rate more performance-oriented – especially for small and medium-sized companies.

15 April 2015

Digitization of the Music and Film Industries: Despite Weak Sales, an Increase in New Releases - Copyright Protection Having Only a Minor Effect

Study conducted by DIW subsidiary DIW Econ examines whether copyright encourages innovation - technological development primarily responsible for the increasing number of new releases

Sales are going down, the number of new releases is going up: Although music industry revenues have plummeted by more than half since 2000, fresh content is still being released. Even in the film industry, the growth of sales and the number of new releases seem to be moving in opposite directions. Whether stricter copyright laws lead to an increase in the amount of new movie and music content being released was the subject of an analytical study conducted by Anselm Mattes and Yann Girard of DIW Econ, the consulting company of the German Institute for Economic Research (DIW Berlin), and Christian Handke of the University of Rotterdam for the Commission of Experts for Research and Innovation. The conclusion: "A clear effect was not detected. In theory, weaker copyright protection leads to a decreasing supply of creative works, but this effect is not playing out in real life - due to, among other reasons, the low costs of digital development and distribution, which means that more and more amateurs are also putting out creative content on the Internet,“ explained Mattes.

1 April 2015

Individuals in need of long-term care are heavily dependent on public transfer payments

Few assets in comparison to the rest of the population—those living alone are particularly affected

So-called “care households”—that is, households in which a person over the age of 60 and in need of long-term care resides—have similar household incomes to “non-care households,” in which no care-dependent person lives. But care-dependent individuals are more heavily dependent on public transfers; furthermore their assets are considerably less than those of individuals who do not require care. In particular, care households in which a care-dependent person lives alone have relatively meager financial resources—yet they make up over 40 percent of all care households. These are the key findings of a recent study by the German Institute for Economic Research (DIW Berlin) based on its long-term Socio-Economic Panel (SOEP) survey. "The greater reliance on public transfer payments carries risks for future generations, because the pension levels are going to decrease in the future," says DIW pension expert Johannes Geyer, who studied the income and assets situation of care-dependent individuals in private households and compared it with that of the rest of the population aged 60 and over.

25 March 2015

ECB bond-buying program is not a universal weapon against deflation — Coordinated monetary, fiscal, and structural policies are imperative

DIW Berlin examined the preconditions and probable effects of the quantitative easing in the euro area, and compared it to similar programs in other countries. The bottom line: Although there is heavy pressure on the ECB to take action, monetary policy should not remain isolated.

According to the German Institute for Economic Research (DIW Berlin), the European Central Bank’s (ECB) asset purchase program alone is not enough to avert the risk of deflation in the euro area and end the crisis. The study concluded that "there is heavy pressure on the ECB to take action. But monetary policy measures should not remain isolated. We need monetary, fiscal, and structural policies that are coordinated and aligned with sustainable growth in the entire euro area.“ To assess the chances of success of the ECB's program, DIW experts Kerstin Bernoth, Philipp König, Carolin Raab, and Marcel Fratzscher analyzed the current inflation developments, as well as some of their underlying causes in the euro area, and compared the ECB’s program with similar programs in the United States and Great Britain. Moreover, even after a detailed examination of the various transmission channels of such a measure, the precise impact of the ECB's program was, however, difficult to assess. According to the study’s authors: "With its quantitative easing, the ECB is venturing into uncharted territory."

20 March 2015

The Gender Pay Gap in leadership positions in the private sector: Women earned roughly 22 percent less than men in 2013

Although it has decreased slightly, the pay gap between women and men remains at a high level: In 2013, the gross salary of women employed full-time in leadership positions in the private sector was roughly 22 percent, or one-fifth, of the gross salary of men in such positions. In 2012, the so-called Gender Pay Gap stood at 24 percent; in 2002, it stood at 26 percent. These calculations are based on data from the long-term study conducted by the Socio-Economic Panel (SOEP) at the German Institute for Economic Research (DIW Berlin) on the occasion of Equal Pay Day on March 20. "Discrimination against women in the labor market, along with the pressures they face in terms of reconciling family obligations with their professional lives, are important reasons why the gender pay gap in our society urgently needs to be corrected,” said Elke Holst, DIW’s Research Director for Gender Studies. The pay gap between women and men employed in full-time positions stood, in terms of gross hourly earnings, at 17 percent in 2013, according to data from the Federal Statistical Office in 2013.

