TY - RPRT A1 - Bruttel, Lisa Verena A1 - Nithammer, Juri A1 - Stolley, Florian T1 - ”Thanks in Advance” BT - The Negative Effect of a Polite Phrase on Compliance with a Request T2 - CEPA Discussion Papers N2 - This paper studies the effect of the commonly used phrase “thanks in advance” on compliance with a small request. In a controlled laboratory experiment we ask participants to give a detailed answer to an open question. The treatment variable is whether or not they see the phrase “thanks in advance.” Our participants react to the treatment by exerting less effort in answering the request even though they perceive the phrase as polite. T3 - CEPA Discussion Papers - 7 KW - compliance behavior KW - gratitude KW - reciprocity KW - experiment Y1 - 2019 U6 - http://nbn-resolving.de/urn/resolver.pl?urn:nbn:de:kobv:517-opus4-427706 SN - 2628-653X IS - 7 ER - TY - RPRT A1 - Ziemann, Niklas T1 - You will receive your money next week! BT - Experimental evidence on the role of Future-Time Reference for intertemporal decision-making T2 - CEPA Discussion Papers N2 - Against the background of the increasingly discussed “Linguistic Saving Hypothesis” (Chen, 2013), I studied whether the targeted use of a present tense (close tense) and a future tense (distant tense) within the same language have an impact on intertemporal decision-making. In a monetarily incentivized laboratory experiment in Germany, I implemented two different treatments on intertemporal choices. The treatments differed in the tense in which I referred to future rewards. My results show that individuals prefer to a greater extent rewards which are associated with a present tense (close tense). This result is in line with my prediction and the first empirical support for the Linguistic Saving Hypothesis within one language. However, this result holds exclusively for males. Females seem to be unaffected by the linguistic manipulation. I discuss my findings in the context of “gender-as-culture” as well as their potential policy-implications. T3 - CEPA Discussion Papers - 56 KW - Experiment KW - Intertemporal Choice KW - Language KW - Linguistic Saving Hypothesis Y1 - 2022 U6 - http://nbn-resolving.de/urn/resolver.pl?urn:nbn:de:kobv:517-opus4-563983 SN - 2628-653X IS - 56 CY - Potsdam ER - TY - RPRT A1 - Gohl, Niklas T1 - Working Longer, Working Stronger? BT - The Forward-Looking Effects of Increasing the Retirement Age on (Un)employment Behaviour T2 - CEPA Discussion Papers N2 - Leveraging two cohort-specific pension reforms, this paper estimates the forward-looking effects of an exogenous increase in the working horizon on (un)employment behaviour for individuals with a long remaining statutory working life. Using difference-in-differences and regression discontinuity approaches based on administrative and survey data, I show that a longer legal working horizon increases individuals’ subjective expectations about the length of their work life, raises the probability of employment, decreases the probability of unemployment, and increases the intensity of job search among the unemployed. Heterogeneity analyses show that the demonstrated employment effects are strongest for women and in occupations with comparatively low physical intensity, i.e., occupations that can be performed at older ages. T3 - CEPA Discussion Papers - 63 KW - retirement policies KW - employment KW - DiD Y1 - 2023 U6 - http://nbn-resolving.de/urn/resolver.pl?urn:nbn:de:kobv:517-opus4-585275 SN - 2628-653X IS - 63 ER - TY - RPRT A1 - Sondergeld, Virginia A1 - Wrohlich, Katharina T1 - Women in management and the gender pay gap T2 - CEPA Discussion Papers N2 - We analyze the impact of women’s managerial representation on the gender pay gap among employees on the establishment level using German Linked-Employer-Employee-Data from the years 2004 to 2018. For identification of a causal effect we employ a panel model with establishment fixed effects and industry-specific time dummies. Our results show that a higher share of women in management significantly reduces the gender pay gap within the firm. An increase in the share of women in first-level management e.g. from zero to above 33 percent decreases the adjusted gender pay gap from a baseline of 15 percent by 1.2 percentage points, i.e. to roughly 14 percent. The effect is stronger for women in second-level than first-level management, indicating that women managers with closer interactions with their subordinates have a higher impact on the gender pay gap than women on higher management levels. The results are similar for East and West Germany, despite the lower gender pay gap and more gender egalitarian social norms in East Germany. From a policy perspective, we conclude that increasing the number of women in management positions has the potential to reduce the gender pay gap to a limited extent. However, further policy measures will be needed in order to fully close the gender gap in pay. T3 - CEPA Discussion Papers - 66 KW - gender pay gap KW - women in management KW - board diversity KW - two-way fixed effects KW - linked employer-employee data Y1 - 2023 U6 - http://nbn-resolving.de/urn/resolver.pl?urn:nbn:de:kobv:517-opus4-605813 SN - 2628-653X IS - 66 ER - TY - RPRT A1 - Caliendo, Marco A1 - Fossen, Frank M. A1 - Kritikos, Alexander T1 - What Makes an Employer? T2 - CEPA Discussion Papers N2 - As the policy debate on entrepreneurship increasingly centers on firm growth in terms of job creation, it is important to better understand which variables influence the first hiring decision and which ones influence the subsequent survival as an employer. Using the German Socio-economic Panel (SOEP), we analyze what role individual characteristics of entrepreneurs play in sustainable job creation. While human and social capital variables positively influence the hiring decision and the survival as an employer in the same direction, we show that none of the personality traits affect the two outcomes in the same way. Some traits are only relevant for survival as an employer but do not influence the hiring decision, other traits even unfold a revolving door effect, in the sense that employers tend to fail due to the same characteristics that positively influenced their hiring decision. T3 - CEPA Discussion Papers - 13 KW - employer KW - entrepreneurship KW - business venturing KW - firm growth KW - employment growth KW - personality Y1 - 2019 U6 - http://nbn-resolving.de/urn/resolver.pl?urn:nbn:de:kobv:517-opus4-437360 SN - 2628-653X IS - 13 ER - TY - RPRT A1 - Eydam, Ulrich A1 - Leupold, Florian T1 - What is it good for? BT - On the Inflationary Effects of Military Conflicts T2 - CEPA Discussion Papers N2 - Military conflicts and wars affect a country’s development in various dimensions. Rising inflation rates are a potentially important economic effect associated with conflict. High inflation can undermine investment, weigh on private consumption, and threaten macroeconomic stability. Furthermore, these effects are not necessarily restricted to the locality of the conflict, but can also spill over to other countries. Therefore, to understand how conflict affects the economy and to make a more comprehensive assessment of the costs of armed conflict, it is important to take inflationary effects into account. To disentangle the conflict-inflation-nexus and to quantify this relationship, we conduct a panel analysis for 175 countries over the period 1950–2019. To capture indirect inflationary effects, we construct a distance based spillover index. In general, the results of our analysis confirm a statistically significant positive direct association between conflicts and inflation rates. This finding is robust across various model specifications. Moreover, our results indicate that conflict induced inflation is not solely driven by increasing money supply. Furthermore, we document a statistically significant positive indirect association between conflicts and inflation rates in uninvolved countries. T3 - CEPA Discussion Papers - 65 KW - inflation KW - wars KW - military conflicts KW - spillover effects KW - dynamic panel estimation Y1 - 2023 U6 - http://nbn-resolving.de/urn/resolver.pl?urn:nbn:de:kobv:517-opus4-597966 SN - 2628-653X IS - 65 ER - TY - RPRT A1 - Bachelet, Marion A1 - Kalkuhl, Matthias A1 - Koch, Nicolas T1 - What if working from home will stick? BT - Distributional and climate impacts for Germany T2 - CEPA Discussion Papers N2 - The COVID-19 pandemic created the largest experiment in working from home. We study how persistent telework may change energy and transport consumption and costs in Germany to assess the distributional and environmental implications when working from home will stick. Based on data from the German Microcensus and available classifications of working-from-home feasibility for different occupations, we calculate the change in energy consumption and travel to work when 15% of employees work full time from home. Our findings suggest that telework translates into an annual increase in heating energy expenditure of 110 euros per worker and a decrease in transport expenditure of 840 euros per worker. All income groups