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 - Blanz, Alkis A1 - Eydam, Ulrich A1 - Heinemann, Maik A1 - Kalkuhl, Matthias A1 - Moretti, Nikolaj T1 - Fiscal Policy and Energy Price Shocks T2 - CEPA Discussion Papers N2 - The effects of energy price increases are heterogeneous between households and firms. Financially constrained poorer households, who spend a larger relative share of their income on energy, are particularly affected. In this analysis, we examine the macroeconomic and welfare effects of energy price shocks in the presence of credit-constrained households that have subsistence-level energy demand. Within a Dynamic Stochastic General Equilibrium (DSGE) model calibrated for the German economy, we compare the performance of different policy measures (transfers and energy subsidies) and different financing schemes (income tax vs. debt). Our results show that credit-constrained households prefer debt over tax financing regardless of the compensation measure due to their difficulty to smooth consumption. On the contrary, rich households tend to prefer tax-financed measures as they increase the labor supply of poor households. From an aggregate perspective, tax-financed measures targeting firms effectively cushion aggregate output losses. T3 - CEPA Discussion Papers - 70 KW - energy prices KW - E-DSGE KW - fiscal policy KW - welfare Y1 - 2023 U6 - http://nbn-resolving.de/urn/resolver.pl?urn:nbn:de:kobv:517-opus4-612763 SN - 2628-653X IS - 70 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 - Caliendo, Marco A1 - Rodríguez Guio, Daniel Felipe T1 - Divergent thinking and post-launch entrepreneurial outcomes BT - non-linearities and the moderating role of experience T2 - CEPA Discussion Papers N2 - Divergent thinking is the ability to produce numerous and diverse responses to questions or tasks, and it is used as a predictor of creative achievement. It plays a significant role in the business organization’s innovation process and the recognition of new business opportunities. Drawing upon the cumulative process model of creativity in entrepreneurship, we hypothesize that divergent thinking has a lasting effect on post-launch entrepreneurial outcomes related to innovation and growth, but that this relation might not always be linear. Additionally, we hypothesize that domain-specific experience has a moderating role in this relation. We test our hypotheses based on a representative longitudinal sample of 457 German business founders, which we observe up until 40 months after start-up. We find strong relative effects for innovation and growth outcomes. For survival we find conclusive evidence for non-linearities in the effects of divergent thinking. Additionally, we show that such effects are moderated by the type of domain-specific experience that entrepreneurs gathered pre-launch, as it shapes the individual’s ideational abilities to fit into more sophisticated strategies regarding entrepreneurial creative achievement. Our findings have relevant policy implications in characterizing and identifying business start-ups with growth and innovation potential, allowing a more efficient allocation of public and private funds. T3 - CEPA Discussion Papers - 68 KW - divergent thinking KW - entrepreneurial performance KW - survival KW - business expansion KW - innovation Y1 - 2023 U6 - http://nbn-resolving.de/urn/resolver.pl?urn:nbn:de:kobv:517-opus4-607408 SN - 2628-653X IS - 68 ER - TY - RPRT A1 - Späth, Maximilian A1 - Goller, Daniel T1 - Gender differences in investment reactions to irrelevant information T2 - CEPA Discussion Papers N2 - Economic agents often irrationally base their decision-making on irrelevant information. This research analyzes whether men and women react to futile information about past outcomes. For this purpose, we run a laboratory experiment (Study 1) and use field data (Study 2). In both studies, the behavior of men is consistent with falsely assumed negative autocorrelation, often referred to as gambler’s fallacy Women’s behavior aligns with falsely assumed positive autocorrelation, a notion of the hot hand fallacy. On the aggregate, the two fallacies cancel out. Even when individuals are, on average, rational, the biases in the decision-making of subgroups might cause inefficient outcomes. In a mediation analysis, we find that a) the agents stated perceived probabilities of future outcomes are not blurred by irrelevant information and b) about 40 % of the observed biases are driven by differences in the perceived attractiveness of available choices caused by the irrelevant information. T3 - CEPA Discussion Papers - 67 KW - hot hand fallacy KW - gambler’s fallac KW - gender KW - irrelevant information Y1 - 2023 U6 - http://nbn-resolving.de/urn/resolver.pl?urn:nbn:de:kobv:517-opus4-606351 SN - 2628-653X IS - 67 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 - 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 - 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 - 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 - 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 - 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 -