Peer-reviewed publications:
Schmitz, H., and Westphal, M. (2015). Short- and Medium-term Effects of Informal Care Provision on Female Caregivers’ Health. Journal of Health Economics.
Schmitz, H., and Westphal, M. (2017). Informal Care and Long-term Labor Market Outcomes. Journal of Health Economics, 56(C), 1 – 18.
Kamhöfer, D. A., Schmitz, H., and Westphal, M. (2019). Heterogeneity in Marginal Non-monetary Returns to Higher Education. Journal of the European Economic Association, 17(1), 205–244.
Westphal, M., Kamhöfer, D. A., and Schmitz, H. (2022). Marginal College Wage Premiums Under Selection Into Employment. Economic Journal.
Freise, D., Schmitz, H., and Westphal, M. (2022). Late-career unemployment and cognitive abilities. Journal of Health Economics, 86, 102689.
Monsees, D, and Westphal, M. (2025). The Effects of Resigning GPs on Patient Healthcare Utilization and Some Implications for Health? Health Economics, 35(5), 932-955
Working Papers:
Gene-environment interactions with essential heterogeneity (with Johannes Hollenbach and Hendrik Schmitz) Revise & Resubmit at the Economic Journal Link to Working Paper
Newly available data on genetic endowments have revived the old debate in the social sciences about nature versus nurture in determining success over the life course. Recent studies have used instrumental variable models to estimate gene-environment interactions, i.e., whether the effect of a given environmental exposure or individual decision (such as education) varies by genetic endowment. We show that two-stage least squares estimates of these interactions may not provide information about how genes causally mediate the effect of the environmental exposure if genetic endowment also influences the first stage and if unobserved heterogeneity in the outcome and the treatment is correlated. We propose to estimate marginal treatment effects to account for unobserved heterogeneity and to isolate the effect of genetic endowment in such a setting. We test this setting on the effect of education on cognitive performance in old age using the English Longitudinal Study of Aging and a 1947 educational reform that raised the minimum school leaving age as an instrument for education. We use an education polygenic score to measure genetic predisposition, an indicator that predicts educational attainment based on differences in genetic variants across individuals. We show that the two conditions limiting the interpretation of 2SLS estimates are met. The marginal treatment effect estimates of the gene-environment interaction exceed the 2SLS estimate by a factor of 2.5. This finding suggests substantial complementarities between education and genetic predisposition in determining cognitive abilities in old age.
School Starting Age and the Gender Pay Gap over the Life Cycle (with Kamila Cygan-Rehm) Revise & Resubmit at the Journal of Applied Econometrics Link to Working Paper
In this paper, we replicate and extend the evidence on the lifetime effects of school starting age on earnings by Fredriksson and Öckert (2014) for Sweden. Using data for German birth cohorts 1945–1965, we examine a rigid system of ability tracking in secondary education (in grade 5), a potential driver of long-term effects. We confirm negligible effects of later school entry for men and positive effects for women. These differences arise despite similar tracking effects. We also show their implications for the gender pay gap over the life cycle. Delaying first motherhood seems to be a plausible mechanism behind the results.
Early- and Later-Life Stimulation: How Retirement Shapes The Effect of Education on Old-Age Cognitive Abilities (with Hendrik Schmitz) Revise & Resubmit at the Journal of Applied Econometrics Link to Working Paper
We study the interaction of education in adolescence and labor force participation around retirement age and its effect on cognitive abilities for individuals in Europe. Besides a direct long-run effect of education, indirect ones may arise, specifically through labor force participation. We suggest an estimator for causal mediation analysis that accommodates endogeneity and heterogeneous treatment effects and use it to identify indirect effects within the education effect. We find that education raises cognitive abilities by about 8 percent. Among the more educated, labor force participation accounts for 36 percent of the total effect, emphasizing important complementarities between education and labor force participation.
Monetary returns to upper secondary schooling, the evolution of unobserved heterogeneity, and implications for employer learning (with Anna Krumme) Link to Working Paper
We study the evolution of monetary returns to high school education and their heterogeneity after the labor market entry using linked survey and administrative labor market data from Germany. By exploiting academic track school openings for cohorts born between 1950 and 1985 as arguably exogenous variation, we find sizeable monetary returns to the highest secondary schooling degree, with average returns of 14–17% per year of additional schooling within the first 10 years of labor market experience. Unobserved heterogeneity in the returns is uncorrelated with the schooling decision at the beginning of the career, but the correlation starts evolving at higher experience levels. We interpret this finding in light of employer learning – so far unconsidered in the literature.
Effects of Retirement on Cognitive Functioning – Evidence from Biomedical and Administrative Insurance Claims Data Link to Working Paper
We study the effects of retirement on cognitive functioning among women aged 63 to 67. The exogenous variation comes from a German retirement reform that raised the early retirement age for women born after 1951 by three years, from 60 to 63. Our indicators of cognitive functioning are experimental measures (word recall, semantic fluency, and results from the Stroop test) from a large biomedical data set, as well as the diagnosis of cognitive disorders from administrative health insurance claims. We find reductions in the experimental measures of around 6--13\% of a standard deviation per year in retirement. In contrast, the diagnosis of cognitive disorders remains unaffected.
The Dynamic and Heterogeneous Effects of Retirement on Cognitive Decline (with Hendrik Schmitz) Reject and Resubmit at the Journal of Health Economics
We study the effects of retirement on cognitive abilities (up to ten years after retirement) using data from Continental Europe, England, and the USA and exploiting early retirement thresholds for identification. For this purpose, we combine event-study estimations with the marginal treatment effect framework to allow for effect heterogeneity. This helps to decompose event-study estimates into true medium-run effects of retirement and effects along a different revealed distaste for retirement. Our results suggest considerable negative effects of retirement on cognitive abilities. We also detect substantial effect heterogeneity: Those who retire as early as possible are unaffected, while those who retire later exhibit negative effects.
Work in Progress:
Optimising Long-Term Care Benefits: Analysing the Marginal Value of Public Spending and the Impact of Cash vs. In-Kind Benefits (with Rebecca Leber and Daniel Kühnle)
Public Transportation Investments and Elections (with Thomas Bauer, Linda Glawe, and Galina Zudenkova)
Early and Later-life Stimulation: How Retirement Shapes the Effect of Education on Old-age Cognitive Abilities (with Hendrik Schmitz)
We study the interaction of education in adolescence and labor force participation around retirement age and its effect on cognitive abilities for individuals in Europe aged 50–70. In addition to a long-run direct impact, indirect ones may arise, specifically through labor force participation. We directly test this using a novel and purpose-built estimator for causal mediation analysis that accommodates endogeneity and heterogeneous treatment effects. Overall, we find that education raises cognitive abilities by about 8 percent. Only among the more educated can 36 percent of this effect be attributed to labor force participation, emphasizing significant complementarities between both factors.