would gain from telework but high-income workers gain twice as much as low-income workers. The value of time saving is between 1.3 and 6 times greater than the savings from reduced travel costs and almost 9 times higher for high-income workers than low-income workers. The direct effects on CO₂ emissions due to reduced car commuting amount to 4.5 millions tons of CO₂, representing around 3 percent of carbon emissions in the transport sector. T3 - CEPA Discussion Papers - 41 KW - commuting KW - home office KW - COVID-19 KW - energy expenditure KW - carbon emissions Y1 - 2022 U6 - http://nbn-resolving.de/urn/resolver.pl?urn:nbn:de:kobv:517-opus4-532384 SN - 2628-653X IS - 41 ER - TY - RPRT A1 - Borck, Rainald A1 - Schrauth, Philipp T1 - Urban pollution BT - A global perspective T2 - CEPA Discussion Papers N2 - We use worldwide satellite data to analyse how population size and density affect urban pollution. We find that density significantly increases pollution exposure. Looking only at urban areas, we find that population size affects exposure more than density. Moreover, the effect is driven mostly by population commuting to core cities rather than the core city population itself. We analyse heterogeneity by geography and income levels. By and large, the influence of population on pollution is greatest in Asia and middle-income countries. A counterfactual simulation shows that PM2.5 exposure would fall by up to 36% and NO2 exposure up to 53% if within countries population size were equalized across all cities. T3 - CEPA Discussion Papers - 60 KW - population density KW - air pollution KW - gridded data Y1 - 2022 U6 - http://nbn-resolving.de/urn/resolver.pl?urn:nbn:de:kobv:517-opus4-572049 SN - 2628-653X IS - 60 ER - TY - RPRT A1 - Gohl, Niklas A1 - Schrauth, Philipp T1 - Ticket to Paradise? BT - The Effect of a Public Transport Subsidy on Air Quality T2 - CEPA Discussion Papers N2 - This paper provides novel evidence on the impact of public transport subsidies on air pollution. We obtain causal estimates by leveraging a unique policy intervention in Germany that temporarily reduced nationwide prices for regional public transport to a monthly flat rate price of 9 Euros. Us-ing DiD estimation strategies on air pollutant data, we show that this intervention causally reduced a benchmark air pollution index by more than six percent. Our results illustrate that public transport subsidies – especially in the context of spatially constrained cities – offer a viable alterna-tive for policymakers and city planers to improve air quality, which has been shown to crucially affect health outcomes. T3 - CEPA Discussion Papers - 50 KW - air pollution KW - public transport KW - transport subsidies Y1 - 2022 U6 - http://nbn-resolving.de/urn/resolver.pl?urn:nbn:de:kobv:517-opus4-558466 SN - 2628-653X IS - 50 ER - TY - RPRT A1 - Brenner, Andri T1 - The Social Power of Spillover Effects BT - Educating Against Environmental Externalities T2 - CEPA Discussion Papers N2 - Economists are worried that the lack of property rights to natural capital goods jeopardizes the sustainability of the economic growth miracle that has existed since industrialization. This article questions their position. A vertical innovation model with a portfolio of technologies for abatement, adaptation, and general (Harrod-neutral) technology reveals that environmental damage spillovers have a comparable effect on research profits as technology spillovers so that the social costs of depleting public natural capital are internalized. As long as there is free access to information and technology, growth is sustainable and the allocation of research efforts among alternative technologies is socially optimal. While there still is a need to address externalities from monopolistic research markets, no environmental policy is necessary. These results suggest that environmental externalities may originate in restricted access to information and technology, demonstrating that (i) information has a similar effect as an environmental tax and (ii) knowledge and technology transfers have an impact comparable to that of subsidies for research in green technology. T3 - CEPA Discussion Papers - 35 KW - endogenous growth KW - horizontal innovation KW - sustainability Y1 - 2021 U6 - http://nbn-resolving.de/urn/resolver.pl?urn:nbn:de:kobv:517-opus4-511098 SN - 2628-653X IS - 35 ER - TY - RPRT A1 - Amoroso, Sara A1 - Herrmann, Benedikt A1 - Kritikos, Alexander T1 - The Role of Regulation and Regional Government Quality for High Growth Firms BT - The Good, the Bad, and the Ugly T2 - CEPA Discussion Papers N2 - High growth firms (HGFs) are important for job creation and considered to be precursors of economic growth. We investigate how formal institutions, like product- and labor-market regulations, as well as the quality of regional governments that implement these regulations, affect HGF development across European regions. Using data from Eurostat, OECD, WEF, and Gothenburg University, we show that both regulatory stringency and the quality of the regional government influence the regional shares of HGFs. More importantly, we find that the effect of labor- and product-market regulations ultimately depends on the quality of regional governments: in regions with high quality of government, the share of HGFs is neither affected by the level of product market regulation, nor by more or less flexibility in hiring and firing practices. Our findings contribute to the debate on the effects of regulations by showing that regulations are not, per se, “good, bad, and ugly”, rather their impact depends on the efficiency of regional governments. Our paper offers important building blocks to develop tailored policy measures that may influence the development of HGFs in a region. T3 - CEPA Discussion Papers - 71 KW - High growth firms KW - Regulation KW - Quality of regional governments KW - Regions Y1 - 2023 U6 - http://nbn-resolving.de/urn/resolver.pl?urn:nbn:de:kobv:517-opus4-612771 SN - 2628-653X IS - 71 ER - TY - RPRT A1 - Kritikos, Alexander A1 - Schiersch, Alexander A1 - Stiel, Caroline T1 - The productivity puzzle in business services T2 - CEPA Discussion Papers N2 - In Germany, the productivity of professional services, a sector dominated by micro and small firms, declined by 40 percent between 1995 and 2014. This productivity decline also holds true for professional services in other European countries. Using a German firm-level dataset of 700,000 observations between 2003 and 2017, we analyze this largely uncovered phenomenon among professional services, the 4th largest sector in the EU15 business economy, which provide important intermediate services for the rest of the economy. We show that changes in the value chain explain about half of the decline and the increase in part-time employment is a further minor part of the decline. In contrast to expectations, the entry of micro and small firms, despite their lower productivity levels, is not responsible for the decline. We also cannot confirm the conjecture that weakening competition allows unproductive firms to remain in the market. T3 - CEPA Discussion Papers - 37 KW - business services KW - labor productivity KW - productivity slowdown Y1 - 2021 U6 - http://nbn-resolving.de/urn/resolver.pl?urn:nbn:de:kobv:517-opus4-514536 SN - 2628-653X IS - 37 ER - TY - RPRT A1 - Marcus, Jan A1 - Siedler, Thomas A1 - Ziebarth, Nicolas R. T1 - The Long-Run Effects of Sports Club Vouchers for Primary School Children T2 - CEPA Discussion Papers N2 - Starting in 2009, the German state of Saxony distributed sports club membership vouchers among all 33,000 third graders in the state. The policy’s objective was to encourage them to develop a long-term habit of exercising. In 2018, we carried out a large register-based survey among several cohorts in Saxony and two neighboring states. Our difference-in-differences estimations show that, even after a decade, awareness of the voucher program was significantly higher in the treatment group. We also find that youth received and redeemed the vouchers. However, we do not find significant short- or long-term effects on sports club membership, physical activity, overweightness, or motor skills. T3 - CEPA Discussion Papers - 34 KW - physical activity KW - voucher KW - primary school KW - obesity KW - habit formation KW - objective health measures KW - school health examinations KW - windfall gains KW - crowding out KW - taxpayer subsidies Y1 - 2021 U6 - http://nbn-resolving.de/urn/resolver.pl?urn:nbn:de:kobv:517-opus4-508978 SN - 2628-653X IS - 34 ER - TY - RPRT A1 - Andres, Maximilian A1 - Bruttel, Lisa Verena A1 - Friedrichsen, Jana T1 - The Leniency Rule Revisited: Experiments on Cartel Formation with Open Communication T2 - CEPA Discussion Papers N2 - The experimental literature on antitrust enforcement provides robust evidence that communication plays an important role for the formation and stability of cartels. We extend these studies through a design that distinguishes between innocuous communication and communication about a cartel, sanctioning only the latter. To this aim, we introduce a participant