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DIW Discussion Papers 1759 / 2018
With the increasing frequency and intensity of extreme weather events due to climate change, assessing the potential long-term effects of these events for affected households is critically important. This study analyzes to what extent a one-off extreme weather event can have persistent effects on household-level asset growth. Our focus is on the effect of a once-in-50-year winter disaster on post-shock ...
2018| Katharina Lehmann-Uschner, Kati Krähnert
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DIW Discussion Papers 1758 / 2018
The paper extends a static discrete-choice labor supply model by adding participation and hours constraints. We identify restrictions by survey information on the eligibility and search activities of individuals as well as actual and desired hours. This provides for a more robust identification of preferences and constraints. Both, preferences and restrictions are allowed to vary by and are related ...
2018| Kai-Uwe Müller, Michael Neumann, Katharina Wrohlich
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DIW Discussion Papers 1757 / 2018
Regulatory bank levies set incentives for banks to reduce leverage. At the same time, corporate income taxation makes funding through debt more attractive. In this paper, we explore how regulatory levies affect bank capital structure, depending on corporate income taxation. Based on bank balance sheet data from 2006 to 2014 for a panel of EU-banks, our analysis yields three main results: The introduction ...
2018| Franziska Bremus, Kirsten Schmidt, Lena Tonzer
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DIW Discussion Papers 1756 / 2018
Since the seminal paper of Hoffman et al. (1994), an entitlement effect is believed to exist in the Ultimatum Game, in the sense that proposers who have earned their role (as opposed to having it randomly allocated) offer a smaller share of the pie to their matched responder. The entitlement effect is at the core of experimental Public Choice – not just because it concerns the topics of bargaining ...
2018| Elif E. Demiral, Johanna Mollerstrom
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DIW Discussion Papers 1755 / 2018
This paper investigates the evolution of inflation dynamics in the five largest ASEAN countries between 1997 and 2017. To account for changes in the monetary policy frameworks since the Asian Financial Crisis (AFC), the analysis is based on country-specific Phillips Curves allowing for time-varying parameters. The paper finds evidence of a higher degree of forward-looking dynamics and a better anchoring ...
2018| Geraldine Dany-Knedlik, Juan Angel Garcia
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DIW Discussion Papers 1754 / 2018
We estimate the effect of government spending shocks on the US economy with a time-varying parameter vector autoregression. The recent Great Recession period appears to be characterized by uniquely large impulse responses of output to fiscal shocks. Moreover, the particularity of this period is underlined by highly unusual responses of several other variables. The pattern of fiscal shock responses ...
2018| Mathias Klein, Ludger Linnemann
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DIW Discussion Papers 1753 / 2018
It is well established that teachers are the most important in-school factorin determining student outcomes. However, to date there is scant robustquantitative research demonstrating that teacher training programs can havelasting impacts on student test scores. To address this gap, weconduct andevaluate a teacher peer-to-peer observation and feedback program underRandomized Control Trial (RCT) conditions. ...
2018| Richard Murphy, Felix Weinhardt, Gill Wyness
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DIW Discussion Papers 1752 / 2018
Using a laboratory experiment, we present first evidence that social image concerns causally reduce the take-up of an individually beneficial transfer. Our design manipulates the informativeness of the take-up decision by varying whether transfer eligibility is based on ability or luck, and how the transfer is financed. We find that subjects avoid the inference both of being low-skilled (ability stigma) ...
2018| Jana Friedrichsen, Tobias König, Renke Schmacker
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DIW Discussion Papers 1751 / 2018
The use of video recordings in experimental economics has become increasingly popular. However, little attention is paid to how this might affect the composition of the participating subjects and the intended treatment effect. We make a first attempt to shed light on these issues and address them in an incentivized face-to-face tax compliance experiment. The experiment contains two dimensions; i) the ...
2018| Tim Lohse, Salmai Qari
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DIW Discussion Papers 1750 / 2018
Different bootstrap methods and estimation techniques for inference for structural vector autoregressive (SVAR) models identified by conditional heteroskedasticity are reviewed and compared in a Monte Carlo study. The model is a SVAR model with generalized autoregressive conditional heteroskedastic (GARCH) innovations. The bootstrap methods considered are a wild bootstrap, a moving blocks bootstrap ...
