Discussion Papers

Migration in an Enlarged EU: A Challenging Solution?

The 2004 and 2007 enlargements of the European Union were unprecedented in a number of economic and policy aspects. This essay provides a broad and in-depth account of the effects of the post-enlargement migration flows on the receiving as well as sending countries in three broader areas: labour markets, welfare systems, and growth and competitiveness. Our analysis of the available literature and empirical ...

Persistence and Determinants of Firm Profit in Emerging Markets

The paper studies the persistence of profit and its determinants in emerging markets. We apply Markov chain analysis, dynamic panel GMM estimation, and quantile regression techniques to a panel of approximately 3,000 Ukrainian companies. The empirical results show a moderate level of profit persistence, as well as a relatively low speed of adjustment to the steady-state profit level, thus providing ...

Convergence in Institutions and Market Outcomes: Cross-Country and Time-Series Evidence from the BEEPS Surveys in Transition Economies

This paper uses the BEEPS firm-level data to study the process of convergence of transition countries with developed market economies. The primary focus of the study is on competition and market structure, finance and the structure of lending to firms, and how firms respond to the economic environment by restructuring; we are able to do this because the BEEPS cover thousands of firms from virtually ...

Strategic Investment in International Gas-Transport Systems: A Dynamic Analysis of the Hold-up Problem

We develop a dynamic model of strategic investment in a transnational pipeline system. In the absence of international contract enforcement, countries may distort investment in order to increase their bargaining power, resulting in overinvestment in expensive and underinvestment in cheap pipelines. With repeated interaction, however, there is a potential to increase efficiency through dynamic collusion. ...

Representing GASPEC with the World Gas Model

This paper presents results of simulating a more collusive behavior of a group of natural gas producing and exporting countries, sometimes called GASPEC. We use the World Gas Model, a dynamic, strategic representation of world gas production, trade, and consumption between 2005 and 2030. In particular, we simulate a closer cooperation of the GASPEC countries when exporting pipeline gas and liquefied ...

Food Price Inflation and Children's Schooling

I analyze the impact of food price inflation on parental decisions to send their children to school. Moreover, I use the fact that food crop farmers and cotton farmers were exposed differently to that shock to estimate the income elasticity of school enrolment. The results suggest that the shock-induced loss in purchasing power had an immediate effect on enrolment rates. Instrumental variable estimates ...

Spatial Inequalities Explained: Evidence from Burkina Faso

Empirical evidence suggests that regional disparities in incomes are often very high, that these disparities do not necessarily disappear as economies grow and that these disparities are itself an important driver of growth. We use a novel approach based on multilevel modeling to decompose the sources of spatial disparities in incomes among households in Burkina Faso. We show that spatial disparities ...

To Dollarize or De-dollarize: Consequences for Monetary Policy

Gender-Specific Effects of Unemployment on Family Formation: A Cross-National Perspective

This paper investigates the impact of unemployment on the propensity to start a family. Unemployment is accompanied by bad occupational prospects and impending economic deprivation, placing the well-being of a future family at risk. I analyze unemployment at the intersection of state-dependence and the reduced opportunity costs of parenthood, distinguishing between men and women across a set of welfare ...

Climate Change and Modelling of Extreme Temperatures in Switzerland

This study models maximum temperatures in Switzerland monitored in twelve locations using the Generalised Extreme Value (GEV) distribution. The parameters of the GEV distribution are determined within a Bayesian framework. We find that the parameters of the underlying distribution underwent a substantial change in the beginning of the 1980s. This change is characterised by an increase both in the level ...

The Private Equity Premium Puzzle Revisited: New Evidence on the Role of Heterogeneous Risk Attitudes

The empirical finding that entrepreneurs tend to invest a large share of their wealth in their own firms despite comparably low returns and high risk has become known as the private equity premium puzzle. This paper provides evidence supporting the hypothesis that lower risk aversion of entrepreneurs, and not necessarily credit constraints, may explain this puzzle. The analysis is based on a large, ...

Optimal Income Taxation of Married Couples: An Empirical Analysis of Joint and Individual Taxation

In this paper we develop a discrete model of optimal taxation of married couples and empirically discuss the optimality of income taxation for this group. To this end, we derive the social welfare function which guarantees that joint taxation of married couples is optimal. We will contrast this welfare function with the one that makes a system of individual taxation optimal. For the empirical application ...

Is Being 'Soft on Crime' the Solution to Rising Crime Rates? Evidence from Germany

Based on a theoretical framework on informal, custodial and non-custodial sentencing, the paper provides econometric tests on the effectiveness of police, public prosecution and courts. Using a unique dataset covering German states for the period 1977- 2001, a comprehensive system of criminal prosecution indicators is derived and subsequently related to the incidence of six major offence categories ...

The Returns to Cognitive Abilities and Personality Traits in Germany

We provide the first joint evidence on the relationship between individuals' cognitive abilities, their personality and earnings for Germany. Using data from the German Socio-Economic Panel Study, we employ scores from an ultra-short IQ-test and a set of measures of personality traits, namely locus of control, reciprocity and all basic items from the Five Factor Personality Inventory. Our estimates ...

Das enttäuschte Versprechen der Integration: Migrantennachkommen in Frankreich und Deutschland

Dieser Beitrag beschäftigt sich mit den sozialstrukturellen Voraussetzungen, die der Dynamik bzw. dem Ausbleiben von Protestverhalten zu Grunde liegen. Ausgehend von drei theoretischen Erklärungsansätzen wird empirisch anhand von repräsentativen Mikrodaten gezeigt, dass die Konzeption der Integration der Migrantennachkommen durch die Staatsbürgerschaft und die Schule in Frankreich als ein Versprechen ...

Capital Accumulation, Labour Market Institutions, and Unemployment in the Medium Run

According to the mainstream view, labour market institutions (LMI) are the key determinants of unemployment in the medium run. The actual empirical explanatory power of measures for labour market institutions, however, has been called into question recently (Baker et al 2005, Baccaro and Rei 2007). The Keynesian view holds periods of high real interest rates and insufficient capital accumulation responsible ...

Determinants of Integration and Its Impact on the Economic Success of Immigrants: A Case Study of the Turkish Community in Berlin

Using a new data on 590 Turkish households in Berlin, we investigate the determinants and impact of integration on economic performance. We find that usual suspects such as time spent in Germany and education have positive impact, while networks have no impact on integration. There is strong evidence that political integration and the degree of full integration promote income. Using endogenous switching ...

Potential Gains from Mergers in Local Public Transport: An Efficiency Analysis Applied to Germany

We analyze potential gains from hypothetical mergers in local public transport using the non-parametric Data Envelopment Analysis with bias corrections by means of bootstrapping. Our sample consists of 41 public transport companies from Germany's most densely populated region, North Rhine-Westphalia. We merge them into geographically meaningful, larger units that operate partially on a joint tram network. ...

Next Stop: Restructuring? A Nonparametric Efficiency Analysis of German Public Transport Companies

In this paper, we present a nonparametric comparative efficiency analysis of 179 communal public transport bus companies in Germany (1990-2004). We apply both deterministic data envelopment analysis (DEA) and bootstrapping to test the robustness of our estimates and to test the hypothesis of global and individual constant returns to scale. We find that the average technical efficiency of German bus ...

International Benchmarking in Electricity Distribution: A Comparison of French and German Utilities

In this paper we present an international cross-country benchmarking analysis for utility regulation of France and Germany, the two largest electricity distribution countries in Europe. We examine the relative performance of 99 French and 77 German distribution companies operating within two different market structures. This paper applies several parametric benchmarking approaches to assess the relative ...