in the role of the competition authority, who is properly incentivized to judge communication content and price setting behavior of the firms. Using this novel design, we revisit the question whether a leniency rule successfully destabilizes cartels. In contrast to existing experimental studies, we find that a leniency rule does not affect cartelization. We discuss potential explanations for this contrasting result. T3 - CEPA Discussion Papers - 24 KW - cartel KW - judgment of communication KW - corporate leniency program KW - price competition KW - experiment Y1 - 2021 U6 - http://nbn-resolving.de/urn/resolver.pl?urn:nbn:de:kobv:517-opus4-491696 SN - 2628-653X N1 - This project, including the design and hypotheses, was preregistered at OSF before data collection had started (osf.io/ubhz8). IS - 24 ER - TY - RPRT A1 - Caliendo, Marco A1 - Künn, Steffen A1 - Mahlstedt, Robert T1 - The Intended and Unintended Effects of Promoting Labor Market Mobility T2 - CEPA Discussion Papers N2 - Subsidizing the geographical mobility of unemployed workers may improve welfare by relaxing their financial constraints and allowing them to find jobs in more prosperous regions. We exploit regional variation in the promotion of mobility programs along administrative borders of German employment agency districts to investigate the causal effect of offering such financial incentives on the job search behavior and labor market integration of unemployed workers. We show that promoting mobility – as intended – causes job seekers to increase their search radius, apply for and accept distant jobs. At the same time, local job search is reduced with adverse consequences for reemployment and earnings. These unintended negative effects are provoked by spatial search frictions. Overall, the unconditional provision of mobility programs harms the welfare of unemployed job seekers. T3 - CEPA Discussion Papers - 42 KW - Job Search KW - Active Labor Market Policy KW - Labor Market Mobility KW - Unintended Consequence KW - Search Frictions Y1 - 2022 U6 - http://nbn-resolving.de/urn/resolver.pl?urn:nbn:de:kobv:517-opus4-535229 SN - 2628-653X ER - TY - RPRT A1 - Caliendo, Marco A1 - Kritikos, Alexander A1 - Stier, Claudia T1 - The Influence of Start-up Motivation on Entrepreneurial Performance T2 - CEPA Discussion Papers N2 - Predicting entrepreneurial development based on individual and business-related characteristics is a key objective of entrepreneurship research. In this context, we investigate whether the motives of becoming an entrepreneur influence the subsequent entrepreneurial development. In our analysis, we examine a broad range of business outcomes including survival and income, as well as job creation, expansion and innovation activities for up to 40 months after business formation. Using self-determination theory as conceptual background, we aggregate the start-up motives into a continuous motivational index. We show – based on a unique dataset of German start-ups from unemployment and non-unemployment – that the later business performance is better, the higher they score on this index. Effects are particularly strong for growth oriented outcomes like innovation and expansion activities. In a next step, we examine three underlying motivational categories that we term opportunity, career ambition, and necessity. We show that individuals driven by opportunity motives perform better in terms of innovation and business expansion activities, while career ambition is positively associated with survival, income, and the probability of hiring employees. All effects are robust to the inclusion of a large battery of covariates that are proven to be important determinants of entrepreneurial performance. T3 - CEPA Discussion Papers - 59 KW - Entrepreneurship KW - Push and Pull Theories KW - Start-up Motivation KW - Survival KW - Job Creation KW - Firm Growth KW - Innovation Y1 - 2022 U6 - http://nbn-resolving.de/urn/resolver.pl?urn:nbn:de:kobv:517-opus4-571152 SN - 2628-653X IS - 59 ER - TY - RPRT A1 - Amann, Erwin A1 - Rzepka, Sylvi T1 - The Effect of Goal-Setting Prompts in a Blended Learning Environment BT - Evidence from a Field Experiment T2 - CEPA Discussion Papers N2 - We investigate how inviting students to set task-based goals affects usage of an online learning platform and course performance. We design and implement a randomized field experiment in a large mandatory economics course with blended learning elements. The low-cost treatment induces students to use the online learning system more often, more intensively, and to begin earlier with exam preparation. Treated students perform better in the course than the control group: they are 18.8% (0.20 SD) more likely to pass the exam and earn 6.7% (0.19 SD) more points on the exam. There is no evidence that treated students spend significantly more time, rather they tend to shift to more productive learning methods. The heterogeneity analysis suggests that higher treatment effects are associated with higher levels of behavioral bias but also with poor early course behavior. T3 - CEPA Discussion Papers - 25 KW - natural field experiment KW - blended learning KW - behavioral economics KW - goal-setting Y1 - 2021 U6 - http://nbn-resolving.de/urn/resolver.pl?urn:nbn:de:kobv:517-opus4-493476 SN - 2628-653X N1 - The trial is registered in the AEA RCT registry, RCT ID AEARCTR-28790 (https://doi.org/10.1257/rct.2928-1.0). IS - 25 ER - TY - RPRT A1 - Eydam, Ulrich T1 - The Distributional Implications of Climate Policies Under Uncertainty T2 - CEPA Discussion Papers N2 - Promoting the decarbonization of economic activity through climate policies raises many questions. From a macroeconomic perspective, it is important to understand how these policies perform under uncertainty, how they affect short-run dynamics and to what extent they have distributional effects. In addition, uncertainties directly associated with climate policies, such as uncertainty about the carbon budget or emission intensities, become relevant aspects. We study the implications of emission reduction schemes within a Two-Agent New-Keynesian (TANK) model. This quantitative exercise, based on data for the German economy, provides various insights. In the light of frictions and fluctuations, compared to other instruments, a carbon price (i.e. tax) is associated with lower volatility in output and consumption. In terms of aggregate welfare, price instruments are found to be preferable. Conditional on the distribution of revenues from climate policies, quantity instruments can exert regressive effects, posing a larger economic loss on wealth-poor households, whereas price instruments are moderately progressive. Finally, we find that unexpected changes in climate policies can induce substantial aggregate adjustments. With uncertainty about the carbon budget, the costs of adjustment are larger under quantity instruments. T3 - CEPA Discussion Papers - 33 KW - Macroeconomic Dynamics KW - Environmental Policy KW - Inequality KW - Policy Design Y1 - 2021 U6 - http://nbn-resolving.de/urn/resolver.pl?urn:nbn:de:kobv:517-opus4-508950 SN - 2628-653X IS - 33 ER - TY - RPRT A1 - Caliendo, Marco A1 - Schröder, Carsten A1 - Wittbrodt, Linda T1 - The Causal Effects of the Minimum Wage Introduction in Germany BT - An Overview T2 - CEPA Discussion Papers N2 - In 2015, Germany introduced a statutory hourly minimum wage that was not only universally binding but also set at a relatively high level. We discuss the short-run effects of this new minimum wage on a wide set of socio-economic outcomes, such as employment and working hours, earnings and wage inequality, dependent and self-employment, as well as reservation wages and satisfaction. We also discuss difficulties in the implementation of the minimum wage and the measurement of its effects related to non-compliance and suitability of data sources. Two years after the minimum wage introduction, the following conclusions can be drawn: while hourly wages increased for low-wage earners, some small negative employment effects are also identifiable. The effects on aspired goals, such as poverty and inequality reduction, have not materialized in the short run. Instead, a tendency to reduce working hours is found, which alleviates the desired positive impact on monthly income. Additionally, the level of non-compliance was substantial in the short run, thus drawing attention to problems when implementing such a wide-reaching policy. T3 - CEPA Discussion Papers - 1 KW - Minimum Wage KW - Evaluation KW - Earnings KW - Working Hours KW - Employment Y1 - 2019 U6 - http://nbn-resolving.de/urn/resolver.pl?urn:nbn:de:kobv:517-opus4-426929 SN - 2628-653X IS - 1 ER - TY - RPRT A1 - Schrauth, Philipp T1 - The Causal Effect of Cycling Infrastructure on Traffic and Accidents BT - Evidence from Pop-up Bike Lanes in Berlin T2 - CEPA Discussion Papers N2 - This paper analyzes the effect of new bicycle lanes on traffic volume, congestion, and accidents. Crucially, the new bike lanes replace existing car lanes thereby reducing available space for motorized traffic. In order to obtain causal estimates, I exploit the quasi-random