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The effects of public pensions on private wealth: evidence on the German savings puzzle

Based on German panel data between 1984 and 1999, we test for the interaction of social security benefits and private wealth formation. In a simple life-cylce model benefits from public pension systems should displace equal amounts of private retirement accumulation. Our estimate for the offset effect, corrected for several possible measurement biases, is much lower, however, than expected from pure ...

Utility and Happiness

A Level Playing Field – An Optimal Weighting Scheme of Dismissal Protection Characteristics

In collective redundancies, employers are forced to regard certain characteristics when deciding who to dismiss. This paper develops a procedure to derive an empirical-based weighting scheme between protection characteristics in Germany (age, disability, dependencies, and tenure). Up to now, an objective weighting scheme is missing, and employers bargain with employee's representatives about the ...

Sons' Unexpected Long Term Scarring due to Fathers' Unemployment

This study focuses on the long term effects of unemployment on subjective wellbeing in a family context for 17-24 year old sons living with at least one parent, using data from the German SOEP. As fathers enter unemployment, sons‘ subjective wellbeing is not only reduced immediately, but also 5 years into the future. As this future reduction remains unexpected by the sons, this suggests even higher ...

Unexpected Victims: How Parents’ Unemployment Affects Their Children’s Life Satisfaction

The effects of unemployment on the subjective wellbeing (SWB) of the unemployed on the unemployed are well documented. Using data from the German SOEP for 17-25 year olds living with their parents, this paper examines the additional indirect effects of parents’ unemployment on their children’s subjective wellbeing in an attempt to capture the full impact of unemployment. The reason for entry (exogenous ...

Time is Money - The Influence of Parenthood Timing on Wages

This paper studies the effect of parenthood timing on future wages. Using data from the German Socio-Economic Panel (SOEP), we employ an instrumental variable approach to identify the causal effect of delaying parenthood on wages of mothers and fathers. Consistent with previous studies, we provide evidence for a positive delaying effect on wages. We further study the underlying mechanisms of the wage ...

Sooner or Later - Economic Insecurity and the Timing of First Birth

Does economic insecurity delay fertility? Using data from the German Socio-Economic Panel (SOEP) for the years 2001-2011, the impact of economic insecurity on the timing of first birth is examined. Focusing on the timing decision within a career context, different measures of insecurity are analyzed. These include subjective and objective influences on the individual and on more aggregate levels. Results ...

Public versus Private Education with Risky Human Capital

This paper studies the long-run macroeconomic, distributional and welfare effects of tuition policy and student loans. We therefore form a rich model of risky human capital investment based on the seminal work of Heckman, Lochner and Taber (1998). We extend their original model by variable labor supply, borrowing constraints, idiosyncratic wage risk, uncertain life-span, and multiple schooling decisions. ...

Parasites and Raven Mothers: A German-Japanese Comparison on (Lone) Motherhood

Having a child out of wedlock used to be associated with shame and scorn. This is mostly not the case anymore in the western world. Therefore, freed from social sanctions, single motherhood has become an additional family-choice alternative for women, along with marriage and childlessness. Yet, the institutions that infl uence women’s decisions diff er across countries. We compare the institutional ...

The Working Hours of Immigrants in Germany: Temporary versus Permanent

Migration is often viewed as an investment decision. Temporary migrants can be expected to invest less in accumulating human capital specific to the host country. Instead, they work more hours in order to accumulate savings and invest in financial capital that can be transferred back to their country of origin upon return. In this paper, using German panel data, we explore how temporary migrants differ ...