Giulia Giupponi, Camille Landais, 01 April 2020

Short-time work is a subsidy for temporary reductions in the number of hours worked in firms affected by temporary shocks. Evidence suggests that it can have large positive effects on employment and can be more effective than unemployment insurance or universal transfers. This column discusses how the COVID-19 crisis – with its mandated reduction in hours of work and massive liquidity crunch for firms – is a textbook case for the use of short-time work. Taking into account available evidence and the current situation, it proposes guidelines to effectively implement short-term work.

Sebastian Heise, Tommaso Porzio, 29 February 2020

Thirty years after reunification, a stark and persistent wage gap between East Germany and West Germany remains. This column studies why East Germans do not migrate to the West to take advantage of the higher real wages there. Analysing data from more than 1 million establishments and almost 2 million individuals over 25 years, it suggests that moving people across space is difficult and costly. Reallocating workers to better jobs at their current location could be a more cost-effective avenue to increase aggregate wages, and even accelerate regional convergence.

Thushyanthan Baskaran, Zohal Hessami, 18 February 2020

The fact that women are underrepresented in politics is often viewed as an important social problem. But why should it be a problem? This column argues that when too few women hold political office, political decisions may not adequately reflect women’s needs and preferences. Using the example of the public provision of childcare in Germany, it shows that municipalities with a higher share of female councillors expand public childcare more quickly. The fact that the presence of women has substantive effects on policies should be taken into account in current debates around the introduction of gender quotas in politics.

Kym Anderson, 16 February 2020

Global alcoholic beverage markets have changed dramatically in recent years due to globalisation, income growth in emerging economies, changes in individual preferences, policy initiatives to curb socially harmful drinking, and, in particular, the dual trade policy shocks of Brexit and the US’s unilaterally imposed discriminatory tariffs. This column provides an overview of the major trends and projects the possible effects of Brexit and the US tariffs on the global alcohol market. It concludes that both shocks would reduce world trade in wine. Even countries not targeted by US tariffs can be worse off if those tariffs sufficiently reduce global consumption. 

Marvin Suesse, Nikolaus Wolf, 13 January 2020

There was a rapid spread of credit cooperatives in rural 19th-century Germany providing small-scale savings and loan services to previously unbanked people. This column shows how these cooperatives helped shift farm investment from grains to potentially profitable but more capital-intensive products, such as the production of meat and dairy. In cases like this, changes in the sector of economic activity are a better metric for the impact of microfinance than comparing income pre- and post-credit.

Dany Bahar, Andreas Hauptmann, Cem Özgüzel, Hillel Rapoport, 22 November 2019

The economic debate on immigration has focused on migration’s short-term labour market and fiscal effects. Less attention has been given to the long-run economic opportunities linked to migration. This column uses the case of refugees returning to the former Yugoslavia from Germany after the end of the Yugoslav wars to explore the role that returning migrants play in shaping the industrial development of their home country. The findings support the idea that migrants are drivers of knowhow and technology transfers between countries.

Tamas Vonyo, 21 November 2019

The year 1945 marked the end of the worst military conflict in history, which brought unprecedented destruction and loss of life. However, the quarter-century that followed is known as the most remarkable period of economic growth and social progress in Europe. This column, part of a Vox debate on WWII, lays out three factors that made this paradox possible: the strong foundations of economic recovery in Western Europe, vital support for the reconstruction of European trade and cooperation, and Allied support for the revival of the German economy. In contrast, Eastern Europe could barely recover due to the demographic disaster from the war.

Mark Harrison, 14 November 2019

Economic warfare was widely used in WWII. When one country blockaded another’s supply of essential goods or bombed the industries producing them, why did the adversary’s economy fail to collapse? This column, part of the Vox debate on the economics of WWII, reviews Mançur Olson’s insights, which arose from the elementary economic concept of substitution. He concluded that there are no essential goods; there are only essential uses, which can generally be supplied in many ways.

Tetsuji Okazaki, 13 November 2019

During World War II aircraft production in Japan increased sharply. This column, part of the Vox debate on the economics of WWII, examines the reasons for this ‘production miracle’, focusing on an aircraft manufacturing plant of Mitsubishi Heavy Industries Co., one of the two largest aircraft producers in Japan. The key to the production increase was the expansion of the supplier network. Mitsubishi Heavy Industries organized many suppliers to provide aircraft parts to its plants. However, in the final stage of the war, destruction of the supplier network by strategic bombing and an earthquake caused the collapse of the company’s aircraft production.

Eric Golson, 11 November 2019

Neutrality has long been viewed as impartiality in war. This column, part of the Vox debate on World War II, asserts that neutral states in the war were realist in approaching their defence to ensure their survival. Neutrals such as Portugal, Spain, Sweden, and Switzerland maintained independence by offering economic concessions to the belligerents to make up for their relative military weakness. Economic concessions took the form of merchandise trade, services, labour, and capital flows. Depending on their position and the changing fortunes of war, neutral countries could also extract concessions from the belligerents, if their situation permitted.

Sergey Alexeev, 09 November 2019

Despite the extensive literature on intergenerational mobility, few studies have investigated the effects of non-monetary income from housing, or ‘imputed rent’, on intergenerational income mobility. This column demonstrates the significance of such an omission. Using national panel data sets for Australia, the US, and Germany, it finds that only Australia sees a noticeable reduction in mobility when imputed rent is accounted for in the measure of income. The findings challenge Australia’s basic claim of providing equality of opportunity. 

Thorsten Beck, 04 October 2019

Phillips Payson O’Brien, 03 September 2019

Allied victory in WWII is usually viewed through the lens of large land battles, from Stalingrad to Kursk to D-Day. However, battlefield losses of equipment in these ‘great’ land battles were relatively small and easily replaceable. This column demonstrates that the real effort of the major powers was put into the construction of air and sea weapons. The Allies used their air and sea power to destroy the Axis’s in a multi-layered campaign. This was the true battlefield of WWII: a massive air-sea super battlefield that stretched for thousands of miles. Victory in this super-battlefield led to victory in the war.

Alan Bollard, 05 September 2019

The World Wars precipitated unprecedented economic problems in all countries. This column, part of a Vox debate on the economics of WWII, describes how economists played a larger role in WWII than in any previous conflict. They advanced the methods of public finance and influenced the directions of the war effort. By the end of the war, economists were widely embedded in government and policymaking.

Sascha O. Becker, Ana Fernandes, Doris Weichselbaumer, 05 June 2019

The arrival of a child affects women and men differently in terms of labour market outcomes, but it is difficult to separate out the causal impact of discrimination from other factors. This column uses empirical evidence from Germany, Switzerland, and Austria to show that women are most affected in part-time job applications if they signal a ‘risk’ of having young children soon.

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

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