timing and location of the newly built cycle lanes. Using an event study design, a two-way fixed effects model and the synthetic control group method on geo-coded data, I show that the construction of pop-up bike lanes significantly reduced average car speed by 8 to 12 percentage points (p.p.) and up to 16 p.p. in peak traffic hours. In contrast, the results for car volume are modest, while the data does not allow for a conclusive judgment of accidents. T3 - CEPA Discussion Papers - 48 KW - congestion KW - urban KW - traffic KW - environment KW - cycling KW - health KW - COVID-19 KW - accidents Y1 - 2022 U6 - http://nbn-resolving.de/urn/resolver.pl?urn:nbn:de:kobv:517-opus4-553359 SN - 2628-653X IS - 48 ER - TY - RPRT A1 - Bruttel, Lisa Verena A1 - Felgendreher, Simon A1 - Güth, Werner A1 - Hertwig, Ralph T1 - Strategic ignorance in repeated prisoners’ dilemma experiments and its effects on the dynamics of voluntary cooperation T2 - CEPA Discussion Papers N2 - Being ignorant of key aspects of a strategic interaction can represent an advantage rather than a handicap. We study one particular context in which ignorance can be beneficial: iterated strategic interactions in which voluntary cooperation may be sustained into the final round if players voluntarily forego knowledge about the time horizon. We experimentally examine this option to remain ignorant about the time horizon in a finitely repeated two-person prisoners’ dilemma game. We confirm that pairs without horizon knowledge avoid the drop in cooperation that otherwise occurs toward the end of the game. However, this effect is superposed by cooperation declining more rapidly in pairs without horizon knowledge during the middle phase of the game, especially if players do not know that the other player also wanted to remain ignorant of the time horizon. T3 - CEPA Discussion Papers - 10 KW - strategic ignorance KW - cooperation KW - prisoners' dilemma KW - experiment Y1 - 2019 U6 - http://nbn-resolving.de/urn/resolver.pl?urn:nbn:de:kobv:517-opus4-431881 SN - 2628-653X IS - 10 ER - TY - RPRT A1 - Hinz, Julian A1 - Stammann, Amrei A1 - Wanner, Joschka T1 - State Dependence and Unobserved Heterogeneity in the Extensive Margin of Trade T2 - CEPA Discussion Papers N2 - We study the role and drivers of persistence in the extensive margin of bilateral trade. Motivated by a stylized heterogeneous firms model of international trade with market entry costs, we consider dynamic three-way fixed effects binary choice models and study the corresponding incidental parameter problem. The standard maximum likelihood estimator is consistent under asymptotics where all panel dimensions grow at a constant rate, but it has an asymptotic bias in its limiting distribution, invalidating inference even in situations where the bias appears to be small. Thus, we propose two different bias-corrected estimators. Monte Carlo simulations confirm their desirable statistical properties. We apply these estimators in a reassessment of the most commonly studied determinants of the extensive margin of trade. Both true state dependence and unobserved heterogeneity contribute considerably to trade persistence and taking this persistence into account matters significantly in identifying the effects of trade policies on the extensive margin. T3 - CEPA Discussion Papers - 36 KW - dynamic binary choice KW - extensive margin KW - high-dimensional fixed effects KW - incidental parameter bias correction KW - trade policy Y1 - 2021 U6 - http://nbn-resolving.de/urn/resolver.pl?urn:nbn:de:kobv:517-opus4-511919 SN - 2628-653X ER - TY - RPRT A1 - Caliendo, Marco A1 - Mahlstedt, Robert A1 - van den Berg, Gerard J. A1 - Vikström, Johan T1 - Side Effects of Labor Market Policies T2 - CEPA Discussion Papers N2 - Labor market policy tools such as training and sanctions are commonly used to help bring workers back to work. By analogy to medical treatments, the individual exposure to these tools may have side effects. We study effects on health using individual-level population registers on labor market events outcomes, drug prescriptions and sickness absence, comparing outcomes before and after exposure to training and sanctions. We find that training improves cardiovascular and mental health and lowers sickness absence. The results suggest that this is not due to improved employment prospects but rather to instantaneous features of participation such as, perhaps, the adoption of a more rigorous daily routine. Unemployment benefits sanctions cause a short-run deterioration of mental health, possibly due higher stress levels, but this tapers out quickly. T3 - CEPA Discussion Papers - 22 KW - unemployment KW - health KW - sickness KW - prescriptions KW - mental health KW - drugs KW - training KW - depression KW - cardiovascular disease KW - sanctions Y1 - 2020 U6 - http://nbn-resolving.de/urn/resolver.pl?urn:nbn:de:kobv:517-opus4-478839 SN - 2628-653X IS - 22 ER - TY - RPRT A1 - Caliendo, Marco A1 - Kritikos, Alexander A1 - Rodriguez, Daniel A1 - Stier, Claudia T1 - Self-Efficacy and Entrepreneurial Performance of Start-Ups T2 - CEPA Discussion Papers N2 - Self-efficacy reflects the self-belief that one can persistently perform difficult and novel tasks while coping with adversity. As such beliefs reflect how individuals behave, think, and act, they are key for successful entrepreneurial activities. While existing literature mainly analyzes the influence of the task-related construct of entrepreneurial self-efficacy, we take a different perspective and investigate, based on a representative sample of 1,405 German business founders, how the personality characteristic of generalized self-efficacy influences start-up performance as measured by a broad set of business outcomes up to 19 months after business creation. Outcomes include start-up survival and entrepreneurial income, as well as growth-oriented outcomes such as job creation and innovation. We find statistically significant and economically important positive effects of high scores of self-efficacy on start-up survival and entrepreneurial income, which become even stronger when focusing on the growth-oriented outcome of innovation. Furthermore, we observe that generalized self-efficacy is similarly distributed between female and male business founders, with effects being partly stronger for female entrepreneurs. Our findings are important for policy instruments that are meant to support firm growth by facilitating the design of more target-oriented offers for training, coaching, and entrepreneurial incubators. T3 - CEPA Discussion Papers - 61 KW - entrepreneurship KW - firm performance KW - general self-efficacy KW - survival KW - job creation KW - innovation Y1 - 2023 U6 - http://nbn-resolving.de/urn/resolver.pl?urn:nbn:de:kobv:517-opus4-572527 SN - 2628-653X IS - 61 ER - TY - RPRT A1 - Gallego Granados, Patricia A1 - Wrohlich, Katharina T1 - Selection into Employment and the Gender Wage Gap across the Distribution and Over Time T2 - CEPA Discussion Papers N2 - Using quantile regression methods, this paper analyses the gender wage gap across the wage distribution and over time (1990–2014), while controlling for changing sample selection into full-time employment. Our findings show that the selection-corrected gender wage gap is much larger than the one observed in the data, which is mainly due to large positive selection of women into full-time employment. However, we show that selection-corrected wages of male and female workers at the lower half of the distribution have moderately converged over time. The reason for this development have been changes in the composition of the male full-time employment force over time, which in spite of the rather constant male full-time employment rate, have given place to a small but rising selection bias in male observed wages. In the upper half of the wage distribution, however, neither the observed nor the selection-corrected gender wage gap has narrowed over time. T3 - CEPA Discussion Papers - 15 KW - gender wage gap KW - quantile regression KW - selection into employment Y1 - 2020 U6 - http://nbn-resolving.de/urn/resolver.pl?urn:nbn:de:kobv:517-opus4-441691 SN - 2628-653X IS - 15 ER - TY - RPRT A1 - Caliendo, Marco A1 - Cobb-Clark, Deborah A. A1 - Obst, Cosima A1 - Uhlendorff, Arne T1 - Risk Preferences and Training Investments T2 - CEPA Discussion Papers N2 - We analyze workers’ risk preferences and training investments. Our conceptual framework differentiates between the investment risk and insurance mechanisms underpinning training decisions. Investment risk leads risk-averse workers to train less; they undertake more training if it insures them against future losses. We use the German Socio-Economic Panel (SOEP) to demonstrate that risk affinity is associated with more training, implying that, on average, investment risks dominate the insurance benefits of training. Crucially, this relationship is evident only for general training; there is no relationship between risk attitudes and specific training. Thus, as expected, risk preferences matter more when skills are transferable – and workers have a vested interest