Publications

We examine labor supply responses to piece rate changes relative to the reference piece rate (RR). In experimental conditions without RR, labor supply increases monotonically with the actual piece rate. In conditions with RR, labor supply increases both when the piece rate rises and falls relative to RR. This non-monotonicity in labor supply responses to piece rate changes around RR is consistent with the effects of framing a given level of income as gain or loss relative to the target level induced by RR: loss aversion makes subjects work more at a given piece rate when the implied income is in the loss rather than gain domain. However, the framing effects disappear when the piece rate could both rise or fall relative to RR.

We characterize intergenerational mobility in Germany using census data on educational attainment and parental income for 526,000 children. Motivated by Germany’s tracking system in secondary education, our measure of opportunity is the A-Level degree, a requirement for access to university. A 10 percentile increase in parental income rank is associated with a 5.2 percentage point increase in the A-Level share. This gradient remained unchanged for the birth cohorts 1980–1996, despite a large-scale expansion of upper secondary education. At the regional level, there exists substantial variation in mobility estimates. Local characteristics, rather than sorting patterns, account for most of these differences.

We study the general equilibrium implications of the corporate tax shield in a growth economy that taxes household income and firm profits and redistributes tax revenues. Our stylized model predicts that in general equilibrium the tax shield's reduction of the corporate after-tax borrowing rate is counteracted (but not fully eliminated) by an increase in the pre-tax rate.

In Switzerland, access to non-academic occupations requires the completion of a vocational education and training (VET) program. Over two-thirds of adolescents choose to start a dual VET program after compulsory education. However, this path from school to work is not always linear, and changes can be a means of adjusting wrong career choices. In the context of dual VET, two types of adjustments that occur frequently can be distinguished: (1) change of occupations and (2) change of companies. The present study aims to examine the predictors of each of those two types of changes. First, we are interested in the link between individuals’ intentions to change their career paths and actual changes. When changes are intended by the trainee and aimed at correcting wrong career choices, actual changes can generally be expected to be predicted by change intentions. Second, we are interested in the role of person-job fit (P-J fit) as well as trainees’ socialization and performance indicators. Third, we examine to what extent trainees’ decisions to change occupations or companies can be predicted by pre-entry factors (perceived P-J fit and effort during compulsory education before the transition to VET). We used a longitudinal sample of adolescents at the end of compulsory school and at the end of their first year in a dual VET program in Switzerland. This data set is combined with government data on actual changes regarding individuals’ training companies and their occupations. The two types of adjustments were examined in separate structural equation models that compared trainees without any types of adjustments during their training program (1) to those who changed occupations (N = 417) and (2) to those who changed training companies (N = 378). The results show that actual occupational changes and actual company changes of trainees are affected by the same work-context predictors (negative effect of trainees’ self-perceived work performance) and pre-entry predictors (negative effect of effort during compulsory education). However, in contrast to changes of training companies, changes of occupations are significantly predicted by trainees’ intentions to change. Moreover, while P-J fit during the VET program is the only direct predictor of trainees’ intentions to change occupations, intentions to change companies are not significantly predicted by P-J fit. Intentions to change companies are negatively affected by companies’ socialization tactics and positively affected by adolescents’ pre-entry effort. Overall, the results call for a more differentiated assessment of changes/ premature contract terminations in future studies. Whether change intentions are a valid proxy for actual change behavior seems to depend on the type of changes that trainees decide to make.

This paper studies how distributional and electoral concerns shape sovereign default incentives within a quantitative model of sovereign debt with heterogeneous agents and non-linear income taxation. The small open economy is characterized by a two-party system in which the left-wing party has a larger preference for redistribution than the right-wing party. Political turnover is the endogenous outcome of the electoral process. Fiscal policy faces a tradeoff: On the one hand, the government has incentives to finance its spending via external debt to avoid distortionary income taxation. On the other hand, the accumulation of external debt raises the cost of borrowing. Quantitative findings suggest that the left-wing party implements a more progressive income tax, is more prone to default, and has a lower electoral support than the right-wing party due to worse borrowing conditions and the distortionary effects of income taxation. In equilibrium, electoral uncertainty raises sovereign default risk.

We study a mentoring program that aims to improve the labor market prospects of disadvantaged adolescents. Our randomized controlled trial investigates its effectiveness on three outcomes highly predictive of later labor market success: math grades, patience/social skills, and labor market orientation. For low-SES (socioeconomic status) adolescents, the mentoring increases a combined index of the outcomes by over half a standard deviation after 1 year, with significant increases in each outcome. Effects on grades and labor market orientation, but not on patience/social skills, persist 3 years after program start. By that time, the mentoring also improves early realizations of school-to-work transitions for low-SES adolescents. The mentoring is not effective for higher-SES adolescents.

We investigate the causal effect of increasing shareholder rights on employee satisfaction. To ensure causality, we use close shareholder votes on antitakeover provisions included in the Entrenchment Index (E‐Index) as exogenous shocks to the corporate governance of a company. A 1‐point increase in shareholder rights on the E‐Index scale causes a 10% decrease in employee satisfaction. The channels that drive our results are decreases in employees' opinion about firm culture, in their view about the company's CEO, in the number of employees, and in capital expenditures.

We estimate short-term dividend strip prices from 27 years of S&P 500 index options data (1996-2022). We use option-implied interest rates when estimating strip prices and longer holding period returns to mitigate measurement error. We find that Sharpe ratios for short-term strips are similar to or higher than Sharpe ratios for the market. Shortterm strips also have a low market beta and a positive alpha. Over the business cycle, realized term premiums (i.e., the difference between market and strip returns) and the term structure of Sharpe ratios move countercyclically, whereas the term structure of alphas moves procyclically.

