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

Christina Felfe, Rafael Lalive, 20 May 2018

In many societies and for many families, the responsibility for looking after very young children during the day has passed from parents to third-party care providers, prompting a hotly contested debate about the merits of early childcare and how it affects childhood development. This column exploits an expansion of childcare provision in Germany to show that early childcare can be a major contributor to eliminating inequality of opportunity and even lay the foundations for a more productive workforce in the future.

Marcel Henkel, Tobias Seidel, Jens Südekum, 04 May 2018

Germany shifts a massive amount of fiscal transfers across jurisdictions every year. This column argues that this limits the degree of economic disparities across regions, but comes at the cost of lower national productivity and output. Still, in terms of welfare, Germany would not be better off if all fiscal transfers were abolished.

Ashoka Mody, 25 April 2018

Since Emmanuel Macron’s election as French president in May 2017, hope has lingered that a mythical friendship between France and Germany will help complete the gaps in the euro area architecture. As this column discusses, however, history provides no basis for such an expectation. National interests, always central to the decision calculus, have diverged even further. French leaders have a pressing task at hand: they need to rejuvenate their own economy and build domestic social cohesion. This may take a generation or more. 

Ashoka Mody, 21 March 2018

Two European elections – in Germany on 24 September 2017 and Italy on 4 March 2018 – warn that the peoples of Europe are drifting apart. Much of the recent deepening of these divisions can be traced to Europe’s single currency, the euro. This column argues that the political divide in Europe may now be hard to roll back absent a shift in focus to national priorities that pay urgent attention to the needs of those being left behind.

Rüdiger Bachmann, Peter Zorn, 02 March 2018

A long-standing question in macroeconomic research pertains to the causes of business cycle fluctuations in macroeconomic variables like output and investment. This column uses survey data from the German manufacturing sector to show that aggregate variations in investment and output are mainly due to aggregate demand shocks. These shocks resemble swings in business and consumer sentiment but, for the most part, have no obvious relation to macroeconomic policy.

Axel Börsch-Supan, Irene Ferrari, Nicolas Goll, Johannes Rausch, 26 January 2018

Retirement ages in industrialised countries have been rising over the last three decades as more people work later into their lives. This column focuses on Germany, examining this trend and the contributing factors. Despite comparable trends in health, educational attainment, and spouse’s labour force participation, these three factors do not appear to explain the rise in retirement age. Instead, changes to public pension rules seem to be the key driver.

Joshua Aizenman, Yothin Jinjarak, Nam Ngo, Ilan Noy, 11 December 2017

The Global Crisis and its aftermath has focused attention on increasing inequality, and specifically on declining real incomes of the working poor. Comparing the US to Germany, this column argues that pushing more students to degree-granting colleges may no longer be the most efficient way to deal with the challenges caused by the decline in manufacturing employment affecting, in particular, lower-income households. Well-resourced, well-targeted vocational training can prove to be a better long-term investment in skill acquisition to help ameliorate the difficulties faced by workers whose prospects look to be quite bleak.

Rüdiger Bachmann, Christian Bayer, Christian Merkl, Stefan Seth, Heiko Stüber, Felix Wellschmied, 01 November 2017

Many establishments both hire and lay off within a short time window, resulting in ‘churn’. This column uses a newly constructed dataset to show that the rate of churn in Germany is high and can be up to 40% greater in booms compared to recessions. Both establishments that are shrinking and those that are growing hire more and lay off more in booms than in recessions.

Russell Cooper, Moritz Meyer, Immo Schott, 28 October 2017

A major factor behind the ‘German miracle’ – which saw GDP collapse by almost 7% during the Global Crisis but unemployment increase by less than 1% – was a ‘short-time work’ policy that incentivised firms to reduce workers' hours rather than laying off workers. This column explores the effectiveness of the policy and the potentially negative effects on output and productivity. In the short term, short-time work prevented steeper falls in output and employment. However, it also affected the reallocation of labour between more and less productive firms, leading to medium-term productivity losses.

Clemens Fuest, Andreas Peichl, Sebastian Siegloch, 10 October 2017

Economists tend to think that the corporate tax burden is shared between labour and capital, but even among researchers in the field there is substantial disagreement over how much of the burden is shifted to workers. This column exploits variations in local business tax rates in Germany to identify the corporate tax incidence on wages. On average, more than half of the corporate tax burden is passed onto workers, implying a reduced overall progressivity of the German tax system.



CEPR Policy Research