in training outcomes – than when they are not. Finally, we provide evidence that the insurance benefits of training are concentrated among workers with uncertain employment relationships or limited access to public insurance schemes. T3 - CEPA Discussion Papers - 23 KW - Human Capital Investment KW - Work-related Training KW - Risk Preferences Y1 - 2020 U6 - http://nbn-resolving.de/urn/resolver.pl?urn:nbn:de:kobv:517-opus4-480927 SN - 2628-653X IS - 23 ER - TY - RPRT A1 - Huber, Katrin A1 - Rolvering, Geske T1 - Public child care and mothers’ career trajectories T2 - CEPA Discussion Papers N2 - This paper studies the effect of public child care on mothers’ career trajectories. To this end, we combine county-level data on child care coverage with detailed individual-level information from the German social security records and exploit a set of German reforms leading to a substantial temporal and spatial variation in child care coverage for children under the age of three. We conduct an event study approach that investigates the labor market outcomes of mothers in the years around the birth of their first child. We thereby explore career trajectories, both in terms of quantity and quality of employment. We find that public child care improves maternal labor supply in the years immediately following childbirth. However, the results on quality-related outcomes suggest that the effect of child care provision does not reach far beyond pure employment effects. These results do not change for mothers with different ‘career costs of children’. T3 - CEPA Discussion Papers - 64 KW - child care KW - maternal employment KW - career costs of children KW - women’s careers Y1 - 2023 U6 - http://nbn-resolving.de/urn/resolver.pl?urn:nbn:de:kobv:517-opus4-587310 SN - 2628-653X IS - 64 ER - TY - RPRT A1 - Borck, Rainald A1 - Oshiro, Jun A1 - Satō, Yasuhiro T1 - Property tax competition BT - A quantitative assessment T2 - CEPA Discussion Papers N2 - We develop a model of property taxation and characterize equilibria under three alternative taxa-tion regimes often used in the public finance literature: decentralized taxation, centralized taxation, and “rent seeking” regimes. We show that decentralized taxation results in inefficiently high tax rates, whereas centralized taxation yields a common optimal tax rate, and tax rates in the rent-seeking regime can be either inefficiently high or low. We quantify the effects of switching from the observed tax system to the three regimes for Japan and Germany. The decentralized or rent-seeking regime best describes the Japanese tax system, whereas the centralized regime does so for Germany. We also quantify the welfare effects of regime changes. T3 - CEPA Discussion Papers - 52 KW - property taxes KW - tax competition KW - efficiency Y1 - 2022 U6 - http://nbn-resolving.de/urn/resolver.pl?urn:nbn:de:kobv:517-opus4-562228 SN - 2628-653X ER - TY - RPRT A1 - Bruttel, Lisa Verena A1 - Eisenkopf, Gerald A1 - Nithammer, Juri T1 - Pre-election communication in public good games with endogenous leaders T2 - CEPA Discussion Papers N2 - Leadership plays an important role for the efficient and fair solution of social dilemmas but the effectiveness of a leader can vary substantially. Two main factors of leadership impact are the ability to induce high contributions by all group members and the (expected) fair use of power. Participants in our experiment decide about contributions to a public good. After all contributions are made, the leader can choose how much of the joint earnings to assign to herself; the remainder is distributed equally among the followers. Using machine learning techniques, we study whether the content of initial open statements by the group members predicts their behavior as a leader and whether groups are able to identify such clues and endogenously appoint a “good” leader to solve the dilemma. We find that leaders who promise fairness are more likely to behave fairly, and that followers appoint as leaders those who write more explicitly about fairness and efficiency. However, in their contribution decision, followers focus on the leader’s first-move contribution and place less importance on the content of the leader’s statements. T3 - CEPA Discussion Papers - 73 KW - leadership KW - public good KW - voting KW - experiment KW - promises Y1 - 2024 U6 - http://nbn-resolving.de/urn/resolver.pl?urn:nbn:de:kobv:517-opus4-623952 SN - 2628-653X IS - 73 ER - TY - RPRT A1 - Borck, Rainald A1 - Schrauth, Philipp T1 - Population density and urban air quality T2 - CEPA Discussion Papers N2 - We use panel data from Germany to analyze the effect of population density on urban air pollution (nitrogen oxides, particulate matter and ozone). To address unobserved heterogeneity and omitted variables, we present long difference/fixed effects estimates and instrumental variables estimates, using historical population and soil quality as instruments. Our preferred estimates imply that a one-standard deviation increase in population density increases air pollution by 3-12%. T3 - CEPA Discussion Papers - 8 KW - population density KW - air pollution Y1 - 2019 U6 - http://nbn-resolving.de/urn/resolver.pl?urn:nbn:de:kobv:517-opus4-427719 SN - 2628-653X IS - 8 ER - TY - RPRT A1 - Kalkuhl, Matthias A1 - Franks, Max A1 - Gruner, Friedemann A1 - Lessmann, Kai A1 - Edenhofer, Ottmar T1 - Pigou’s Advice and Sisyphus’ Warning BT - Carbon Pricing with Non-Permanent Carbon-Dioxide Removal T2 - CEPA Discussion Papers N2 - Carbon dioxide removal from the atmosphere is becoming an important option to achieve net zero climate targets. This paper develops a welfare and public economics perspective on optimal policies for carbon removal and storage in non-permanent sinks like forests, soil, oceans, wood products or chemical products. We derive a new metric for the valuation of non-permanent carbon storage, the social cost of carbon removal (SCC-R), which embeds also the conventional social cost of carbon emissions. We show that the contribution of CDR is to create new carbon sinks that should be used to reduce transition costs, even if the stored carbon is released to the atmosphere eventually. Importantly, CDR does not raise the ambition of optimal temperature levels unless initial atmospheric carbon stocks are excessively high. For high initial atmospheric carbon stocks, CDR allows to reduce the optimal temperature below initial levels. Finally, we characterize three different policy regimes that ensure an optimal deployment of carbon removal: downstream carbon pricing, upstream carbon pricing, and carbon storage pricing. The policy regimes differ in their informational and institutional requirements regarding monitoring, liability and financing. T3 - CEPA Discussion Papers - 62 KW - Carbon Dioxide Removal KW - Carbon Capture KW - Social Cost of Carbon KW - Climate Policy KW - Impermanence Y1 - 2023 U6 - http://nbn-resolving.de/urn/resolver.pl?urn:nbn:de:kobv:517-opus4-575882 SN - 2628-653X IS - 62 ER - TY - RPRT A1 - Frodermann, Corinna A1 - Wrohlich, Katharina A1 - Zucco, Aline T1 - Parental Leave Reform and Long-run Earnings of Mothers T2 - CEPA Discussion Papers N2 - Paid parental leave schemes have been shown to increase women’s employment rates but decrease their wages in case of extended leave durations. In view of these potential trade-offs, many countries are discussing the optimal design of parental leave policies. We analyze the impact of a major parental leave reform on mothers’ long-term earnings. The 2007 German parental leave reform replaced a means-tested benefit with a more generous earnings-related benefit that is granted for a shorter period of time. Additionally, a “daddy quota” of two months was introduced. To identify the causal effect of this policy on long-run earnings of mothers, we use a difference-in-difference approach that compares labor market outcomes of mothers who gave birth just before and right after the reform and nets out seasonal effects by including the year before. Using administrative social security data, we confirm previous findings and show that the average duration of employment interruptions increased for high-income mothers. Nevertheless, we find a positive long-run effect on earnings for mothers in this group. This effect cannot be explained by changes in working hours, observed characteristics, changes in employer stability or fertility patterns. Descriptive evidence suggests that the stronger involvement of fathers, incentivized by the “daddy months”, could have facilitated mothers’ re-entry into the labor market and thereby increased earnings. For mothers with low prior-to-birth earnings, however, we do not find any beneficial labor market effects of this parental leave reform. T3 - CEPA Discussion Papers - 16 KW - parental leave KW - wages KW - labor supply Y1 - 2020 U6 - http://nbn-resolving.de/urn/resolver.pl?urn:nbn:de:kobv:517-opus4-443188 SN - 2628-653X IS - 16 ER - TY - RPRT A1 - Caliendo, Marco A1 - Graeber, Daniel A1 - Kritikos, Alexander A1 - Seebauer, Johannes T1 - Pandemic Depression: COVID-19 and the Mental Health of the Self-Employed T2 - CEPA Discussion