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Productivity: East-West Gap Replaced by Urban-Rural Gap

In 1991, the average labor productivity of the then-new federal states (plus West Berlin) only reached nearly half of the total national productivity level. Since then, the average labor productivity of these states has climbed up to nearly 90 percent. However, the ranking of the individual states has barely changed: Hamburg and the southern German states are still at the top, while most eastern German ...

Occupational recognition of refugees: Effects on labor market outcomes, remittances, and life satisfaction (with Selina Gangl and Matthias Collischon)

Many high-income economies strive to integrate recently immigrated refugees and asylum-seekers into their labor markets. We contribute to the discussion of relevant policy tools and use rich survey data that are matched to precise administrative records on refugee immigrants to Germany. We study the impact of occupational recognition decisions on refugee outcomes. Applying a difference-in...

Timing of School Entry and Personality Traits in Adulthood

This paper investigates the long-run consequences of a later school entry for personality traits. For identification, we exploit the statutory cutoff rules for school enrollment in Germany within a regression discontinuity design. We find that relatively older school starters have persistently lower levels of neuroticism in adulthood. This effect is entirely driven by women, which has important...

Narratives on the Distributional Impact of Climate Policy Can Fuel Populism

Populist parties use narratives about social injustice to portray climate policy as elite-driven and socially unjust. This study— based on a survey experiment with some 1,600 participants— examines how three common narratives about the costs associated with climate policy affect populist and climate-populist attitudes. The results show that the narrative highlighting the disproportionate burden on ...

Aggregate Lending Standards and Inequality

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 ...

Government consumption and investment providing major boost to the German economy

German Economy Poised for Upturn Thanks to Fiscal Package; Uncertainties in the Global Economy

The German economy is slowly emerging from its trough. After a bumpy start to the year, which was marked by tariff-related special effects, growth in 2025 remains subdued at 0.2 percent. However, the economy is gradually picking up speed from the current third quarter onwards. Over the next two years, this will translate into noticeable economic growth of 1.7 and 1.8 percent annually, respectively. ...

DIW Economic Outlook Autumn 2025

German economy poised for upturn thanks to fiscal package; uncertainties in the global economy German Economy Global Economy Links and Downloads German economy emerging from economic slump; after a bumpy start to the year, things are slowly looking up; small growth of 0.2 percent expected this year Upturn imminent thanks to fiscal package for infrastructure and climate protection, higher defense spending ...

Who Pays for Climate Policy? Distributional Narratives and Populist Backlash

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 ...

The Downside of Fertility

The fertility decline is everywhere in the world today. Moreover, the decline goes decades back in the histories of rich countries. Birthrates have been below replacement in the U.S. and Europe since the mid-1970s, although further declines occurred after the Great Recession. The reasons for the declines from the 1970s to the early 2000s involve greater female autonomy and a mismatch between the...