Self-reported Satisfaction and the Economic Crisis of 2007-09 : How People in the UK and Germany Perceive a Severe Cyclical Downturn

Preprin

Does Marriage Pay More than Cohabitation?: Selection and Specialization Effects on Male Wages in Germany

Empirical research has unambiguously shown that married men receive higher wages than unmarried, whereas a wage premium for cohabiters is not as evident yet. Our paper exploits the observed difference between the marital and the cohabiting wage premium in Germany and thus provides new insights into their respective sources, typically explained by specialization (husbands being more productive because their wives take over household chores) or selection (high earnings potentials being more attractive on the marriage market). We analyze the cohabiting and the marital wage premium in Germany using a shifting panel design for marriages and move-ins from 1993 to 2004 in the German Socio-Economic Panel. With non-parametric matching models we match men who get married (treatment group I) with cohabiting or single men (control groups) and men who move in with a partner (treatment group II) with singles. Matching reveals that higher wages are mostly due to positive selection - into marriage as well as into cohabitation. Supplementary analysis of intra-household time use suggests that specialization, if any, is part of the selection process from single to cohabitation to marriage.Marital wage premium, cohabitation, matching approach

Wage Penalties for Career Interruptions: An Empirical Analysis for West Germany

This paper examines the wage effects of different types of career interruptions. We consider the timing and duration of non-employment spells by exploiting an administrative data set of German social security accounts (IAB employment sample) supplemented with information on the employees? entire working lives (IAB supplement sample I). These data allow us to distinguish between employment breaks due to registered unemployment, formal parental leave, training or other reasons – a distinction which can only be approximated using just the IAB employment sample. Our IV fixed effects estimation results suggest that women?s labor supply is endogenously determined, whereas men?s employment histories can be treated as exogenous. Career interruptions reduce the wage rates of both men and women. Moreover, the wage cuts resulting from unemployment, parental leave and additional home time are larger than the pure human capital effects of missing experience, hinting at a possible stigmatization of workers with discontinuous employment histories. --career interruptions,returns to experience,wage differentials,panel estimation

Does Work Time Flexibility Work? An Empirical Assessment of the Efficiency Effects for German Firms

In this paper we assess the impact of flexible work time schedules on firm efficiency using representative establishment data for Germany. Following the approach by Battese and Coelli (1995), we estimate a stochastic production frontier and the determinants of technical efficiency simultaneously. The innovation of our study is that we draw on technical efficiency instead of productivity to appraise the success of flexible working hours. The results indicate that while the use of work time schedules with moderate flexibility is positively related to technical efficiency, highly flexible work time arrangements seem to be negatively correlated with an efficient organization of the work flow. However, these efficiency losses should not be interpreted as causal effects, because highly flexible work time schedules are most likely to be introduced in struggling firms. --Stochastic production frontier,flexible work hours,efficiency

How much does a year off cost? Estimating the wage effects of employment breaks and part-time periods

Discontinuities in the employment profile are supposed to cause wage cuts since they imply an interruption in the accumulation of human capital as well as a depreciation of the human capital stock built up in the past. In this paper, we estimate the return to effective experience, taking into account both the timing and the duration of non-work and part-time employment spells. Estimation results for German women suggest that deviations from full-time employment are associated with significant wage cuts owing to the depreciation of human capital. Postponing the discontinuity leads to a further fall of the wage rate. Controlling for individual heterogeneity with respect to industry sector and job position decreases the estimated depreciation rates. This we interpret as an indication for segregation in the labor market. We conclude that traditional wage estimations that do not control for depreciation underestimate the return to effective experience. --

The Life-Cycle Hypothesis Revisited: Evidence on Housing Consumption after Retirement

According to the life-cycle theory of consumption and saving, foreseeable retirement events should not reduce consumption. Whereas some consumption expenditures may fall when they are self-produced (given higher leisure after retirement), this argument applies especially to housing consumption which can hardly be substituted by home production. We test this hypothesis using micro data for Germany (GSOEP) and find that income reductions when entering retirement have a negative effect on housing expenditures for tenants. For some econometric specifications, this effect is significantly stronger than the one of income changes at other times. While this result suggests that the strict consumption-smoothing hypothesis is violated for the subgroup of nonhome owners, the effect is quantitatively small, which explains the ambiguity of previous findings.consumption smoothing, retirement-consumption puzzle, GSOEP

Measuring Income Inequality in Euroland

In this paper we propose an aggregate measure of income inequality for the founding countries of the European monetary union. Applying the methodology of the Theil index we are able to derive a measure for Euroland as a whole by exploiting information from two data sets: the European Community Household Panel and the Luxembourg Income Study. The property of additive decomposability allows us to determine each country's contribution as well as that of each demographic group to overall income inequality. In addition the impact of government transfers on this inequality measure is assessed.

The wage gap and the leisure gap for double earner couples

Empirical research has consistently shown that, on average, men are paid higher wages than women. At the same time, men enjoy more leisure time than women. We develop a model of private provision of family public goods to analyze whether the wage gap and the leisure gap are related. Within a nonco- operative framework, different bargaining power situations within a couple are considered which lead to different empirical hypotheses. With data from the German Socio-Economic Panel we focus on the leisure gap and the wage gap within double earner couples and in this way are able to discriminate among the theoretical models. Our random effects estimates show that husbands have a stronger bargaining position and this advantage results in them enjoying, other things equal, more leisure time that their wives.