External refereed essays

On the Economics of Electrical Storage for Variable Renewable Energy Sources

The use of renewable energy sources is a major strategy to mitigate climate change. Yet Sinn (2017) argues that excessive electrical storage requirements limit the further expansion of variable wind and solar energy. We question, and alter, strong implicit assumptions of Sinn’s approach and find that storage needs are considerably lower, up to two orders of magnitude. First, we move away from corner ...

Big Banks and Macroeconomic Outcomes: Theory and Cross‐Country Evidence of Granularity

Does the mere presence of big banks affect macroeconomic outcomes? We develop a theory of granularity for the banking sector by modeling heterogeneous banks charging variable markups. Using data for a large set of countries, we show that the banking sector is indeed “granular,” as the right tail of the bank size distribution follows a power law. We demonstrate empirically that the presence of big banks, ...

Does Financial Literacy Improve Financial Inclusion? Cross Country Evidence

While financial inclusion is typically addressed by improving the financial infrastructure, we show that a higher degree of financial literacy also has a clear beneficial effect. We study this effect at the cross-country level, which allows us to consider institutional variation. Regarding “access to finance”, financial infrastructure and financial literacy are mainly substitutes. However, regarding ...

‘Universal’ Early Education: Who Benefits? Patterns in Take‐up of the Entitlement to Free Early Education among Three‐Year‐Olds in England

For over a decade, all three‐year‐olds in England have been entitled to a free part‐time early education place. One aim of this policy is to close developmental gaps between higher‐income and low‐income children. However, the success of the initiative depends on children accessing the places. Using the National Pupil Database, we examine all autumn‐born four‐year‐olds attending in January 2011, and ...

The End of Cheap Labor: Are Foreign Investors Leaving China?

China's government has been promoting the shift toward a consumption-based economy in the past few years to arrive at a path of sustainable and socially inclusive growth. In this context, the explicit goal to significantly raise the percentage ofwages in the national household income was an integral part of the 12th Five-Year Plan (2011–15). These changes in economic strategy are likely to affect the ...

The Balance Sheet Effects of Oil Market Shocks: An Industry Level Analysis

The paper estimates the dynamic impact of structural oil market shocks on the balance sheet of US firms, using industry level data covering manufacturing, trade and mining sectors. For manufacturing firms, findings indicate that an unexpected disruption in oil supply that raises oil prices by 1% lowers firm profits by 1.3% on impact. On the other hand, profits rise by 0.39% in response to the same ...

The State Dependent Impact of Bank Exposure on Sovereign Risk

The theoretical literature remains inconclusive on whether changes in bank exposure to the domestic sovereign have an adverse effect on the sovereign risk position through a diabolic loop in the sovereign-bank nexus, or reduce perceived default risk by acting as a disciplinary device for the sovereign. In this paper we empirically analyze the impact of exogenous changes in bank exposure on the risk ...

Corporate Debt and Investment: A Firm-Level Analysis for Stressed Euro Area Countries

This paper investigates the link between corporate debt and investment for a group of five peripheral euro area countries. Using firm-level data from 2005 to 2014, we postulate a non-linear corporate leverage-investment relationship and derivethresholds beyond which leverage has a negative and significant impact on investment. The investment sensitivity of debt increased after 2008 when financial distress ...

Ohne Plan: Wirtschaftsentwicklung und Wirtschaftspolitik in Ungarn

School Entry, Afternoon Care, and Mothers’ Labour Supply

The availability of childcare is a crucial factor for mothers’ labour force participation. While most of the literature examines childcare for preschool children, we specifically focus on primary school-aged children, estimating the effect of formal afternoon care on maternal labour supply. To do so, we use a novel matching technique, entropy balancing, and draw on the rich and longitudinal data of ...

The Association between CVD-Related Biomarkers and Mortality in the Health and Retirement Survey

Background: It has become increasingly common in multiple purpose general population surveys to integrate different kinds of biomarker in the data collection process.Objective: In this article we test the predictive power of five different functional forms of CVD-related biomarkers for all-cause and CVD mortality in the Health and Retirement Study (HRS).Methods: We use five different functional forms ...

Successfully Striving for Happiness: Socially Engaged Pursuits Predict Increases in Life Satisfaction

Happiness is considered a highly desirable attribute, but whether or not individuals can actively steer their lives toward greater well-being is an open empirical question. In this study, respondents from a representative German sample reported, in text format, ideas for how they could improve their life satisfaction. We investigated which of these ideas predicted changes in life satisfaction 1 year ...

Occupational Segregation and the (Mis)allocation of Talent

In this paper, I study how occupational segregation affects the allocation of talent in a competitive labour market. I propose a model of occupational choice in which heterogeneous workers must rely on their social contacts to acquire job‐vacancy information. While occupational segregation implies benefits in terms of job‐finding probability, it also leads to allocative inefficiencies. Efficient and ...

Long Working Hours and Depressive Symptoms: Systematic Review and Meta-Analysis of Published Studies and Unpublished Individual Participant Data

Objectives This systematic review and meta-analysis combined published study-level data and unpublished individual-participant data with the aim of quantifying the relation between long working hours and the onset of depressive symptoms. Methods We searched PubMed and Embase for published prospective cohort studies and included available cohorts with unpublished individual-participant data. We used ...

How Do Fuel Taxes Impact New Car Purchases? an Evaluation Using French Consumer-Level Data

This study evaluates the impact of fuel taxes on new car purchases, using exhaustive individual-level data of monthly new car registrations in France. We use information on the car holder to account for heterogeneous preferences across purchasers, and we identify demand parameters through the large oil price fluctuations of this period. We find that the short-term sensitivity of demand with respect ...

Are Political Representatives More Risk-Loving Than the Electorate? Evidence from German Federal and State Parliaments

Political representatives frequently make decisions with far-reaching implications for citizens and societies. Most of these decisions are choices in situations in which the probabilities of gains and losses are hard to estimate. Although decision-making is crucial to politics, existing research has hardly ever addressed the political representation of traits that notably influence decision-making. ...

Comparing Survey Data and Administrative Records on Gross Earnings: Nonreporting, Misreporting, Interviewer Presence and Earnings Inequality

Research on earnings inequality mostly relies on survey data, but these data may not be accurate. Survey data on earnings might be biased as research indicates that some respondents are likely to avoid reporting their gross earnings and others are likely to misreport them. In addition, the mode of data collection might affect responses to sensitive questions such as those on earnings. Given these three ...

Relations among Maternal Life Satisfaction, Shared Activities, and Child Well-Being

Maternal well-being is assumed to be associated with well-being of individual family members, optimal parenting practices, and positive developmental outcomes for children. The objective of this study was to examine the interplay between maternal well-being, parent-child activities, and the well-being of 5- to 7-year-old children. In a sample of N = 291 mother-child dyads, maternal life satisfaction, ...

The Effect of Pension Reforms on Old-Age Income Inequality

Many OECD countries are raising the normal retirement age (NRA), thereby, making early retirement more costly. Whereas such reforms incentivize individuals to work longer, labor market frictions might partly undermine intended behavioral responses. Employing administrative data of West German men, I estimate a dynamic discrete choice model of work, unemployment and retirement allowing for labor market ...

Outcomes of Unemployment Episodes during Early Career for Mismatched Workers in the United Kingdom and Germany and the Mediating Effects of Education and Institutions

Our research challenges the traditional view that unemployment is an unequivocal negative event in working life. We argue that depending on workers’ educational attainment and on national-specific institutional settings unemployment might have different implications on young workers who begin their employment careers in low occupational positions. The strongly skill-based and rigid labour market in ...