DIW Economic Bulletin

Increased Labor Market Participation Can't Do the Job of Mastering Germany's Demographic Change in the Future

In the last decade the available labor force has expanded in Germany—despite the decline in the working-age population. The reason: labor market participation has increased, for women in particular and older people in general. Also noticeable was a rise in qualification level because well-educated people have a particularly high propensity to participate in the labor market. Most recently, Germany’s ...

Ganzes Heft

Relief for the Middle Class through Value-Added Tax Cuts: Six Questions for Stefan Bach

Value-Added Tax Cuts Bring Greatest Relief to Lower and Middle Income Households

If the desire is to provide tax relief to households with lower and middle incomes in Germany, it is necessary to target the valueadded tax rather than the personal income tax. Lowering the standard value-added tax rate by one percentage point (from 19 to 18 percent) would mean relief worth 11 billion euro for consumers. The reduced value-added tax rate of seven percent should only be cut for food ...

Ganzes Heft

The Concentration in the Investor Market Has Intensified: Eight Questions for Jo Seldeslachts

Changes in Common Ownership of German Companies

Ownership of publicly listed German companies has undergone significant changes in recent years. The aim of this report is to document these trends since 2007 and analyze the extent to which firms that compete in the same product market are owned by the same investors, which is known as common ownership. We show that some large foreign institutional investors have overtaken domestic investors and now ...

Ganzes Heft

Regular Employment Continues to Play Important Role: Interview with Peter Krause and Christian Franz

Income Groups and Types of Employment in Germany since 1995

This report examines how income groups and forms of employment in Germany have changed in the past two decades. Since the mid-1990s, inequality in disposable household income in Germany has generally increased. This trend was in effect until 2005. While fewer people had disposable incomes in the median range, the proportion of the population at both tails of the income distribution increased. At the ...

Ganzes Heft

Clean Drinking Water as a Sustainable Development Goal: Fair, Universal Access with Increasing Block Tariffs

One focus of the G20 Summit in Hamburg in July 2017 was the United Nations’ sustainable development goals, including those set for the water sector. Despite progress, around 800 million people worldwide do not have adequate access to drinking water. Increasing block tariffs are an instrument widely used to support access to drinking water for poorer segments of the population. With this system, the ...

Capital Requirements for New Government Bond Purchases Only Could Be a Reasonable Strategy: Interview with Dorothea Schäfer

Risk Weighting for Government Bonds: Challenge for Italian Banks

Although banks are required to document their equity capital for loans, corporate bonds, and other receivables, they are currently exempted from the procedure when investing in government bonds: they enjoy an “equity capital privilege.” As part of the Basel III regulatory framework redraft, the privilege may be eliminated in order to disentangle the default risks between sovereigns and banks. The present ...

Ganzes Heft

No Germany-Wide Housing Bubble but Overvaluation in Regional Markets and Segments

Although the housing prices in the 127 largest German cities have surged strongly in recent years, there is still no sign of a Germanywide housing bubble. In comparison with 2009, the price of condominiums has risen by around 55 percent. Single-family houses cost between 38 and 45 percent more in 2016 than seven years prior, and building lot prices have risen by around 63 percent. The study at hand ...

Depopulation to Affect Regional Real Estate Prices: Seven Questions for Markus M. Grabka

Real Estate Price Polarization Projected to Increase until 2030 in Germany

Demographic projections for Germany indicate a drop in the population of many regions by 2030. This is likely to have an impact on the real estate market. Our report presents the result of a model calculation of asking prices for residential real estate in Germany up to 2030 based on market data from empirica-systeme GmbH and a population projection from the Bertelsmann Foundation. Depending on the ...

Ganzes Heft

Uncertainty Remains One of the Biggest Impediments to Global Economic Development: Eight Questions for Ferdinand Fichtner