19 March 2015

The German economy is growing strongly — no signs of overheating

DIW economic experts are forecasting a growth of 2.2 percent in 2015, which should stand at 1.9 percent in 2016 - capacity utilization at nearly normal levels - foreign markets less important than before the crisis - primary growth driver is private consumption based on a good labor market - surpluses in public budgets remain high - international risks remain significant

The German economy, which is currently exhibiting strong growth, will continue to progress in this direction with capacity utilization at nearly full levels. The economic experts at the German Institute for Economic Research (DIW Berlin) predict that it will grow by 2.2 percent this year and by 1.9 percent year. Experts see no signs of overheating, since the important markets - such as the euro area and China - are showing only slight developments. Additionally, investments are increasing only modestly. Instead, private consumption will continue to support growth through strong income gains and favorable developments in the labor market. Despite the overall favorable outlook, there remain economic risks: For example, the financial markets could tighten significantly in response not only to a resurgence of the crisis in the euro area, but also to an intensification of the conflict in Ukraine.

4 March 2015

Power Storage Can Secure Energy Transition in the Long Term

The power-generation capacities of wind and photovoltaic plants vary according to the weather, time of day, and season. The expansion of renewable energy sources means there is a growing need to offset these fluctuations and bring power supply into line with demand at all times. Power storage can contribute to this and thus safeguard the energy transition in the longer term. An analysis conducted by the German Institute for Economic Research (DIW Berlin) shows that storage requirements may increase sharply if the share of renewables becomes very high. “Particularly if other flexibility options, for instance, concerning the demand-side, develop less favorably than anticipated, additional power storage might be necessary,” says DIW energy expert Wolf-Peter Schill. “Consequently, broad-based funding for research and development of power storage continues to be a logical course of action in order to secure the energy transition.”

18 February 2015

Tax and Transfer System: Current Redistribution Mainly through Social Insurance

The German tax and transfer system ensures that the net incomes of its citizens are distributed much more evenly than market income. Much of this redistribution takes place through the social security system. However, the majority of government benefits do not go to financially needy households. Tax expert Stefan Bach summarizes the key findings of a recent study conducted by the German Institute for Economic Research (DIW Berlin): “While income is properly redistributed in Germany, apart from basic social security, many transfers also go to middle-class or even to wealthy citizens.”

18 February 2015

Private Spending on Children’s Education: Low-Income Families Pay Relatively More

DIW study takes broader approach to expenditure on education: in addition to spending on child daycare services and schools, expenditure on non-formal educational provisions such as leisure activities is also captured – researchers recommend linking contributions to income

Families who spend money on their children’s education face a heavier financial burden, the lower their income: while the corresponding share of monthly income in the lower fifth of the income distribution is around four percent, it drops to just over three percent for higher-income families. If families spending no money on education, either because they do not use the provisions or because they are exempt from paying contributions, are also included, the share of expenditure on education, however, increases with income. These are the findings of a new study by the German Institute for Economic Research (DIW Berlin), which is based on data from the Socio-Economic Panel (SOEP) study and the SOEP-related study Families in Germany (Familien in Deutschland, FiD). According to the researchers’ calculations, each family in Germany with children under the age of 16 – including the 23 percent of families who spend no money on education – spends an average of approximately 93 euros per month on various educational provisions such as child daycare, private tuition, or leisure activities such as sports clubs or music lessons. Those families with expenditures for such provisions spend around 120 euros per month. “Families pay a considerable share of spending on education out of their own pocket. This is all the more true if the concept of education is broadly defined. The broad definition includes spending on formal educational provisions such as child daycare services and fee-paying schools and on informal and non-formal provisions such as in-home daycare providers or sports clubs and music lessons,” say the authors of the study Carsten Schröder, C. Katharina Spieß, and Johanna Storck.