2018| Helmut Lütkepohl, Thore Schlaak
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DIW Discussion Papers 1749 / 2018
We develop a structural vector autoregressive framework that combines external instruments and heteroskedasticity for identification of monetary policy shocks. We show that exploiting both types of information sharpens structural inference, allows testing the relevance and exogeneity condition for instruments separately using likelihood ratio tests, and facilitates the economic interpretation of the ...
2018| Thore Schlaak, Malte Rieth, Maximilian Podstawski
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DIW Discussion Papers 1748 / 2018
An interaction in a fixed effects (FE) regression is usually specified by demeaning the product term. However, this strategy does not yield a genuine within estimator. Instead, an estimator is produced that reflects unit-level differences of interacted variables whose moderators vary within units. This is desirable if the interaction of one unit-specific and one time-dependent variable is specified ...
2018| Marco Giesselmann, Alexander Schmidt-Catran
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DIW Discussion Papers 1747 / 2018
Expanding public or publicly subsidized childcare has been a top social policy priority in many industrialized countries. It is supposed to increase fertility, promote children's development and enhance mothers' labor market attachment. In this paper, we analyze the causal effect of one of the largest expansions of subsidized childcare for children up to three years among industrialized countries on ...
2018| Kai-Uwe Müller, Katharina Wrohlich
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DIW Discussion Papers 1746 / 2018
Cost of renewable energies have dropped, approaching wholesale power price levels. As a result, the role of renewable energy policy design is shifting – from covering incremental costs towards facilitating risk-hedging. An analytical model of the financing structure of renewable investment projects is developed to assess this effect und used to compare different policy design choices: contracts for ...
2018| Karsten Neuhoff, Nils May, Jörn C. Richstein
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DIW Discussion Papers 1745 / 2018
The aim of this paper is to showcase different decarbonization pathways for Germany and Europe with varying Carbon dioxide (CO2) constraints until 2050. The Global Energy System Model (GENeSYS-MOD) framework, a linear mathematical optimization model, is used to compute low-carbon scenarios for Europe as a whole, as well as for 17 European countries or regions. The sectors power, low- and high-temperature ...
2018| Karlo Hainsch, Thorsten Burandt, Claudia Kemfert, Konstantin Löffler, Pao-Yu Oei, Christian von Hirschhausen
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DIW Discussion Papers 1744 / 2018
Many important decisions within public and private organizations are based on recommendations from expert committees and advisory boards. A notable example is the U.S. Food and Drug Administration's advisory committees, which make recommendations on new drug applications. Previously the voting procedure for these committees was sequential, however, due to concerns of herding and momentum effects the ...
2018| Melissa Newham, Rune Midjord
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DIW Discussion Papers 1743 / 2018
We conduct a randomized field experiment to study the effects of two financial education interventions offered to small-scale retailers in Western Uganda. The treatments contrast “active learning” with “traditional lecturing” within standardized lesson-plans. We find that active learning has a positive and economically meaningful impact on savings and investment outcomes, in contrast to insignificant ...
2018| Tim Kaiser, Lukas Menkhoff
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DIW Discussion Papers 1742 / 2018
Several studies show that young women start with lower wage expectations than men, even before entering the labor market and that this partly translates into the actual gender wage gap through effects on educational choice and the formation of reservation wages. Building on the theoretical reasoning of compensating differentials proposing that the labor market compensates higher wage risk with higher ...
2018| Vaishali Zambre
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DIW Discussion Papers 1741 / 2018
We evaluate the labor market and distributional effects of an increase in the early retirement age (ERA) from 60 to 63 for women. We use a regression discontinuity design which exploits the immediate increase in the ERA between women born in 1951 and 1952. The analysis is based on the German micro census which includes about 370,000 households per year. We focus on heterogeneous labor market effects ...
2018| Johannes Geyer, Peter Haan, Anna Hammerschmid, Michael Peters
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DIW Discussion Papers 1740 / 2018
This paper assesses redenomination risk in the euro area. We first estimate daily default-risk-free yield curves for French, German, and Italian bonds that can be redenominated and for bonds that cannot. Then, we extract the compensation for redenomination risk from the yield spreads between these two types of bonds. Redenomination risk primarily shows up at the short end of yield curves. At the height ...
2018| Christian Bayer, Chi Hyun Kim, Alexander Kriwoluzky