Papers N2 - We investigate the effect of the COVID-19 pandemic on self-employed people’s mental health. Using representative longitudinal survey data from Germany, we reveal differential effects by gender: whereas self-employed women experienced a substantial deterioration in their mental health, self-employed men displayed no significant changes up to early 2021. Financial losses are important in explaining these differences. In addition, we find larger mental health responses among self-employed women who were directly affected by government-imposed restrictions and bore an increased childcare burden due to school and daycare closures. We also find that self-employed individuals who are more resilient coped better with the crisis. T3 - CEPA Discussion Papers - 46 KW - self-employment KW - COVID-19 KW - mental health KW - gender KW - representative longitudinal survey data KW - PHQ-4 score KW - resilience Y1 - 2022 U6 - http://nbn-resolving.de/urn/resolver.pl?urn:nbn:de:kobv:517-opus4-548999 SN - 2628-653X IS - 46 ER - TY - RPRT A1 - Franks, Max A1 - Kalkuhl, Matthias A1 - Lessmann, Kai T1 - Optimal Pricing for Carbon Dioxide Removal Under Inter-Regional Leakage T2 - CEPA Discussion Papers N2 - Carbon dioxide removal (CDR) moves atmospheric carbon to geological or land-based sinks. In a first-best setting, the optimal use of CDR is achieved by a removal subsidy that equals the optimal carbon tax and marginal damages. We derive second-best subsidies for CDR when no global carbon price exists but a national government implements a unilateral climate policy. We find that the optimal carbon tax differs from an optimal CDR subsidy because of carbon leakage, terms-of-trade and fossil resource rent dynamics. First, the optimal removal subsidy tends to be larger than the carbon tax because of lower supply-side leakage on fossil resource markets. Second, terms-of-trade effects exacerbate this wedge for net resource exporters, implying even larger removal subsidies. Third, the optimal removal subsidy may fall below the carbon tax for resource-poor countries when marginal environmental damages are small. T3 - CEPA Discussion Papers - 43 KW - carbon pricing KW - trade KW - unilateral climate policy KW - terms-of-trade effects KW - removal subsidies Y1 - 2022 U6 - http://nbn-resolving.de/urn/resolver.pl?urn:nbn:de:kobv:517-opus4-538080 SN - 2628-653X IS - 43 ER - TY - RPRT A1 - Hänsel, Martin C. A1 - Franks, Max A1 - Kalkuhl, Matthias A1 - Edenhofer, Ottmar T1 - Optimal carbon taxation and horizontal equity BT - A welfare-theoretic approach with application to German household data T2 - CEPA Discussion Papers N2 - We develop a model of optimal carbon taxation and redistribution taking into account horizontal equity concerns by considering heterogeneous energy efficiencies. By deriving first- and second-best rules for policy instruments including carbon taxes, transfers and energy subsidies, we then investigate analytically how horizontal equity is considered in the social welfare maximizing tax structure. We calibrate the model to German household data and a 30 percent emission reduction goal. Our results show that energy-intensive households should receive more redistributive resources than energy-efficient households if and only if social inequality aversion is sufficiently high. We further find that redistribution of carbon tax revenue via household-specific transfers is the first-best policy. Equal per-capita transfers do not suffer from informational problems, but increase mitigation costs by around 15 percent compared to the first- best for unity inequality aversion. Adding renewable energy subsidies or non-linear energy subsidies, reduces mitigation costs further without relying on observability of households’ energy efficiency. T3 - CEPA Discussion Papers - 28 KW - carbon price KW - horizontal equity KW - redistribution KW - renewable energy subsidies KW - climate policy KW - just transition Y1 - 2021 U6 - http://nbn-resolving.de/urn/resolver.pl?urn:nbn:de:kobv:517-opus4-498128 SN - 2628-653X IS - 28 ER - TY - RPRT A1 - Blanz, Alkis A1 - Eydam, Ulrich A1 - Heinemann, Maik A1 - Kalkuhl, Matthias T1 - Optimal carbon pricing with fluctuating energy prices — emission targeting vs. price targeting T2 - CEPA Discussion Papers N2 - Prices of primary energy commodities display marked fluctuations over time. Market-based climate policy instruments (e.g., emissions pricing) create incentives to reduce energy consumption by increasing the user cost of fossil energy. This raises the question of whether climate policy should respond to fluctuations in fossil energy prices? We study this question within an environmental dynamic stochastic general equilibrium (E-DSGE) model calibrated on the German economy. Our results indicate that the welfare implications of dynamic emissions pricing crucially depend on how the revenues are used. When revenues are fully absorbed, a reduction in emissions prices stabilizes the economy in response to energy price shocks. However, when revenues are at least partially recycled, a stable emissions price improves overall welfare. This result is robust to different modeling assumptions. T3 - CEPA Discussion Papers - 51 KW - energy prices KW - E-DSGE KW - climate policy KW - welfare Y1 - 2022 U6 - http://nbn-resolving.de/urn/resolver.pl?urn:nbn:de:kobv:517-opus4-561049 SN - 2628-653X IS - 51 ER - TY - RPRT A1 - Matthewes, Sönke Hendrik A1 - Ventura, Guglielmo T1 - On Track to Success? BT - Returns to Vocational Education Against Different Alternatives T2 - CEPA Discussion Papers N2 - Many countries consider expanding vocational curricula in secondary education to boost skills and labour market outcomes among non-university-bound students. However, critics fear this could divert other students from more profitable academic education. We study labour market returns to vocational education in England, where until recently students chose between a vocational track, an academic track and quitting education at age 16. Identification is challenging because self-selection is strong and because students’ next-best alternatives are unknown. Against this back- drop, we leverage multiple instrumental variables to estimate margin-specific treatment effects, i.e., causal returns to vocational education for students at the margin with academic education and, separately, for students at the margin with quitting education. Identification comes from variation in distance to the nearest vocational provider conditional on distance to the nearest academic provider (and vice-versa), while controlling for granular student, school and neighbourhood characteristics. The analysis is based on population-wide administrative education data linked to tax records. We find that the vast majority of marginal vocational students are indifferent be- tween vocational and academic education. For them, vocational enrolment substantially decreases earnings at age 30. This earnings penalty grows with age and is due to wages, not employment. However, consistent with comparative advantage, the penalty is smaller for students with higher revealed preferences for the vocational track. For the few students at the margin with no further education, we find merely tentative evidence of increased employment and earnings from vocational enrolment. T3 - CEPA Discussion Papers - 58 KW - vocational education KW - returns to education KW - multi-valued treatment KW - instrumental variables Y1 - 2022 U6 - http://nbn-resolving.de/urn/resolver.pl?urn:nbn:de:kobv:517-opus4-567253 SN - 2628-653X IS - 58 ER - TY - RPRT A1 - Caliendo, Marco A1 - Tübbicke, Stefan T1 - New Evidence on Long-Term Effects of Start-Up Subsidies BT - Matching Estimates and their Robustness T2 - CEPA Discussion Papers N2 - The German start-up subsidy (SUS) program for the unemployed has recently undergone a major make-over, altering its institutional setup, adding an additional layer of selection and leading to ambiguous predictions of the program’s effectiveness. Using propensity score matching (PSM) as our main empirical approach, we provide estimates of long-term effects of the post-reform subsidy on individual employment prospects and labor market earnings up to 40 months after entering the program. Our results suggest large and persistent long-term effects of the subsidy on employment probabilities and net earned income. These effects are larger than what was estimated for the pre-reform program. Extensive sensitivity analyses within the standard PSM framework reveal that the results are robust to different choices regarding the implementation of the weighting procedure and also with respect to deviations from the conditional independence assumption. As a further assessment of the results’ sensitivity, we go beyond the standard selection-on-observables approach and employ an instrumental variable setup using regional variation in the likelihood of receiving treatment. Here, we exploit the fact that the reform increased the discretionary power of local employment agencies in allocating active labor market policy funds, allowing us to obtain a measure of local preferences for SUS