The use of immersive virtual reality (IVR) offers a variety of design possibilities for action-oriented teaching and learning that enables the promotion of specific knowledge and skills. In order to use IVR applications as an effective teaching and learning medium, it is important to understand the potential advantages and disadvantages of this technology compared to other media. This raises the question of what type of learning environment is most effective in promoting specific knowledge and skills. To answer these questions, a systematic review of research on learning with IVR in an educational context was conducted using the PRISMA method (Liberati et al., 2009; Page et al., 2021). The study analyzed 30 relevant research articles to compare the relative effectiveness of IVR-based learning and its impact on learner engagement, as outlined in the ICAP framework (Chi & Wylie, 2014). The results indicate that IVR has a positive impact on learning compared to other types of media. The study suggests that IVR technology is suitable for learning environments that prioritize active learner engagement and practical application, such as active manipulation and constructive creation. In summary, the results offer more insights into the advantages of using IVR to accomplish particular learning objectives.

This article systematically reviews 94 accounting and finance studies that address the real effects of financial reporting. Whereas the effects of financial reporting on capital suppliers’ decisions traditionally have received much attention, recent research has generated new important insights into the feedback effects of financial reporting on the reporting firms’ real activities (e.g., investments or allocation and use of resources). We identify the consequences of financial reporting for (1) the reporting firm, (2) its peer firms, and (3) the input and output markets. We also highlight the effects of firms’ internal controls over financial reporting and consider how accounting and auditing regulations influence and contribute to real effects. The studies we review are consistent in their findings that high-quality financial reporting is positively associated with the efficiency of the reporting firm’s resource allocation. Many studies also suggest a positive association between high-quality financial reporting and an efficient allocation of resources in the real sector, which can also benefit other market participants like consumers or employees. The article concludes with an outlook on fruitful research opportunities.

Exploiting the random allocation of asylum seekers to different locations in Germany, we study the impact of native attitudes, proxied by voting behaviors, on refugees’ integration. We find that in municipalities with more voting for the right-wing Alternative for Germany (AfD) political party, refugees have worse social integration. These impacts are largest for groups targeted by AfD campaigns. Refugees are also more likely to suffer from harassment and right-wing attacks in areas with greater AfD support. Positive interactions with locals are also less likely and negative opinions about immigration spillover to supporters of other parties in these areas. On the other hand, stronger support for pro-immigrant parties enhances social integration.

Repeated interactions provide an evolutionary explanation for one-shot human cooperation that is counterintuitive but orthodox1,2,3. Intergroup competition4,5,6,7 provides an explanation that is intuitive but heterodox. Here, using models and a behavioural experiment, we show that neither mechanism reliably supports cooperation. Ambiguous reciprocity, a class of strategies that is generally ignored in models of reciprocal altruism, undermines cooperation under repeated interactions. This finding challenges repeated interactions as an evolutionary explanation for cooperation in general, which further challenges the claim that repeated interactions in the past can explain one-shot cooperation in the present. Intergroup competitions also do not reliably support cooperation because groups quickly become extremely similar, which limits scope for group selection. Moreover, even if groups vary, group competitions may generate little group selection for multiple reasons. Cooperative groups, for example, may tend to compete against each other8. Whereas repeated interactions and group competitions do not support cooperation by themselves, combining them triggers powerful synergies because group competitions constrain the corrosive effect of ambiguous reciprocity. Evolved strategies often consist of cooperative reciprocity with ingroup partners and uncooperative reciprocity with outgroup partners. Results from a behavioural experiment in Papua New Guinea fit exactly this pattern. They thus suggest neither an evolutionary history of repeated interactions without group competition nor a history of group competition without repeated interactions. Instead, our results suggest social motives that evolved under the joint influence of both mechanisms.

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dc.contributor.author: Deißinger, Thomas; Melnyk, Oksana

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dc.contributor.author: Melnyk, Oksana; Heister, Michael

Several studies have analyzed the outcome of vocational education and training (VET); however, they primarily compared individuals with different qualification levels. This perspective neglects the fact that adolescents can differ in their training courses and transition to the labor market. Thus far, evidence on the consequences of different VET-to-labor market transition patterns is scarce. Therefore, the present study distinguished different VET-to-labor market transition patterns of German trainees and analyzed the long-term consequences on subjective well-being (SWB) later in life. Our results show in-between differences in the SWB of trainees in further life by different VET-to-labor market transition patterns. Compared to individuals with direct VET-to-labor market transitions, individuals who experienced a premature training termination and did not return to institutionalized education were more likely to have lower SWB later in life. Additionally, participating in general or higher education programs after VET seems to be beneficial. However, completing multiple VET programs did not influence SWB. The results underline the importance of strategies to prevent early leaving from education and training.

While the COVID-19 pandemic had a large and asymmetric impact on firms, many countries quickly enacted massive business rescue programs which are specifically targeted to smaller firms. Little is known about the effects of such policies on business entry and exit, investment, factor reallocation, and macroeconomic outcomes. This paper builds a general equilibrium model with heterogeneous and financially constrained firms in order to evaluate the short- and long-term consequences of small firm rescue programs in a pandemic recession. We calibrate the stationary equilibrium and the pandemic shock to the U.S. economy, taking into account the factual Paycheck Protection Program (PPP) as a specific policy. We find that the policy has only a modest impact on aggregate output and employment because (i) jobs are saved predominately in the smallest firms that account for a minor share of employment and (ii) the grant reduces the reallocation of resources towards larger and less impacted firms. Much of the reallocation effects occur in the aftermath of the pandemic episode. By preventing inefficient liquidations, the policy dampens the long-term declines of aggregate consumption and of the real wage, thus delivering small welfare gains.