External refereed essays

Human Capital Externalities: Evidence from the Transition Economy of Russia

The paper tests for the existence of human capital externalities using a micro-level approach: the Mincerian wage regression augmented with the average level of education in cities. To solve identification problems arising from the endogeneity of average education, the study exploits a natural experiment provided by the process of economic transition: average education at the end of communism can be ...

Political Patronage in Ukrainian Banking

This paper empirically investigates the link between political patronage and bank performance for Ukraine during 2003Q3-2005Q2. We find significant differences between politically affiliated and non-affiliated banks. The data suggest that affiliated banks have significantly lower interest rate margins and increase their capitalization. Furthermore, we show that the level of activity of affiliated deputies ...

Regional Income Stratification in Unified Germany Using a Gini Decomposition Approach

Using representative micro data from the German Socio-Economic Panel Study (SOEP), this paper delivers new insights into the development of income inequality and regional stratification in Germany after unification. This paper applies a new method for detecting social stratification by a decomposition of the Gini index that yields the obligatory between- and within-group components as well as an 'overlapping' ...

Electricity Wholesale Market Prices in Europe: Convergence?

This paper tests the hypothesis that the ongoing restructuring process in the European electricity sector has led to a common European market for electricity. Based on a Principal Component Analysis (PCA) of wholesale electricity prices in 2002-2006, we reject the assumption of full market integration. For several pairs of countries, the weaker hypothesis of (bilateral) convergence is accepted based ...

Voting, Inequality and Redistribution

This paper surveys models of voting on redistribution. Under reasonable assumptions, the baseline model produces an equilibrium with the extent of redistributive taxation chosen by the median income earner. If the median is poorer than average, redistribution is from rich to poor, and increasing inequality increases redistribution. However, under different assumptions about the economic environment, ...

On the Choice of Public Pensions When Income and Life Expectancy Are Correlated

The paper presents a model where public pensions are determined by majority voting. Voters differ by age and income. Moreover, life expectancy increases with income. Depending on the strength of the link between contributions and benefits, and the relationship between income and life expectancy, individually optimal tax rates may increase or decrease with income. If they decrease, high tax rates are ...

Central versus Local Education Finance: A Political Economy Approach

This paper models voters' preferences over central versus local education policies when there are private alternatives. Education is financed by income taxes and individuals are mobile between communities. Public education levels are chosen by majority vote. Contrary to conventional wisdom, centralisation may benefit the rich and poor, while the middle class prefer decentralised education. The model ...

Measuring Ethnic Identity and Its Impact on Economic Behavior

This article advocates for a new measure of the ethnic identity of migrants, models its determinants, and explores its explanatory power for economic performance. The ethnosizer, a measure of the intensity of a person's ethnic identity, is constructed from information on the following elements: language, media, ethnic self-identification, ethnic networks, and residency plans. The two-dimensional concept ...

Life Satisfaction Shows Terminal Decline in Old Age: Longitudinal Evidence from the German Socio-Economic Panel Study (SOEP)

Longitudinal data spanning 22 years, obtained from deceased participants of the German Socio-Economic Panel Study (SOEP; N = 1,637; 70- to 100-year-olds), were used to examine if and how life satisfaction exhibits terminal decline at the end of life. Changes in life satisfaction were more strongly associated with distance to death than with distance from birth (chronological age). Multiphase growth ...

Carbon Capture and Storage: Settling the German Coal vs. Climate Change Dispute?

Technological Change and Transition: Relative Contributions to Worldwide Growth during the 1990s

In this paper we use the Kumar and Russell [American Economic Review (2002) Vol. 92, pp. 527-548] growth-accounting procedure to examine cross-country growth during the 1990s. Using a data set comprising developed, newly industrialized, developing and transitional economies, we decompose the growth of output per worker into components attributable to technological catch-up, technological change and ...

Overtime Work as a Signaling Device

This paper provides an explanation for the empirically proven relationship between overtime and future benefits. We suggest an internal signaling model, in which a worker signals his value to the employer by supplying unpaid overtime. In our empirical analysis, we examine whether overtime has in fact a signaling component. Variations in collectively bargained hours between industries are exploited, ...

Leistungs- oder Bedarfsgerechtigkeit? Über einen normativen Zielkonflikt des Wohlfahrtsstaats und seiner Bedeutung für die Bewertung des eigenen Erwerbseinkommens

Der Beitrag analysiert den Zielkonflikt zwischen Leistungs- und Bedarfsgerechtigkeit in modernen Wohlfahrtsstaaten und das fundamentale Problem, weshalb die Abgabenund Steuerlast von den Bürgern akzeptiert wird. Es wird die Frage beantwortet, inwieweit ein auf der Makroebene der Gesellschaft bestehendes Steuerungsproblem moderner Wohlfahrtsstaaten auch in der individuellen Wahrnehmung Gerechtigkeitsprobleme ...

Consumption and Social Life in Cities: Evidence from Germany

This paper examines social agglomeration externalities. Using survey data from the German Socioeconomic Panel, it examines the link between city size and different measures of consumption, social interaction and social capital. There is strong evidence of agglomeration effects in consumption, while positive effects of city size on social interaction and social capital variables seem to some extent ...

Dynamik von Einkommen und Armut in Ost- und West-Deutschland

The Relationship between Technology, Innovation, and Firm Performance: Empirical Evidence from E-Business in Europe

This article analyzes the relationship between the usage of Internet-based technologies, different types of innovation, and performance at the firm level. Data for the empirical investigation originates from a sample of 7302 European enterprises. The empirical results show that Internet-based technologies were an important enabler of innovation in the year 2003. It was found that all studied types ...

Publications: German Economic Research Institutes on Track

About a decade ago the German Science Council requested a strengthening of academic research at the German economic research institutes to improve the academic foundation of policy advice - the traditional task of the institutes. Based on publications in SSCI journals, research output has since then improved remarkably in scope and quality and has involved an ever rising number of scholars within the ...

O Brother, Where Art Thou? The Effects of Having a Sibling on Geographic Mobility and Labour Market Outcomes

This paper formulates a model to explain how parental care responsibilities and family structure interact in affecting children's mobility characteristics. Our main result is that the mobility of young adults crucially depends on the presence of a sibling. Siblings compete in location and employment decisions to direct parental care decisions towards their preferred outcome. Only children are not exposed ...

Subjective Income and Employment Expectations and Preferences for Redistribution

Using probabilistic expectations data from the German Socio-Economic Panel, we establish a link between self-reported expectations of occupational mobility and preferences for redistribution. Our results provide new evidence on the validity of the "prospect of upward mobility" hypothesis. (

Isometrische Greifkraft und sozialgerontologische Forschung: Ergebnisse und Analysepotentiale des SHARE und SOEP

Dieser Aufsatz zeigt, dass die Messung der Handgreifkraft ein auch in sozialwissenschaftlichen Bevölkerungsumfragen einfach zu ermittelndes, nicht-invasives und verlässliches objektives Gesundheitsmaß ist. Die Greifkraftmessung stellt nicht nur eine sinnvolle Ergänzung zu selbst berichteten Indikatoren des Gesundheitszustandes dar, sondern besitzt darüber hinaus hinsichtlich einer Vielzahl insbesondere ...