Michael Hüther, Jens Südekum, 06 May 2019

Tito Boeri, Andrea Ichino, Enrico Moretti, Johanna Posch, 13 April 2019

In many European countries, wages are determined by collective bargaining agreements intended to improve wages and reduce inequality. This column compares the impact of different wage bargaining models in Italy, which has limited geographical wage differences in nominal terms and almost no relationship between local productivity and local nominal wages, and Germany, which has a tighter link between local wages and local productivity. The Italian system is successful at reducing nominal wage inequality, but creates costly geographic imbalances. If Italy were to adopt the German system, aggregate employment and earnings would increase by 11.04% and 7.45%, respectively. 

Thilo Huning, Nikolaus Wolf, 12 April 2019

State borders can change due to both political and economic disputes. This column shows how the formation of the German state can be traced back to British political intervention at the end of the Napoleonic War. In preventing Russia from gaining territory westwards, Britain set in motion a series of events that gave Prussia strategic trade advantages. This led to the formation of Europe's first customs union (the Zollverein) and prepared the political unification of Germany.

Thorsten Beck, 04 February 2019

Daniel Hamermesh, Jeff Biddle, 26 January 2019

People combine goods and time in household production, and theory suggests that as their wage rates rise, they will substitute goods-intensive for time-intensive activities. However, it is not clear how activities that take essentially no, or minimal, amounts of spending, such as sleeping or watching TV, fit into the theory. This column uses data from time diaries for the US, France, and Germany to demonstrate that not all non-work time is the same, and different components of non-work time respond differently to changing incentives.

Wolfgang Dauth, Sebastian Findeisen, Enrico Moretti, Jens Südekum, 06 January 2019

Large internal wage disparities between cities are a common feature in countries around the world. Using data from Germany, this column argues that one key driver of this is rising assortative matching of high-quality workers and plants in large cities. One promising strategy to reduce spatial wage disparities is to improve matching within small cities.

Stefano Micossi, Alexandra D'Onofrio, Fabrizia Peirce, 28 November 2018

Ian Goldin, Benjamin Nabarro, 24 October 2018

Anti-migration sentiment has been rising across Europe. This column shows that the economic impact of migration is positive, but depends almost entirely on the policies implemented to ensure that migrants can be productive and the extent to which the positive economic consequences of migration are distributed across individuals. Unless the rhetoric of a perceived cultural and economic threat posed by migrants is countered effectively, economies stand to lose out substantially from the implementation of anti-immigration policies.

Christian Dustmann, Bernd Fitzenberger, Markus Zimmermann, 22 October 2018

There is a lot of concern about the rise in housing costs in many developed countries and the impact it has on living conditions and inequality. Yet, to date little evidence exists on how changes in housing costs affect the distribution of disposable income. This column draws on recent research for Germany to show that shifts in housing costs severely exacerbated the rise in income inequality net of housing expenditures, and discusses the reasons behind this and implications for inequality.

Maria Ferreira, 21 September 2018

Despite a considerable premium on equity compared to risk-free assets, many households do not own any financial investments. Personal risk preferences play a crucial role in understanding this economic behaviour. This column analyses financial risk attitudes across 15 countries and identifies relevant factors that affect the willingness to take risky investment decisions. The results reveal a significant heterogeneous attitude of risk-aversion in all countries and suggest that standard portfolio-investment theory does not always hold. 

Gabriel Ahlfeldt, Duncan Roth, Tobias Seidel, 04 September 2018

While there is a large and controversial literature on the implications of minimum wages for employment and the distribution of income, little is known about the consequences across regions. This column describes how the implementation of a minimum wage in Germany in 2015 has raised incomes in the lower part of the wage distribution without affecting employment of low-wage workers. However, there is no clear evidence that the minimum wage has led to a net in-migration or out-migration in poorer German counties.

Michael Burda, 23 August 2018

Professor Michael C. Burda of the Humboldt University of Berlin discusses the German opinion on Britain's decision to leave the EU. 

Nikolaus Wolf, 11 June 2018

Arna Olafsson, Michaela Pagel, 07 June 2018

A large literature analyses whether individuals save adequately for retirement and plan properly. This column uses a detailed panel of individual spending, income, account balances, and credit limits from a personal finance management software provider to investigate how expenditures, liquid savings, and consumer debt change around retirement. It finds that, upon retirement, individuals reduce their spending in both work-related and leisure categories. In addition, individuals reduce their consumer debt and increase their liquid savings, which is inconsistent with existing models of insufficient planning. 

Michele Battisti, Giovanni Peri, Agnese Romiti, 05 June 2018

Most of the evidence from studies analysing the effect of ethnic concentration on immigrants’ employment and earnings points to a positive effect of network size on labour market outcomes. This column uses data from social security records in Germany to show that a larger co-ethnic network in the location of first settlement can increase the short-run probability of finding a job but can also hinder human capital investment, limiting the benefits of the larger network over the long run.

Simon Wren-Lewis, 03 June 2018

Thorsten Beck, 01 June 2018

Ashoka Mody, 01 April 2018



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