Current Research
An Unemployment Re-Insurance Scheme for the Eurozone? Stabilizing and Redistributive Effects
(revise and resubmit at European Economic Review)
This paper develops a decomposition framework to study the importance of different stabilization channels of an unemployment re-insurance scheme for the euro area. Running counterfactual simulations based on household micro data for the period 2000–16, the paper finds that the re-insurance would have cushioned on average 12% (8%) of income losses through interregional (intertemporal) smoothing. These results suggest that the smoothing effect of the re-insurance which is due to asymmetries in labor market shocks would have raised the income insurance of a typical unemployment insurance scheme in the euro area by more than 50%. The simulated re-insurance scheme would have been revenue-neutral at EA-19, but not at the member-state level. Average annual net contributions would have amounted to -0.1–0.1 per cent of GDP. The paper discusses how different variants of the re-insurance might affect the risk of moral hazard.
Featured in Süddeutsche Zeitung, WirtschaftsWoche, Reuters, Spiegel
Who Bears The Burden of Real Estate Transfer Taxes? Evidence from the German Housing Market
Co-authors: Clemens Fuest, Carla Krolage and Florian Neumeier
(revise and resubmit at Journal of Urban Economics)
This paper examines the effects of real estate transfer taxes (RETT) on property prices using a rich micro dataset of roughly 17 million German properties for the period from 2005 to 2019. Our empirical analysis exploits variation in RETT rate hikes across German states and over time. Our monthly event study estimates indicate a price response that strongly exceeds the change in the tax burden for single transactions. Twelve months after a reform, a one percentage point increase in the tax rate reduces property prices by on average 3%. Negative price effects are predominantly found in counties where properties sell quickly and price discounts are small as well as in growing housing market regions. Moreover, effects are stronger for apartments and apartment buildings than for single-family houses. Our results can be rationalized by a theoretical model that predicts larger price responses in sellers' markets and for properties with a high transaction frequency.
Featured in Handelsblatt, Die Welt, Focus Online
Calamities, Common Interests, Shared Identity: What Shapes Social Cohesion in Europe?
Co-authors: Cevat Aksoy, Antonio Cabrales, Ruben Durante and Lisa Windsteiger. Under review.
We conduct a large-scale incentivized survey experiment in nine EU countries to study how priming common economic interests (EU trade), a shared identity (EU common values), and a major health crisis (COVID-19), influences altruism, reciprocity and trust of EU citizens. We find that the COVID-19 treatment increases altruism and reciprocity towards compatriots, as well as altruism towards citizens of other EU countries. The EU common values treatment has similar effects and in addition also boosts reciprocity towards fellow Europeans. The EU trade treatment has no tangible impact on behavior. Trust in others is not affected by any treatment. Our results suggest that both a shared identity and a shared crisis can have a unifying effect among EU citizens, while shared economic interests (alone) do not significantly affect European cohesion.
Featured in VoxEU
Which Factors Affect Public Support for Economic Policies? Evidence from a Survey Experiment about Rent Control in Germany
Co-authors: Paul Schüle and Lisa Windsteiger. Under review.
We conduct a survey experiment among 18,000 respondents in Germany to examine the determinants of support for rent control policies. Highlighting undesirable price and supply effects lowers respondents' agreement with rent control, while pointing out that it can prevent displacement of low-income tenants increases agreement. However, while our treatments shift support for the policy into the hypothesized direction, the effect size decreases in misperceptions. Our results suggest that responsiveness to new information depends largely on prior beliefs, which affect perceived credibility and political neutrality of the received information. Mere information provision is therefore not sufficient to effectively alter policy views.
Featured in Die Presse
Why Does Working from Home Vary Across Countries and People?
Co-authors: Pablo Zarate, Steven Davis, Nicholas Bloom, Jose Barrero and Cevat Aksoy.
We use two surveys to assess why work from home (WFH) varies so much across countries and people. A measure of cultural individualism accounts for about one-third of the cross-country variation in WFH rates. Australia, Canada, the UK, and the US score highly on individualism and WFH rates, whereas Asian countries score low on both. Other factors such as cumulative lockdown stringency, population density, industry mix, and GDP per capita also matter, but they account for less of the variation. When looking across individual workers in the United States, we find that industry mix, population density and lockdown severity help account for current WFH rates, as does the partisan leaning of the county in which the worker resides. We conclude that multiple factors influence WFH rates, and technological feasibility is only one of them.
NBER Working Paper, CESifo Working Paper
Featured in VoxEU, The Economist
Minimum Income Support Systems as Elements of Crisis Resilience in Europe
Co-authors: Werner Eichhorst, Annabelle Krause-Pilatus, Paul Marx and Max Lay. Revised working paper available soon.
This paper studies the role of social policies in different European welfare states regarding minimum income protection and active inclusion. The core focus lies on crisis resilience, i.e. the capacity of social policy arrangements to contain poverty and inequality and avoid exclusion before, during and after periods of economic shocks. To achieve this goal, the paper expands its analytical focus to include other tiers of social protection, in particular upstream systems such as unemployment insurance, job retention and employment protection, as they play an additional and potentially prominent role in providing income and job protection in situations of crisis. A mixed-method approach is used that combines quantitative and qualitative research, such as descriptive and multivariate quantitative analyses, microsimulation methods and in-depth case studies. We find consistent differences in terms of crisis resilience across countries and welfare state types. In general, Nordic and Continental European welfare states with strong upstream systems and minimum income support (MIS) show better outcomes in core socio-economic outcomes such as poverty and exclusion risks. However, labour market integration shows some dualisms in Continental Europe. The study shows that MIS holds particular importance if there are gaps in upstream systems or cases of severe and lasting crises.
Attitudes towards private and public debt
Co-authors: Cevat Aksoy, Justyna Klejdysz, Andreas Peichl and Lisa Windsteiger. Working paper available soon.
Liveability in large housing estates in Germany - Identifying differences based on a novel concept for a walkable city
Co-authors: Manuel Köberl, Michael Wurm, Ariane Droin, Oana Mihaela Garbasevschi and Hannes Taubenböck
(revise and resubmit at Landscape and Urban Planning)