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DIW Discussion Papers 1193 / 2012
Empirical evidence so far found ambiguous results for the direction of effect of marginal income tax rates on employee remuneration. Based on the GSOEP data from 2002 through 2008 this study analyzes the impact of the marginal tax load on the employee side on the wage rate also allowing average tax rates and employer payroll taxes to play a role. Instrumental variable estimation based on counterfactual ...
2012| Pia Rattenhuber
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DIW Discussion Papers 1190 / 2012
Tax competition for the mobile factor capital has led to a trend in many countries to levy lower taxes on interest income, often introducing differential taxation between interest and business income. In this study, we analyze the effect of such differential taxation on the debt ratio of firms. We exploit a 2009 tax reform in Germany as a quasi-experiment, which introduced a flat final withholding ...
2012| Frank M. Fossen, Martin Simmler
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DIW Discussion Papers 1188 / 2012
The role and influence of the finance minister within the cabinet are discussed with increasing prominence in the recent theoretical literature on the political economy of budget deficits. It is generally assumed that the spending ministers can raise their reputation purely with new or more extensive expenditure programs, whereas solely the finance minister is interested to balance the budget. Using ...
2012| Beate R. Jochimsen, Sebastian Thomasius
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DIW Discussion Papers 1181 / 2012
This study uses a switching regression framework with known sample separation to analyze the effects of corporate income taxation on investment in case of binding and non-binding financial constraints. By employing two different sample splitting criteria, payout behavior and the ratio of liabilities to total assets, I show that the elasticity of capital to its user costs in an auto-distributed-lag ...
2012| Martin Simmler
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DIW Discussion Papers 1177 / 2011
Do incumbents in an election have an advantage, and if so, are these advantages heterogeneous across parties or government and opposition? We first present a theoretical discussion on the possible heterogeneity of incumbency effects in a pure two-party system. Then, we estimate the incumbency effect for the direct district candidates in German federal and state elections using a regression discontinuity ...
2011| Florian Ade, Ronny Freier, Christian Odendahl
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DIW Discussion Papers 1175 / 2011
In this paper we empirically derive the welfare effects of a shift from joint taxation with full income splitting to a revenue neutral system of individual taxation in Germany. For the empirical welfare evaluation we estimate the preference heterogeneity in the population and use normative welfare concepts proposed in Fleurbaey (2006) to solve the difficulties of comparison between, and aggregation ...
2011| André Decoster, Peter Haan
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DIW Discussion Papers 1169 / 2011
This paper presents an empirical framework for the analysis of mothers' labor supply and child care choices, explicitly taking into account access restrictions to subsidized child care. This is particularly important for countries such as Germany, where subsidized child care is rationed and private child care is only available at considerably higher cost. I use a discrete choice panel data model controlling ...
2011| Katharina Wrohlich
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DIW Discussion Papers 1167 / 2011
This paper extends the idea of using ex-ante risk measures in a model of precautionary savings by explicitly simulating future net-income risks. The uncertainty measure takes into account the interdependency of labour market status and health. The model is estimated for prime age males using the German Socio-Economic Panel Study for years 2001-2007. The empirical analysis is conducted using a measure ...
2011| Johannes Geyer
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DIW Discussion Papers 1147 / 2011
This paper provides empirical evidence on the party incumbency advantage in mayoral elections in Germany. Using a regression discontinuity design on a data set of about 25,000 elections, I estimate a causal incumbency effect of 38-40 percentage points in the probability of winning the next mayor election. The electoral advantage is larger for fulltime mayors, increasing in municipality size, independent ...
2011| Ronny Freier
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DIW Discussion Papers 1140 / 2011
How can public pension systems be reformed to ensure fiscal stability in the face of increasing life expectancy? To address this pressing open question in public finance, we estimate a life-cycle model in which the optimal employment, retirement and consumption decisions of forward-looking individuals depend, inter alia, on life expectancy and the design of the public pension system. We calculate that, ...
2011| Peter Haan, Victoria Prowse