Completed Research Projects

While studies of global life evaluation mainly reaffirm the undesirable impacts of unemployment on subjective well-being, there are only few studies examining its impact on daily emotional experiences. In this project, we attempt to examine the impact of unemployment on different aspects of subjective well-being, particularly the emotional well-being experienced on a day-to-day basis and the channels through which unemployment influences these experiences, using micro data from the UK (UK Time-Use Survey) and the US (American Time-Use Survey). A previous study by Knabe et al. (2010) showed that unemployment is negatively linked to how individuals assess their general life and the level of pleasure they attain while doing an activity, but hardly has an effect on the emotional balance over the course of the day. The conflicting finding was obtained by Krueger and Mueller (2012) who reported that jobless people felt significantly sadder than employed people both in participation of specific activities and on an average of the day.

Building on these previous studies, we will extent this line of research in several dimensions. We take into account the differentiation of time-use and well-being by gender, by days of the weeks and by social contact possibilities. Furthermore, we will provide attempts to identify the origin and magnitude of saddening effect by examining the relationship between social contacts and time composition.

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The dissertation will deal with the interaction between the labor market and the family. In particular, the influence of family events on labor market decisions and vice versa will be examined. Aspects from economic happiness research will also be taken into account. The focus will be on empirical analysis.
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A large number of consumption decisions are made at household level. An individual's consumption and material standard of living always depends on the number and characteristics of the members of their household, for example due to economies of scale in household size and interpersonal differences in needs and preferences. Satisfaction research also shows that the subjective well-being of different household members influences each other - partly via interdependencies in consumption, but also via various psychological channels. The dissertation comprises a series of empirical studies that reveal such interdependencies in subjective well-being and subjective income assessment or use them to quantify interdependencies in consumption.
The first part of the research project includes two studies that determine equivalence scales in market income and thus interdependencies in market consumption on the basis of the income satisfaction reported by members of different types of households. The first study focuses in particular on the significance of reference effects in income assessment, the second on the consequences of measurement errors in household income.
The second part of the research project includes the essential component of time in the analysis by looking at the consumption of goods and services produced in the household. The first study in this sub-project examines the monetary costs of children depending on their parents' employment status on the basis of mothers' subjective income assessment. The second study estimates equivalence scales in extended income, i.e. the sum of market income and household production, using income satisfaction and time use data.
The third part of the dissertation deals with the effects of a change in the consumption-generating behavior of one household member on the subjective well-being of another. The first study shows the effect of an increase in the partner's household activities on satisfaction with the standard of living. The second study examines the influence of a parental job loss on the life satisfaction of adolescent children living in the household.
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It is widely known in the literature that job loss has a negative impact on a person's life satisfaction or health, for example. However, the effects of job loss extend not only to the individual who loses their job, but also to family members. The aim of this project is to investigate such effects. For example, the effects on the divorce rate or on the satisfaction of children are examined. The analysis is empirical. The study focuses on involuntary job losses in order to minimize both anticipation effects and interactions with unobserved factors.
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In the recent past, there have been numerous legal interventions in the flexibility of the German labor market. These include, for example, changes to protection against dismissal. The aim of the project is to investigate the effect of a change in dismissal protection on labor market policy variables. Panel data at micro and macro level are used for the empirical analysis.
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Work and unemployment play an important role in people's quality of life. Studies on life satisfaction have shown that unemployment is one of the life events that reduces satisfaction the most. In contrast, much less research has been done on how participation in active labor market policy measures affects subjective well-being. In this project, we want to analyze data on the cognitive and affective well-being of participants in work opportunities (1-euro jobs), which we collected ourselves using the Day Reconstruction Method, and compare these with satisfaction data from other sources (SOEP, PASS). Comparing this data with that of regular employees and the unemployed will allow us to draw conclusions about the effects of such measures on the subjective well-being of the participants and thus about the immediate benefits of such measures, i.e. those that occur independently of subsequent success in the labor market.
A second sub-project in this area will deal with the psychological effects of combined wages. A standard result of economic theory states that it does not matter in the long term whether wage subsidies are paid to employers or employees, as the pass-on processes on the market ultimately lead to identical results. However, this logic presupposes that it does not matter to the employee from which source they receive their income. However, the political discussion about supplementary benefits indicates that the receipt of supplementary social benefits is often perceived as stigmatizing and sometimes humiliating by those affected. The aim of this research project is to investigate whether negative effects of combined wages of this kind can be determined using the methods of satisfaction research. The aim is to determine whether similar effects occur when the combined wage is paid to the employer while the employee's total income remains the same. If the payment of wage supplements to employees is accompanied by negative psychological effects of this kind, this would weaken the benefits of this instrument. If these negative effects have a negative impact on the willingness to participate and motivation to work, the ability of this instrument to achieve positive employment effects would even be reduced. If these effects do not occur with employer subsidies, this would refute the theoretical equivalence of both instruments and argue in favor of the use of employer wage subsidies.
