Economic Systems and Risk Preferences: Evidence from East and West Germany

For standard economic models it is typically assumed that preferences are given and stable. But do economic systems shape individuals' risk preferences? Using the reunification of East and West Germany as a natural experiment I evaluate differences in financial risk taking comparing Eastern and Western German households for almost two decades after the fall of the Berlin Wall. Controlling for a large set of socio-economic variables East Germans having been ``treated'' by a command economy were more prone to taking financial risk than West German citizens. The differences were quantitatively relevant after the fall of the Iron Curtain and almost vanished by 2008

Income, Consumption and Remittances: Evidence from Immigrants to Australia

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The Asset Portfolios of Native-Born and Foreign-Born Households

This paper analyses the net worth and asset portfolios of native- and foreign-born Australian families using HILDA (wave 2) data. Specifically, we estimate a system of asset equations with an adding-up constraint imposed to control for variation in households' total net worth. Our results indicate that after accounting for differences in human capital and income levels, single immigrants have a wealth advantage of almost $185,000 relative to single native-born individuals. Although the wealth gap between mixed and native-born couples is not statistically significant, immigrant-only couples have approximately$150,000 less wealth on average than native-born couples. Relative to equally wealthy native-born couples, immigrant-only couples hold substantially more of their wealth in their homes and less in the form of vehicles and financial assets. Mixed couples, on the other hand, allocate their wealth across assets in the same way as native-born couples

Identifying National Level Education Reforms in Developing Settings: An Application to Ethiopia

Increasing enrollment in primary education has been at the center of international education policy for well over a decade. In developing parts of the world, significant increases in primary enrollment are often generated by large national level programs, which can simultaneously promote overcrowding and reductions in education quality. However, to analyze the trade-off between increased enrollment and potential reductions in quality one must first identify and evaluate the impact of the national reform on schooling. This paper provides a method with which these types of reforms can be identified in developing settings using both temporal and geographic variation, and readily available data. The method is applied to an early 1990s reform in Ethiopia based around the release of the Education and Training Policy, which removed schooling fees from grades one to ten. The model estimates that the reform led to an increase in schooling of at least 1.2 years, and provides initial evidence that the increased enrollment in Ethiopia outweighed any cost due to reductions in quality

The Effect of Education on Fertility: Evidence from a Compulsory Schooling Reform

This study analyzes the effect of education on the number of children, childlessness, and the timing of the first birth. We use exogenous variation from a mandatory reform to compulsory schooling in West Germany to deal with the endogeneity of schooling. In contrast to studies for other developed countries, we find a significant negative effect of education on completed fertility. We attribute this finding to the particularly high opportunity costs of child-rearing in Germany

War and stature: Growing up during the Nigerian civil war

The Nigerian civil war of 1967-70 was precipitated by secession of the Igbo-dominated south-eastern region to create the state of Biafra. It was the first civil war in Africa, the predecessor of many. We investigate the legacies of this war four decades later. Using variation across ethnicity and cohort, we identify significant long-run impacts on human health capital. Individuals exposed to the war at all ages between birth and adolescence exhibit reduced adult stature and these impacts are largest in adolescence. Adult stature is portentous of reduced life expectancy and lower earnings