In this paper we develop a dynamic structural life-cycle model of labor supply behavior which fully accounts for the effect of income tax and transfers on labor supply incentives. Additionally, the model recognizes the demand side driven rationing risk that might prevent individuals from...

We analyze the effect of imposed benefit sanctions on the unemployment-to-employment transition of unemployed people entitled to unemployment compensation on the basis of register data from the German Federal Employment Agency. We combine propensity score matching with a discrete-time hazard...

In view of rising wage inequality and increasing poverty, the introduction of a legal minimum wage has recently become an important policy issue in Germany. We analyze the distributional effects of the introduction of a nationwide legal minimum wage of € 7.5 per hour on the basis of a...

This research note uses two German data sets the large-scale German Socio-Economic Panel and unique data from own student questionnaires to analyse the relationship between risk aversion and the choice for public sector employment. Main results are: (1) more risk averse individuals sort into...

In Germany, the streaming of students into an academic or nonacademic track at age 10 can be revised at later stages of secondary education. To investigate the importance of such revisions, we use administrative data on the student population in the German state of Hessen to measure the...

How individual wages change with time, and how they are expected to change as individuals grow older, is one of crucial determinants of their behaviour on the labour market including their decision to retire. The profile of individual hourly wages has for a long time been assumed to follow an...

This paper analyzes whether immigrant families facing credit constraints adopt a family investment strategy wherein, upon arrival, an immigrant spouse invests in host country-specific human capital while the other partner works to finance the family's current consumption. Using data for West...

Economic theory suggests both positive and negative relationships between intra-firm wage inequality and productivity. This paper contributes to the growing empirical literature on this subject. We combine German employer-employee-data for the years 1995-2005 with inequality measures using the...

This paper investigates the gender wage gap among skilled German workers after the end of vocational training using data from social security record. Using information on worker and plant characteristics for both the training plant and the current employer, results from standard decomposition...