as the program of choice. The results based on this approach give rise to similar estimates. Thus, our results indicating that SUS are still an effective active labor market program after the reform do not appear to be driven by “hidden bias”. T3 - CEPA Discussion Papers - 6 KW - Start-Up Subsidies KW - Policy Reform KW - Matching KW - Instrumental Variables Y1 - 2019 U6 - http://nbn-resolving.de/urn/resolver.pl?urn:nbn:de:kobv:517-opus4-426798 SN - 2628-653X IS - 6 ER - TY - RPRT A1 - Felfe, Christina A1 - Kocher, Martin A1 - Rainer, Helmut A1 - Saurer, Judith A1 - Siedler, Thomas T1 - More Opportunity, More Cooperation? BT - The Behavioral Effects of Birthright Citizenship on Immigrant Youth T2 - CEPA Discussion Papers N2 - Inequality of opportunity, particularly when overlaid with socioeconomic, ethnic, or cultural differences, may limit the scope of cooperation between individuals. A central question, then, is how to overcome such obstacles to cooperation. We study this question in the context of Germany, by asking whether the propensity of immigrant youth to cooperate with native peers was affected by a major integration reform: the introduction of birthright citizenship. Our unique setup exploits data from a large-scale lab-in-the-field experiment in a quasi-experimental evaluation framework. We find that the policy caused male, but not female, immigrants to significantly increase their cooperativeness toward natives. We show that the increase in out-group cooperation among immigrant boys is an outcome of more trust rather than a reflection of stronger other- regarding preferences towards natives. In exploring factors that may explain these behavioral effects, we present evidence that the policy also led to a near-closure of the educational achievement gap between young immigrant men and their native peers. Our results highlight that, through integration interventions, governments can modify prosocial behavior in a way that generates higher levels of efficiency in the interaction between social groups. T3 - CEPA Discussion Papers - 32 Y1 - 2021 U6 - http://nbn-resolving.de/urn/resolver.pl?urn:nbn:de:kobv:517-opus4-508643 SN - 2628-653X IS - 32 ER - TY - RPRT A1 - Bruttel, Lisa Verena A1 - Bulutay, Muhammed A1 - Cornand, Camille A1 - Heinemann, Frank A1 - Zylbersztejn, Adam T1 - Measuring strategic-uncertainty attitudes T2 - CEPA Discussion Papers N2 - Strategic uncertainty is the uncertainty that players face with respect to the purposeful behavior of other players in an interactive decision situation. Our paper develops a new method for measuring strategic-uncertainty attitudes and distinguishing them from risk and ambiguity attitudes. We vary the source of uncertainty (whether strategic or not) across conditions in a ceteris paribus manner. We elicit certainty equivalents of participating in two strategic 2x2 games (a stag-hunt and a market-entry game) as well as certainty equivalents of related lotteries that yield the same possible payoffs with exogenously given probabilities (risk) and lotteries with unknown probabilities (ambiguity). We provide a structural model of uncertainty attitudes that allows us to measure a preference for or an aversion against the source of uncertainty, as well as optimism or pessimism regarding the desired outcome. We document systematic attitudes towards strategic uncertainty that vary across contexts. Under strategic complementarity [substitutability], the majority of participants tend to be pessimistic [optimistic] regarding the desired outcome. However, preferences for the source of uncertainty are distributed around zero. T3 - CEPA Discussion Papers - 54 KW - risk attitudes KW - ambiguity attitudes KW - strategic-uncertainty attitudes KW - stag-hunt game KW - market-entry game Y1 - 2022 U6 - http://nbn-resolving.de/urn/resolver.pl?urn:nbn:de:kobv:517-opus4-562340 SN - 2628-653X IS - 54 ER - TY - RPRT A1 - Caliendo, Marco A1 - Cobb-Clark, Deborah A. A1 - Pfeifer, Harald A1 - Uhlendorff, Arne A1 - Wehner, Caroline T1 - Managers’ Risk Preferences and Firm Training Investments T2 - CEPA Discussion Papers N2 - We provide the first estimates of the impact of managers’ risk preferences on their training allocation decisions. Our conceptual framework links managers’ risk preferences to firms’ training decisions through the bonuses they expect to receive. Risk-averse managers are expected to select workers with low turnover risk and invest in specific rather than general training. Empirical evidence supporting these predictions is provided using a novel vignette study embedded in a nationally representative survey of firm managers. Risk-tolerant and risk-averse decision makers have significantly different training preferences. Risk aversion results in increased sensitivity to turnover risk. Managers who are risk-averse offer significantly less general training and, in some cases, are more reluctant to train workers with a history of job mobility. All managers, irrespective of their risk preferences, are sensitive to the investment risk associated with training, avoiding training that is more costly or targets those with less occupational expertise or nearing retirement. This suggests the risks of training are primarily due to the risk that trained workers will leave the firm (turnover risk) rather than the risk that the benefits of training do not outweigh the costs (investment risk). T3 - CEPA Discussion Papers - 44 KW - Manager Decisions KW - Employee Training KW - Risk Attitudes KW - Human Capital Investments Y1 - 2022 U6 - http://nbn-resolving.de/urn/resolver.pl?urn:nbn:de:kobv:517-opus4-538439 SN - 2628-653X IS - 44 ER - TY - RPRT A1 - Müller, Kai-Uwe A1 - Neumann, Michael A1 - Wrohlich, Katharina T1 - Labor supply under participation and hours constraints BT - An extended structural model for policy evaluations T2 - CEPA Discussion Papers N2 - The paper extends a static discrete-choice labor supply model by adding participation and hours constraints. We identify restrictions by survey information on the eligibility and search activities of individuals as well as actual and desired hours. This provides for a more robust identification of preferences and constraints. Both, preferences and restrictions are allowed to vary by and are related through observed and unobserved characteristics. We distinguish various restrictions mechanisms: labor demand rationing, working hours norms varying across occupations, and insufficient public childcare on the supply side of the market. The effect of these mechanisms is simulated by relaxing different constraints at a time. We apply the empirical frame- work to evaluate an in-work benefit for low-paid parents in the German institutional context. The benefit is supposed to increase work incentives for secondary earners. Based on the structural model we are able to disentangle behavioral reactions into the pure incentive effect and the limiting impact of constraints at the intensive and extensive margin. We find that the in-work benefit for parents substantially increases working hours of mothers of young children, especially when they have a low education. Simulating the effects of restrictions shows their substantial impact on employment of mothers with young children. T3 - CEPA Discussion Papers - 3 KW - labor supply KW - hours restrictions KW - involuntary unemployment KW - gender Y1 - 2019 U6 - http://nbn-resolving.de/urn/resolver.pl?urn:nbn:de:kobv:517-opus4-427656 SN - 2628-653X IS - 3 ER - TY - RPRT A1 - Obst, Cosima T1 - Job Satisfaction and Training Investments T2 - CEPA Discussion Papers N2 - Job satisfaction has been found to impact behavioral choices at the workplace. Since levels of satisfaction are not guaranteed to remain high, understanding the consequences of job dissatisfaction is essential. Hence, I analyze the relationship between a worker’s job satisfaction and her training investments. Based on my theoretical model, I expect a U-shaped relationship if dissatisfied workers attempt to improve the situation or plan to quit. In contrast, there is an overall positive relationship if dissatisfied workers neglect their duties. Using logit regressions with the Household, Income and Labour Dynamics in Australia (HILDA) survey I find tentative evidence that there is on average an overall positive relationship with a 1 standard deviation increase in job satisfaction being associated with a 1.5% increased likelihood of participating in training. A closer inspection of the reasons for training as well as quit intentions reveals some hints of a U-shaped relationship. My results highlight the importance of considering the source of dissatisfaction as there are heterogeneous effects along different job satisfaction facets. T3 - CEPA Discussion Papers - 47 KW - Human Capital Investment KW - Work-related Training KW - Job Satisfaction Y1 - 2022 U6 - http://nbn-resolving.de/urn/resolver.pl?urn:nbn:de:kobv:517-opus4-549124 SN - 2628-653X IS - 47 ER - TY - RPRT A1 - Späth, Maximilian T1 - It’s me again… Ask Avoidance and the Dynamics of Charitable Giving T2 - CEPA Discussion Papers N2 - Charities typically ask potential donors repeatedly