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DIW Discussion Papers 2157 / 2026
In 2001, Germany abolished public occupational disability insurance (ODI)—the second tier of its public DI system—for cohorts born after 1960. Using administrative data, we first document that, in the long run, overall DI inflows declined by roughly one-third. Second, using representative survey data, we document at best modest ODI insurance take-up responses in the private individual, risk-rated market, ...
2026| Yaming Cao, Björn Fischer-Weckemann, Johannes Geyer, Nicolas Ziebarth
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DIW Discussion Papers 2156 / 2026
Locational marginal pricing (LMP) provides efficient locational dispatch and investment signals but requires a complementary congestion hedging instrument to function effectively. This paper investigates how exposure to locational price differences is managed in North American nodal electricity markets through the implementation of financial transmission rights (FTRs). Drawing on insights from 15 industry ...
2026| Leon Stolle, Jonas Boeschemeier, Benjamin F. Hobbs, Karsten Neuhoff
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DIW Discussion Papers 2155 / 2026
In structural vector autoregressive analysis it has become quite popular to identify some structural shocks of interest by external instruments or proxies. This study points out a range of areas where such proxies have been used and sketches the way the proxies have been constructed. It reviews identification and estimation methods that have been considered in this context. Moreover, it points out ...
2026| Martin Bruns, Helmut Lütkepohl
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DIW Discussion Papers 2154 / 2026
This paper examines the “right” geographic definition of relevant markets by analyzing how excise tax pass-through varies with local competition in the retail gasoline market of a large metropolitan city. Using a natural experiment from three unanticipated and exogenous fuel tax hikes and detailed station-level price data, we show that average pass-through is invariant to the number of nearby competitors ...
2026| Christos Genakos, Themistoklis Kampouris
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DIW Discussion Papers 2153 / 2026
The Net Zero Industry Act (NZIA) promotes non-price criteria in renewable auctions. It aims to unlock green willingness-to-pay and scale up manufacturing capacity for net-zero technologies in the European Union (EU). This paper builds a partial equilibrium model of the European solar module sector and investigates how renewable auction design impacts solar photo- voltaic (PV) manufacturing. First, ...
2026| Thibault Deletombe
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DIW Discussion Papers 2152 / 2026
This paper studies how and why anti-Irish sentiment in 19th century England spills over onto jury decisions at London’s Old Bailey Central Criminal Court. We classify the (perceived) ethnicity of courtroom participants according to whether they have distinctly Irish or English surnames based on place of birth in the 1881 census. Irish-named defendants have significantly worse outcomes: juries are 3% ...
2026| Anna Bindler, Randi Hjalmarsson, Stephen Machin, Melissa Rubio-Ramos
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DIW Discussion Papers 2151 / 2026
We propose a new approach to estimate selection-corrected quantiles of the gender wage gap. Our method employs instrumental variables that explain variation in the latent variable but, conditional on the latent process, do not directly affect selection. We provide semiparametric identification of the quantile parameters without imposing parametric restrictions on the selection probability, derive the ...
2026| Egshiglen Batbayar, Christoph Breunig, Peter Haan, Boryana Ilieva
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DIW Discussion Papers 2150 / 2025
This paper constructs homogeneous time series of global household offshore wealth covering the 2001–2023 period, during which major international efforts were implemented to curb offshore tax evasion. We find that: (i) global offshore wealth remained broadly stable as a fraction of global GDP since 2001, following a sharp increase in the 1980s and 1990s; (ii) the location of offshore wealth changed ...
2025| Souleymane Faye, Sarah Godar, Carolina Moura, Gabriel Zucman
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DIW Discussion Papers 2149 / 2025
How do shifts in the global balance of power shape the world economy? We propose a theory of alignment-based “hegemonic globalization,” built on two central premises: countries differ in their preferences over policies (such as the rule of law or regulatory frameworks) and trade between any two countries increases with the degree of alignment in these policies. Hegemons promote policy alignment and ...
2025| Fernando Broner, Alberto Martin, Josefin Meyer, Christoph Trebesch
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DIW Discussion Papers 2148 / 2025
Do trade dependencies leave countries vulnerable to geopolitical coercion? We study the economic costs of trade and financial sanctions, from 1920 to the present. We first develop a continuous measure of sanction intensity, using bilateral commodity-level data to calculate the importance of specific flows that fall under sanctions. We find that sanctions inflict relatively small costs on average: sanctioning ...
