In Germany, there is an ongoing debate about how to increase the efficiency of the social security system and especially its financing. The aim of this paper is to simulate different financing systems for Germany. The introduction of a Liberal British or the Southern Greek financing system...

Based on representative micro data for Germany, we compare the incomes of self-employed with those of wage workers. Our results show that the median self-employed entrepreneur with employees earns significantly more than the median salaried employee, while the median solo entrepreneur earns...

We analyze the link between R&D, innovation, and productivity in MSMEs with a special focus on micro firms with fewer than 10 employees; usually constituting the majority of firms in industrialized economies. Using the German KfW SME panel, we examine to what extent micro firms are different...

The elasticity of taxable income (ETI) is often interpreted as a sufficient statistic to assess the welfare costs of taxation. Building on the conceptual framework of Chetty (2009), we show that this assertion does no longer hold for tax systems with deduction possibilities if (i) deductions...

This paper describes IZAΨMOD, the policy microsimulation model of the Institute for the Study of Labor (IZA). The model uses household microdata from the German Socio-Economic Panel Study and firm data from the German linked employer-employee dataset LIAB. IZAΨMOD consists of three components:...

We analyze whether start-up rates in different industries systematically change with business cycle variables. Using a unique data set at the industry level, we mostly find correlations that are consistent with counter-cyclical influences of the business cycle on entries in both innovative and...

This paper deals with the impact of electoral competition on politicians' outside earnings. In our framework, politicians face a tradeoff between allocating their time to political effort or to an alternative use generating outside earnings. The main hypothesis is that the amount of time spent...

In this paper, we define a new class of richness measures. In contrast to the often used headcount, these new measures are sensitive to changes in rich persons' income and therefore allow for a more sophisticated analysis of richness. We demonstrate the application of these new measures to...

In Germany, two observations can be tracked over the past 15 to 20 years: First, income inequality has constantly increased while, second, the average household size has been declining dramatically. The analysis of income distribution relies on equivalence-weighted incomes, which take into...

This paper investigates the role of self-productivity and home resources in ability formation from infancy to adolescence. In addition, we study the complementarities between basic cognitive, motor and noncognitive abilities and social as well as academic achievement. Our data are taken from the...