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This project deals with the determination of equivalence scales using subjective satisfaction data. In contrast to previous studies using this method, an explicit distinction is made between need effects and comparison effects that affect satisfaction. Theoretical considerations indicate that comparison effects lead to a biased estimation of the equivalence weights, which assigns too high a weight to adults and too low a weight to children. This hypothesis is to be tested empirically. In particular, it will be investigated whether the previously very low estimated equivalence weights of children can be explained by unaccounted comparative effects. In addition, the potential income dependence of the equivalence scale is to be taken into account.
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Since the mid-1990s, the German labour market has been characterized by rising wage inequality, which has been accompanied by an increase in the proportion of low-paid jobs. In the political debate, this development is associated with the concern that low wages lead those affected into a dead end of poor pay and an increased risk of poverty. In order to be able to assess the social impact of this development, a better understanding of the role of the low-wage sector for the individual employment prospects and the risk of poverty of those affected is necessary. However, initial empirical studies on the German low-wage sector do not support the fears of an employment-related dead end and instead see it as an instrument for combating unemployment. The aim of this research project is to empirically examine how taking up employment in the low-wage sector actually influences the employment prospects and poverty risk of those affected. To this end, it will be investigated whether a low-paid job can positively influence the prospects of a better-paid job and to what extent such an upward effect depends on the duration of employment in the low-wage sector. Furthermore, it is to be determined which adjustments are made in labor supply behavior in couple households when the labor market position of the spouse changes. Of particular interest here is whether in couple households one partner takes up a low-wage job as an instrument to compensate for exogenous labor market shocks, such as unemployment of the other partner. Furthermore, the connection between low wages and individual poverty risk will be examined. Of particular interest here is the question of whether the experience of poverty has an independent influence on the probability of remaining in low-paid work.
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In many European countries, trade unions play a decisive role in determining wage trends and working conditions. For the economic analysis of such collectively acting labor market actors, it is therefore necessary to explicitly depict the behavior of trade unions in theoretical models. In theoretical labor market economics, wage negotiations are generally modeled using the Nash bargaining solution. However, experimental studies have cast doubt on the empirical relevance of this bargaining solution.
The first part of this research project therefore examines the effects of the alternative application of the Kalai-Smorodinsky solution compared to the Nash solution in common theoretical labor market models. In the first part of the project, the Kalai-Smorodinsky solution is integrated into models of general equilibrium with imperfect competition as well as into search and matching models of the labor market and examined with regard to its impact on equilibrium unemployment and the possibility of influencing it through policy instruments. First results of this project show that the choice of bargaining solution can have critical effects on the evaluation of the impact of labor market policies, for example minimum wages.
In the second part of the project, these results will be tested empirically and experimentally. To this end, the theoretically derived hypothesis that even non-binding minimum wages can have a wage-increasing effect in Kalai-Smorodinsky negotiations is tested experimentally. To this end, wage negotiations are simulated in the laboratory in which a low minimum wage is introduced and successively increased in later rounds. Initial results show that the Kalai-Smorodinsky solution can actually describe wage negotiations observed in the laboratory better than the Nash solution.
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Satisfaction research shows that unemployment greatly reduces the subjective life satisfaction of those affected. At the same time, however, unemployment has hardly any effect on people's average emotional well-being during specific events (Knabe et al. 2010, Economic Journal). These two findings suggest that life satisfaction depends less on concrete experiences and more on the achievement of certain individual goals and the fulfillment of social norms.
As a test of this thesis, this research project will examine how retirement affects the life satisfaction of employed and unemployed people. Retirement is suitable for this study because, for the unemployed, retirement does not change the possibilities for shaping their everyday lives, but it does result in major changes to the system of social norms on the basis of which they evaluate their satisfaction. Unemployed people are expected to work - if possible - whereas this social expectation does not exist for pensioners. Therefore, if a strong increase in life satisfaction is observed when the unemployed retire compared to those who retire from employment, this would confirm the importance of social norms for life satisfaction.
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The German labour market is characterized by increasing wage inequality. The clearest sign of this development is the increase in low wages. Empirical studies investigate the significance of low wages for employment histories. The studies focus on the question of whether low-wage earners have better chances of finding regular employment in the future than the unemployed. These results are compared intertemporally and with other countries.
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In the recent past, there have been numerous legal interventions in the flexibility of the German labor market. These include, for example, changes to protection against dismissal. The dissertation examines the effect of a change in dismissal protection on labor market policy variables such as the level of unemployment. Panel data at micro and macro level are used for the empirical analysis.
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In diesem gemeinsamen Forschungsprojekt mit Mark Schopf (Universität Paderborn, Master-Absolvent der FWW) werden Aspekte des sogenannten „Grünen Paradoxons“ näher beleuchtet. Das Grüne Paradoxon beschreibt einen Effekt in der Umwelt- und Ressourcenökonomik, der von Hans-Werner Sinn (2009) so benannt und von ihm folgendermaßen beschrieben wird: „Wenn die Ressourceneigentümer erwarten, dass die grüne Politik im Laufe der Zeit immer grüner wird, wie es bislang der Fall war, dann wird die Rendite der im Boden belassenen Ressourcen verringert, und es entsteht ein Anreiz, diese Ressourcen möglichst schnell zu versilbern. Es kommt heute mehr CO2 in die Atmosphäre, die Erderwärmung beschleunigt sich. Das ist das grüne Paradoxon.“

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