2025| Martin Bernstein, Josefin Meyer, Kevin O’Rourke, Moritz Schularick
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DIW Discussion Papers 2147 / 2025
Between 1950 and 2023, the housing cost burden — approximated by the proportion of total household consumption expenditure spent on housing, water, electricity and fuel — has risen almost steadily in many countries around the world. First, this trend can be explained by substantial improvements in the quantity and quality of housing. In fact, in some countries (e.g., Germany), per capita floor space ...
2025| Konstantin A. Kholodilin
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DIW Discussion Papers 2146 / 2025
We replicate a study by Känzig (American Economic Review, 111 (2021), 1092-1125), who employs structural vector autoregressive techniques to examine the impact of changes in oil supply expectations on the price of oil and other macroeconomic aggregates. Känzig identifies an oil supply news shock by constructing a proxy from OPEC announcements about their production plans. As this proxy is a controversial ...
2025| Helmut Lütkepohl, Till Strohsal
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DIW Discussion Papers 2145 / 2025
Trade conflicts, geopolitical tensions, digital disruption, and the climate crisis pose major challenges for the European Union (EU) and its member states. As called for in the Draghi Report, industrial policy measures can increase competitiveness, strengthen resilience, and facilitate the twin transformation. This article explores ways in which competition policy can be realigned to better accommodate ...
2025| Tomaso Duso, Martin Peitz
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DIW Discussion Papers 2144 / 2025
This paper studies the labor market impact of structural change by distinguishing between industry- and occupation-based measures of manufacturing and service employment. Using German data from 1975–2019, we find that 67% of manufacturing jobs lost in manufacturing industries are offset by new manufacturing jobs in service industries. Linking these aggregate patterns to worker-level outcomes, we show ...
2025| Dominik Boddin, Thilo Kroeger
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DIW Discussion Papers 2143 / 2025
We study how rent control and housing rationing shape housing investment and market tightness in Geneva using a VAR on annual data (1994–2022) with generalized impulse responses and Granger causality. We find that housing rationing functions as a binding quantity restriction as it precedes a contraction in new institutional construction and Granger-causes lower vacancy rates. This increased scarcity ...
2025| Kristyna Ters, Konstantin A. Kholodilin
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DIW Discussion Papers 2142 / 2025
Despite substantial research on job satisfaction in self-employment, we know little about the specific consequences for the venture when job satisfaction declines after an external shock. Taking the COVID-19 pandemic as an example of an external shock and drawing on a sample of nearly 7,000 self-employed individuals living in Germany, we investigate how declines in job satisfaction are related to investment ...
2025| Joern Block, Miriam Gnad, Alexander S. Kritikos, Caroline Stiel
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DIW Discussion Papers 2141 / 2025
I study the transmission mechanism of Quantitative Easing (QE) in the form of large-scale asset purchases in the mortgage market to aggregate consumption. To this end, I develop a New Keynesian model that features heterogeneous households, a microfounded housing market, and frictional intermediation. This model helps explain the empirical evidence suggesting that QE increases aggregate consumption ...
2025| Hannah Magdalena Seidl
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DIW Discussion Papers 2140 / 2025
We study the effects of movements in aggregate lending standards on macroeconomic aggregates and inequality. We show in a New Keynesian model with heterogeneous households and housing that a looser loan-to-value (LTV) ratio stimulates housing demand, nondurable consumption, and output. Our model implies that the LTV shock transmits to macroeconomic aggregates through higher household liquidity and ...
2025| Vanessa Schmidt, Hannah Magdalena Seidl
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DIW Discussion Papers 2139 / 2025
Populist parties increasingly deploy narratives of social injustice to portray climate policy as elitist and unfair. This paper investigates how such narratives affect public attitudes toward populism and democratic institutions. We conduct a survey experiment with approximately 1,600 respondents in Germany, exposing participants to three common narratives about the distributional costs of climate ...
2025| Matilda Gettins, Lorenz Meister
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DIW Discussion Papers 2138 / 2025
Stock market participation among working household heads jumped upwards in 2020 – in Germany by about 25%. A major cause is the required use of work from home (WfH). We show this by adding WfH to a large set of explanatory variables. Moreover, we implement an instrumental variables estimation based on industry-specific levels of WfH-capacity. The transmission channels seem to work via increased available ...
2025| Lorenz Meister, Lukas Menkhoff, Carsten Schröder