11 February 2015

Judgment on Inheritance Tax by German Federal Constitutional Court: New Study by DIW Berlin Assesses Impact of Considerably Limiting Company Privileges

A study by DIW Berlin presents a reform proposal – tax breaks could be restricted, tax burdens could be paid over longer periods – inheritance tax revenue would increase considerably

After the German Federal Constitutional Court determined in December 2014 that far-reaching exemptions to inheritance tax on corporate assets are partly unconstitutional, a new study by DIW Berlin suggests restricting tax exemptions for the heirs of corporate assets. “It is questionable whether such broad exemptions are required to prevent job losses at larger companies,” said the author of the study, DIW Berlin’s tax expert, Stefan Bach. Legislators ought to place ceilings on tax benefits and restrict them on operating assets. In return, tax payments on business transfers should be stretched out over longer periods, so the company successor can pay them off with current revenues. Tax authority claims could also be linked to the economic success of a business, and other liabilities could be given priority over the tax claim. According to calculations by DIW Berlin, inheritance tax reforms could increase tax revenues in the medium term from the current five billion euros to 13 billion euros per year if tax rates would remain the same. The calculations are based on estimates of annual corporate asset transfers of between 25 and 30 billion euros.

4 February 2015

New Approaches to Power Grid Planning

Future plans to expand the German electricity transmission grid will be based on scenarios which specifically include the federal government’s climate targets for the electricity sector. These are the findings of Christian von Hirschhausen and Claudia Kemfert, energy experts at the German Institute for Economic Research (DIW Berlin), one of the leading economic research institutions in Germany, presented in the latest issue of DIW Economic Bulletin. The plans also include a lower lignite capacity than previously, which the experts see as a positive step.

30 January 2015

Women Catching Up in German Labor Market - Participation Rate Rising Faster Than That of Men

The labor force participation rate for women has increased by ten percentage points since 1995, while the corresponding figure for men has only risen by one percentage point. Reasons for this include women’s improved qualifications, which are catching up with those of men, and their greater willingness to participate in working life and take advantage of changes in the economic structure.

Women are playing an increasingly important role in the German labor market. These are the findings of a new analysis conducted by the German Institute for Economic Research (DIW Berlin). Accordingly, the participation rate for women in Germany has risen by around ten percent since 1995—while for men it has only increased by about one percentage point. In 2013, 46 percent of all workers in the country were female. However, given that more women than men continue to work part-time, their share of work volume remained lower—at around 40 percent. In 2013, almost half of working women were in part-time employment, but only one in nine working men. While women’s willingness to participate in working life has increased in the past two decades across all age groups and qualification classes, men’s propensity to work rose substantially only among those aged 55 or older. DIW’s labor market expert, Karl Brenke, noted that the increased labor force participation may have helped considerably to alleviate demographic developments.

21 January 2015

Women Executive Barometer 2015: Highest Decision-Making Bodies in German Companies Still Male-Dominated

Persistently low shares of women on executive and supervisory boards – very few companies presently meet pending compulsory gender quotas – DIW Berlin presents proposals to remedy this

In 2014, women remained the exception at the top of the corporate ladder: at barely five percent, the share of female executive board members in the top 200 companies (ranked by turnover) was up just one percentage point over the previous year. This is equivalent to 47 of a total of 877 board seats. If the figures for the top 100 only are taken into account, the share of women in top management has in fact fallen from just under five to just over four percent. These are the findings of the latest women executive barometer analysis conducted by DIW Berlin, one of the leading economic research institutions in Germany. “There has been next to no progress on the executive boards. They remain male-dominated monocultures, despite the obligation toward increasing the representation of women in senior management undertaken by the leading associations of the German business community in 2001. This is anything but a positive development,” explains Dr. Elke Holst, Research Director Gender Studies at DIW Berlin. Dr. Holst and fellow researcher Dr. Anja Kirsch from the Freie Universität in Berlin conducted a study involving over 500 corporations, banks, and insurance companies. Women are better represented on supervisory boards: here, the share of women on the supervisory boards of both the top 200 and the top 100 companies increased by around three percentage points to 18 percent in each case. The corresponding figure in the DAX 30 was almost 25 percent, which can probably be accounted for by the public discussions surrounding the introduction of gender quotas. “Nonetheless, much is yet to be done to achieve anything resembling a gender balance on corporate boards,” adds Dr. Holst. “The planned compulsory gender quota alone can’t change the world.” Besides systematic improvements in internal career opportunities for women in order to facilitate their ascent to top management positions, employment procedures, promotions, and salary structures all need to be made more transparent. Companies also need a more flexible approach to career models, working hours, and attendance policies.

1 ... 3 4 5 6 7 ... 15