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

Ethnic diversity and labor market success

The economic potential of ethnic and cultural diversity is often underestimated. This paper summarizes a number of recent studies which show that 'soft' factors such as attitudes, perceptions and identities - and in particular ethnic identities - significantly affect economic outcomes. More specifically, the studies analyze the process of cultural integration over migrant generations as well as the process of job search and labor market reintegration of the unemployed. The economy can thus gain productivity and efficiency by recognizing and incorporating such multi-ethnic factors. Cultural assimilation that goes along with a loss of migrants' own cultural heritage does not appear to be the sole or dominant strategy of an economically successful integration. To tap the full potential of ethnic and cultural diversity, an increased cultural and ethnic open-mindedness of the native population is desirable

Positional Income Concerns: Prevalence and Relationship with Personality and Economic Preferences

This paper presents detailed evidence about who compares to whom in terms of relative income. We rely on representative survey data on the importance of income comparisons vis-á-vis seven reference groups, allowing us to exploit within-subject heterogeneity. We explore the prevalence and determinants of positional income concerns, investigating the role of personality and economic preferences. Our results establish robust relationships between positional income concerns and the personality traits agreeableness, conscientiousness, and neuroticism, some of which depend on the reference group. Furthermore, risk and fairness preferences are significantly correlated with positional income concerns

Theology and cosmology beyond the Big Bang theory

Wetensch. publicati

Earnings Assimilation of Immigrants in Germany: The Importance of Heterogeneity and Attrition Bias

Heterogeneity in the ethnic composition of Germany's immigrant population renders general conclusions on the degree of economic integration difficult. Using a rich longitudinal data-set, this paper tests for differences in economic assimilation profiles of four entry cohorts of foreign-born immigrants and ethnic Germans. The importance of time-invariant individual unobserved heterogeneity and panel attrition in determining the speed of assimilation is analysed. We find evidence for heterogeneity in the assimilation profiles and for robust assimilation profiles for two entry cohorts only. Omitted variables, systematic sample attrition and the presence of second generation immigrants in the sample influence the speed of assimilation, but do not change the overall picture

The German Part-Time Wage Gap: Bad News for Men?

Despite the increasing occurrence of part-time employment in Germany, the effects on wage rates are rarely studied. I therefore use GSOEP panel data from 1984 to 2010 and apply different econometric approaches and definitions of part-time work to measure the so-called part-time wage gap of both, men and women. A very robust finding is that part-time working men are subject to higher wage cuts than women. The specification accommodating all available information and the biasing effect of unobserved individual characteristics yields a wage cut of about 10 percent in West and East Germany. Furthermore, the type of contract makes a big difference. While marginal employees own lower wage rates, irrespective of region and sex, female part-time employees covered by social security have no significant drawback once differences in firm and job characteristics (in OLS regressions) or individual fixed-effects (in panel regressions) are taken into account. The results also reveal that work experience in part-time employment generates no positive returns, implying that reduced working hours do not only cause short-term effects. Another novel of my study is the look at the part-time wage gap over time. While there are good reasons to believe that the part-time wage gap shrinks, the empirical evidence reveals that wage differentials in West-Germany increased over time. This finding also surprises in light of the supposition that the wage penalty tends to be lower in times when part-time work is widespread and employers get accustomed to alternative working time schemes

Flexible working and unpaid overtime in the UK: The role of gender, parental and occupational status

Recent studies have shown that flexible boundaries between work and family may make employees work harder and longer. Yet most studies were not able to show whether there are differences across different types of flexible working arrangements, and whether this relationship may only hold for certain groups of workers. We examine how three different types of flexible working arrangements, that is schedule control, flexitime, and teleworking, are associated with an increase in unpaid overtime hours of workers in the UK using the Understanding Society data from 2010-2015 and fixed effects panel regression models. Results show that the flexible arrangements that were introduced primarily for work-life balance purposes, i.e., flexitime and teleworking, do not necessarily increase unpaid overtime hours significantly. On the other hand, workers’ control over their schedule, mainly introduced as a part of high-performance strategies, leads to increased unpaid overtime hours. This is especially true for professional men, and women without children, especially those working full-time, and surprisingly part-time working mothers. The results of this study point to the importance of distinguishing between different groups of workers as well as between different types of arrangements when examining outcomes of flexible working. Furthermore, the results of the study contribute to the argument that performance enhancing flexible working arrangements can potentially exacerbate gender inequalities in the labour market by enabling men to commit more time to their jobs, while for women, especially full-time working mothers, this may be less possible