for a donation. These repeated requests might trigger avoidance behavior. Considering that, this paper analyzes the impact of offering an ask avoidance option on charitable giving. In a proposed utility framework, the avoidance option decreases the social pressure to donate. At the same time, it induces feelings of gratitude toward the fundraiser, which may lead to a reciprocal increase in donations. The results of a lab experiment designed to disentangle the two channels show no negative impact of the option to avoid repeated asking on donations. Instead, the full model indicates a positive impact of the reciprocity channel. This finding suggests that it might be beneficial for charities to introduce an ask avoidance option during high-frequency fundraising campaigns. T3 - CEPA Discussion Papers - 38 KW - Charitable giving KW - Repeated request KW - Ask avoidance KW - Experiment Y1 - 2021 U6 - http://nbn-resolving.de/urn/resolver.pl?urn:nbn:de:kobv:517-opus4-520991 SN - 2628-653X IS - 38 ER - TY - RPRT A1 - Bruttel, Lisa Verena T1 - Is There a Loyalty-Enhancing Effect of Retroactive Price-Reduction Schemes? T2 - CEPA Discussion Papers N2 - This paper presents an experiment on the effect of retroactive price-reduction schemes on buyers’ repeated purchase decisions. Such schemes promise buyers a reduced price for all units that are bought in a certain time frame if the total quantity that is purchased passes a given threshold. This study finds a loyalty-enhancing effect of retroactive price-reduction schemes only if the buyers ex-ante expected that entering into the scheme would maximize their monetary gain, but later learn that they should leave the scheme. Furthermore, the effect crucially hinges on the framing of the price reduction. T3 - CEPA Discussion Papers - 5 KW - rebate and discount KW - buyer behavior KW - risk aversion KW - loss aversion KW - regulation of dominant firms KW - experiment Y1 - 2019 U6 - http://nbn-resolving.de/urn/resolver.pl?urn:nbn:de:kobv:517-opus4-427688 SN - 2628-653X IS - 5 ER - TY - RPRT A1 - Graeber, Daniel A1 - Hilbert, Viola A1 - König, Johannes T1 - Inequality of Opportunity in Wealth BT - Levels, Trends, and Drivers T2 - CEPA Discussion Papers N2 - While inequality of opportunity (IOp) in earnings is well studied, the literature on IOp in individual net wealth is scarce to non-existent. This is problematic because both theoretical and empirical evidence show that the position in the wealth and income distribution can significantly diverge.We measure ex-ante IOp in net wealth for Germany using data from the Socio-Economic Panel (SOEP). Ex-ante IOp is defined as the contribution of circumstances to the inequality in net wealth before effort is exerted. The SOEP allows for a direct mapping from individual circumstances to individual net wealth and for a detailed decomposition of net wealth inequality into a variety of circumstances; among them childhood background, intergenerational transfers, and regional characteristics. The ratio of inequality of opportunity to total inequality is stable from 2002 to 2019. This is in sharp contrast to labor earnings, where ex-ante IOp is declining over time. Our estimates suggest that about 62% of the inequality in net wealth is due to circumstances. The most important circumstances are intergenerational transfers, parental occupation, and the region of birth. In contrast, gender and individuals’ own education are the most important circumstances for earnings. T3 - CEPA Discussion Papers - 69 KW - inequality KW - wealth KW - inequality of opportunity KW - decomposition Y1 - 2023 U6 - http://nbn-resolving.de/urn/resolver.pl?urn:nbn:de:kobv:517-opus4-609673 SN - 2628-653X IS - 69 ER - TY - RPRT A1 - Bruttel, Lisa Verena A1 - Güth, Werner A1 - Nithammer, Juri A1 - Orland, Andreas T1 - Inefficient Cooperation under Stochastic and Strategic Uncertainty T2 - CEPA Discussion Papers N2 - Stochastic uncertainty can cause difficult coordination problems that may hinder mutually beneficial cooperation. We propose a mechanism of ex-post voluntary transfers designed to circumvent these coordination problems and ask whether it can do so. To test this, we implement a controlled laboratory experiment based on a repeatedly played Ultimatum Game with a stochastic endowment. Contrary to our hypothesis, we find that allowing voluntary transfers does not entail an efficiency increase. We suggest and analyze two main reasons for this finding: First, the stochastic uncertainty forces proposers to accept high strategic uncertainty if they intend to cooperate by claiming a low amount (which many proposers do not). Second, many responders behave only incompletely conditionally cooperative by transferring too little (which hinders cooperation in future periods). T3 - CEPA Discussion Papers - 20 KW - stochastic uncertainty KW - strategic uncertainty KW - cooperation KW - Ultimatum Game KW - experiment Y1 - 2020 U6 - http://nbn-resolving.de/urn/resolver.pl?urn:nbn:de:kobv:517-opus4-475500 SN - 2628-653X IS - 20 ER - TY - RPRT A1 - Eydam, Ulrich A1 - Diluiso, Francesca T1 - How to Redistribute the Revenues from Climate Policy? BT - A Dynamic Perspective with Financially Constrained Households T2 - CEPA Discussion Papers N2 - In light of climate change mitigation efforts, revenues from climate policies are growing, with no consensus yet on how they should be used. Potential efficiency gains from reducing distortionary taxes and the distributional implications of different revenue recycling schemes are currently debated. To account for households heterogeneity and dynamic trade-offs, we study the macroeconomic and welfare performance of different revenue recycling schemes using an Environmental Two-Agent New-Keynesian model, calibrated on the German economy. We find that, in the long run, welfare gains are higher when revenues are used to reduce distortionary taxes on capital, but this comes at the cost of higher inequality: while all households prefer labor income tax reductions to lump-sum transfers, only financially unconstrained households are better off when reducing taxes on capital income. Interestingly, we find that over the transition period relevant to meet short-medium run climate targets, labor income tax cuts are the most efficient and equitable instrument. T3 - CEPA Discussion Papers - 45 KW - double dividend KW - E-DSGE KW - environmental tax reform KW - non-Ricardian households KW - revenue recycling Y1 - 2022 U6 - http://nbn-resolving.de/urn/resolver.pl?urn:nbn:de:kobv:517-opus4-548960 SN - 2628-653X IS - 45 ER - TY - RPRT A1 - Andres, Maximilian A1 - Bruttel, Lisa Verena A1 - Friedrichsen, Jana T1 - How communication makes the difference between a cartel and tacit collusion BT - a machine learning approach T2 - CEPA Discussion Papers N2 - This paper sheds new light on the role of communication for cartel formation. Using machine learning to evaluate free-form chat communication among firms in a laboratory experiment, we identify typical communication patterns for both explicit cartel formation and indirect attempts to collude tacitly. We document that firms are less likely to communicate explicitly about price fixing and more likely to use indirect messages when sanctioning institutions are present. This effect of sanctions on communication reinforces the direct cartel-deterring effect of sanctions as collusion is more difficult to reach and sustain without an explicit agreement. Indirect messages have no, or even a negative, effect on prices. T3 - CEPA Discussion Papers - 53 KW - cartel KW - collusion KW - communication KW - machine learning KW - experiment Y1 - 2022 U6 - http://nbn-resolving.de/urn/resolver.pl?urn:nbn:de:kobv:517-opus4-562234 SN - 2628-653X ER - TY - RPRT A1 - Graeber, Daniel A1 - Schikora, Felicitas T1 - Hate is too great a burden to bear BT - Hate crimes and the mental health of refugees T2 - CEPA Discussion Papers N2 - Against a background of increasing violence against non-natives, we estimate the effect of hate crime on refugees’ mental health in Germany. For this purpose, we combine two datasets: administrative records on xenophobic crime against refugee shelters by the Federal Criminal Office and the IAB-BAMF-SOEP Survey of Refugees. We apply a regression discontinuity in time design to estimate the effect of interest. Our results indicate that hate crime has a substantial negative effect on several mental health indicators, including the Mental Component Summary score and the Patient Health Questionnaire-4 score. The effects are stronger for refugees with closer geographic proximity to the focal hate crime and refugees with low country-specific human capital. While the estimated effect is only transitory, we argue that negative mental health shocks during the critical period after arrival have important long-term consequences. Keywords: Mental health, hate crime, migration, refugees, human capital. T3 - CEPA Discussion Papers - 31 KW - mental health KW - hate crime KW - migration KW - refugees KW - human capital Y1 - 2021 U6 - http://nbn-resolving.de/urn/resolver.pl?urn:nbn:de:kobv:517-opus4-507972 SN - 2628-653X IS - 31 ER -