Aggregate Unemployment Decreases Individual Returns to Education

On the basis of a theoretical model, we argue that higher aggregate unemployment affects individual returns to education. We therefore include aggregate unemployment and an interaction term between unemployment and the individual education level in a standard Mincer equation. Our results show that an increase in regional unemployment by 1% decreases the returns to education by 0.005 percentage points. This implies that higher skilled employees are better sheltered from labour market changes with respect to their jobs but encounter larger wage changes than less skilled employees. Differences in regional unemployment can in addition almost fully explain the observed large differences in regional returns to education. We use representative individual data and regional panel variation in unemployment between different German regions and for different employee groups. We demonstrate that our results are robust with respect to aggregation bias, time lags and potential endogeneity of the unemployment variable

Do higher corporate taxes reduce wages? : Micro evidence from Germany

Because of endogeneity problems very few studies have been able to identify the incidence of corporate taxes on wages. We circumvent these problems by using an 11-year panel of data on 11,441 German municipalities' tax rates, 8 percent of which change each year, linked to administrative matched employer-employee data. Consistent with our theoretical model, we find a negative effect of corporate taxation on wages: a 1 euro increase in tax liabilities yields a 77 cent decrease in the wage bill. The direct wage effect, arising in a collective bargaining context, dominates, while the conventional indirect wage effect through reduced investment is empirically small due to regional labor mobility. High and medium-skilled workers, who arguably extract higher rents in collective agreements, bear a larger share of the corporate tax burden

The prosurvival IKK-related kinase IKKϵ integrates LPS and IL17A signaling cascades to promote Wnt-dependent tumor development in the intestine

Constitutive Wnt signaling promotes intestinal cell proliferation, but signals from the tumor microenvironment are also required to support cancer development. The role that signaling proteins play to establish a tumor microenvironment has not been extensively studied. Therefore, we assessed the role of the proinflammatory Ikk-related kinase Ikkϵ in Wnt-driven tumor development. We found that Ikkϵ was activated in intestinal tumors forming upon loss of the tumor suppressor Apc. Genetic ablation of Ikkϵ in b-catenin-driven models of intestinal cancer reduced tumor incidence and consequently extended survival. Mechanistically, we attributed the tumor-promoting effects of Ikkϵ to limited TNF-dependent apoptosis in transformed intestinal epithelial cells. In addition, Ikkϵ was also required for lipopolysaccharide (LPS) and IL17A-induced activation of Akt, Mek1/2, Erk1/2, and Msk1. Accordingly, genes encoding proinflammatory cytokines, chemokines, and anti-microbial peptides were downregulated in Ikkϵ-deficient tissues, subsequently affecting the recruitment of tumor-associated macrophages and IL17A synthesis. Further studies revealed that IL17A synergized with commensal bacteria to trigger Ikkϵ phosphorylation in transformed intestinal epithelial cells, establishing a positive feedback loop to support tumor development. Therefore, TNF, LPS, and IL17A-dependent signaling pathways converge on Ikkϵ to promote cell survival and to establish an inflammatory tumor microenvironment in the intestine upon constitutive Wnt activation. � 2016 American Association for Cancer Research

Is Being 'Soft on Crime' the Solution to Rising Crime Rates? Evidence from Germany

Based on a theoretical framework on informal, custodial and non-custodial sentencing, the paper provides econometric tests on the effectiveness of police, public prosecution and courts. Using a unique dataset covering German states for the period 1977- 2001, a comprehensive system of criminal prosecution indicators is derived and subsequently related to the incidence of six major offence categories using panel-econometrics. Empirical evidence suggests that the criminal policy of diversion failed as increasing shares of dismissals by prosecutors and judges enhance crime rates in Germany. Crime is significantly deterred by higher clearance and conviction rates, while the effects of indicators representing type (fine, probation, imprisonment) and severity (length of prison sentence, amount of fine) of punishment are often small and insignificant