DIW Weekly Report

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The Storm-Impervious Financial Sector: Offshore Services Likely Booked Abroad

The high international capital positions of offshore financial centers (OFCs) have led to increasing research in the area. However, many unanswered questions remain, as OFC activities are secretive by nature and data is sparse. It is, for example, not even clear whether the financial industry actually physically operates on OFCs or if it artificially books services from other countries. Using a new ...

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Reform Proposal for Marriage Taxation in Germany: De Facto Income Splitting with a Low Transferable Amount

Two traditional options for reforming Ehegattensplitting, the joint taxation of married couples with full income splitting, are de facto income splitting (Realsplitting) or individual taxation with a transferable personal allowance. However, these proposals do not significantly reduce the marginal tax burden on the secondary earner’s income and therefore only minimally encourage married women to participate ...

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Population Decline Creating Constant Pressure on Eastern German States and Municipalities on the Expenditure Side

As the German constitution aims for equal living conditions, a huge number of political measures to enhance the conditions in the new states were undertaken after unification (known as the “Aufbau Ost”). In the new states, expenditure per capita rose significantly over the average expenditure of the old states and their municipalities and huge budget deficits occurred. Beginning in the mid-1990s, expenditure ...

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Mothers in Eastern and Western Germany: Employment Rates and Attitudes Are Converging, Full-Time Employment is Not

Work and family life arrangements differed greatly between the east and west before German reunification in 1990. Since reunification, however, the employment rates of mothers with children requiring childcare have converged. This trend is accompanied by a growing approval of maternal employment, especially in western Germany. However, differences in actual working hours remain. Mothers in the east ...

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German Economy: On the Long, Slow Road to Normality: DIW Economic Outlook

The German economy has bottomed out, but its recovery is going to be long and arduous. Nevertheless, following the almost two-digit slump in economic output in the second quarter of 2020, recovery is likely to be accompanied by above-average rates. However, it is assumed that a second wave will not occur and lockdown-like measures will not be reimplemented. Private consumption in particular will markedly ...

Global Economy: Slow Recovery Following Deep Recession: DIW Economic Outlook

The coronavirus pandemic caused a global market crash in the first half of 2020. Following a massive slump of around four percent in the first quarter, global GDP decreased in the second by five percent. Lower rates of new infections, together with far-reaching monetary and fiscal policy measures to dampen the economic impact of the pandemic, ensure that production and the trust of consumers and firms ...

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LGBTQI* People on the Labor Market: Highly Educated, Frequently Discriminated Against

Societal acceptance of the LGBTQI* people has greatly improved over the past decades in Germany and legal equal treatment on the labor market has been improved by the General Equal Treatment Act (Allgemeines Gleichbehandlungsgesetz, AGG). However, about 30 percent of those who identify as LGBTQI* report experiencing discrimination in their work life, according to the results of a survey conducted by ...

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Bank Levies Can Make Bank Balance Sheets More Resilient, but High Corporate Tax Rates Dampen the Effect

Following the global financial crisis of 2008/2009, many European countries introduced bank levies to enable financial institutions to share in the costs of future banking crises via resolution and restructuring funds. Simultaneously, bank levies can set an incentive for banks to reduce their leverage, thereby achieving a more stable capital structure. Using information from banks’ balance sheets, ...

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Social Integration of Refugees Is Improving

Five years ago, almost a million people came to Germany seeking refuge. Chancellor Angela Merkel responded to public concern over such a large influx of refugees with her well-known saying, “Wir schaffen das” (We can do this!). Much has happened since then. As this report shows, the German population’s concerns over immigration have been decreasing since 2016. Nevertheless, refugees are increasingly ...

Integration of Refugee Children and Adolescents in and out of School: Evidence of Success but Still Room for Improvement

Germany has seen the arrival of a large number of displaced children and adolescents in recent years. Integration is vital for their lives today and in the future. Key indicators of successful integration are a sense of belonging to school, participation in extracurricular activities, both within school and outside it, and social contacts. The present report examines these indicators based on data ...

Refugees’ High Employment Expectations: Partially Met

This report compares employment expectations among refugees in Germany in 2016 with their actual employment situation in 2018, using the IAB-BAMF-SOEP Survey of Refugees in Germany. In 2016, the majority of refugees reported that the probability they would find employment within two years was high. Employment expectations were met by 54 percent of all refugees; yet 35 percent of refugees who articulated ...

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