New Publications

Labour: "When Protection Puts You in Jeopardy -- How Removing Small-Business Clauses Affects Employment Duration" (Lücke)

19.02.2018 -

New publication by Christine Lücke:

In a 2004 reform, Germany exempted small firms from dismissal protection. This paper estimates the effects of dismissal protection on the risk of leaving the establishment, taking advantage of the fact that workers employed before the amendment maintained their previous dismissal protection. Utilizing administrative linked employeremployee data, the results hint at a higher risk during the first 6 months in a job and a lower risk thereafter, if dismissal protection is provided. The estimated survivor curves suggest that even after 5 years the protecting effect of dismissal protection did not compensate the initially adverse effect during the first 6 months of tenure.


The publication can be found here.

LABOUR Review of Labour Economics and Industrial Relations

Applied Economics Letters: "There and back again - estimating equivalence scales with measurement error" (Borah, Knabe)

23.01.2018 -

New publication by Melanie Borah and Andreas Knabe:

Using income satisfaction data from the German Socio-Economic Panel, we find large differences in the equivalence weight of a partner when it is being estimated by direct and reverse regressions. We argue that neither of the two models will produce consistent estimates when there is stochastic error in satisfaction and measurement error in incomes. We propose a correction of mismeasured incomes using a constructed alternative income measure. The corrected results are relatively close to those obtained from direct regression. We do not find evidence that previous studies, using the direct regression method, severely suffer from measurement error in incomes.


The publication can be found here.

Applied Economic Letters

The Deutschlandrente: A concept for strengthening private funded retirement provision

04.10.2017 -

New publication by Andreas Knabe and Joachim Weimann:

Andreas Knabe and Joachim Weimann, together with the state government of Hesse, have developed a reform proposal for strengthening private funded retirement provision in Germany ("Deutschland-Rente"). In a new article, which has just been published in the ifo Schnelldienst, they discuss this concept in detail.


The publication can be found here.

ifo schnelldienst

CESifo Working Papers: "Reference Income Effects in the Determination of Equivalence Scales Using Income Satisfaction Data"

19.10.2016 -

New working paper by Melanie Borah, Andreas Knabe and Carina Kuhställer:

The authors investigate the importance of reference effects in the estimation of equivalence scales from data on income satisfaction.

 The study shows that the separation of needs-based and reference effects helps to overcome a potential bias that causes an overestimation of adults' and an underestimation of children's needs. This result is confirmed by conducting an empirical analysis of data from the German Socio-Economic Panel, where controlling for income comparisons eliminates the gap between equivalence scale parameters for adults and children.


The working paper can be found here.


Economics Bulletin: "Reconsidering the interrelated dynamics of unemployment and low-wage employment in Great Britain"

23.06.2016 -
New publication by Alexander Plum:

Stewart (2007, JAE) finds that being employed at low wages (compared to higher wages) increases the risk of future unemployment. The risk of unemployment does not differ significantly between current low-wage employment and current unemployment. The author concludes that 'in terms of future employment prospects, low wages are closer to unemployment than to higher-paid jobs' (p. 529). Alexander Plum shows in this paper that the result depends strongly on the thershold used to distinguish between high and low wages: applying this widely used OECD (1997) definition of low-wages substantially changes the findings of Steward (2007). With this threshold, Plum finds that low wages are helpful for significantly reducing the risk of future unemployment compared to unemployment. Moreover, the categorization of the unemployed, the included variables with reference to the educational background, the age and the age restrictions imposed on the sample and switching from gross hourly wages in nominal terms to real terms have an impact on the findings


The publication can be found here.

Economics Bulletin

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