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Cracks in the German Economic Miracle

The relationship between trust, cognitive abilities, and democracy. Evidence from 30 countries around the world

Beside risk preferences, willingness to trust in others is one of the key requirements in economic transactions. A growing literature in economics deals with the question what factors determine an individual’s willingness to trust. Existing results highlight a strong and robust positive correlation between measures of cognitive abilities and trust measures. However, most of the existing...

Capital Taxation and Government Debt Policy with Public Discounting

This paper characterizes capital taxation and public debt policy in a quantitative macroeconomic model with an impatient government and uncertainty. The government has access to linear taxes on capital and labor, and to non-state-contingent bonds. Government impatience generates positive and empirically realistic long-run levels of both capital taxes and public debt. Prior predictive analysis shows ...

Economic Aspects of Subjective Attitudes towards the Minimum Wage Reform

Despite some skepticism among experts about the effects of a minimum wage, there is remarkably widespread public support for such policies. Using representative survey data from 2015 and 2016, we investigate the subjective attitudes driving public support for Germany’s recent minimum wage reform. We find that socio-economic characteristics and political orientations explain a minor part of the variation ...

The Short-Run Employment Effects of the German Minimum Wage Reform

We assess the short-term employment effects of the introduction of a national statutory minimum wage in Germany in 2015. For this purpose, we exploit variation in the regional treatment intensity, assuming that the stronger a minimum wage 'bites' into the regional wage distribution, the stronger the regional labour market will be affected. In contrast to previous studies, we draw upon detailed individual ...

How far Reaches the Power of Personality? Personality Predictors of Terminal Decline in Well-Being

Personality is a powerful predictor of central life outcomes, including subjective well-being. Yet, we still know little about how personality manifests in the very last years of life when well-being typically falls rapidly. Here, we investigate whether the Big Five personality traits buffer (or magnify) terminal decline in well-being beyond and in interaction with functioning in key physical and social ...

The Short-Term Distributional Effects of the German Minimum Wage Reform

This study quantifies the short-term distributional effects of the new statutory minimum wage in Germany. Using detailed survey data (German Socio-Economic Panel), we assess changes in the distributions of hourly wages, contractual and actual working hours, and monthly earnings. Our descriptive results indicate growth at the bottom of the hourly wage distribution in the post-reform year, but also considerable ...

Environmental Factors in Frontier Estimation – a Monte Carlo Analysis

We compare three recently developed frontier estimators, namely the conditional DEA (Daraio and Simar, 2005; 2007b), the latent class SFA (Greene, 2005; Orea and Kumbhakar, 2004), and the StoNEZD approach (Johnson and Kuosmanen, 2011) by means of Monte Carlo simulation. We focus on their ability to identify production frontiers and efficiency rankings in the presence of environmental factors. Our simulations ...

DIW Women Executives Barometer 2018: the gender quota for supervisory boards is effective, development on executive boards has almost reached a standstill

DIW Berlin has analyzed the development of the proportion of women in over 500 businesses – There is no indication that the gender quota is affecting executive boards – Banks and insurance companies in particular need to catch up – Politicians and companies must work together The 30 percent gender quota for supervisory boards is effective: the proportion of women on the supervisory ...

Collusive Benchmark Rates Fixing

The fixing of the Libor and Euribor benchmark rates has proven vulnerable to manipulation. Individual rate-setters may have incentives to fraudulently distort their submissions. For the contributing banks to collectively agree on the direction in which to rig the rate, however, their interests need to be sufficiently aligned. In this paper we develop cartel theory to show how an interbank lending rates ...