Labor supply in the market for low-paid jobs in Germany is strongly influenced by tax exemptions - even for individuals to whom these exemptions do not apply. We present compelling evidence that an individual's choice set depends on other workers' preferences because firms cater their job offers...

Empirical studies on the earnings effects of tobacco use have found significant wage penalties attached to smoking. We produce evidence that suggests that these estimates are significantly upward biased. The bias arises from a general failure in the literature to control for the past smoking...

In order to calculate the burden of a comprehensive and progressive income tax falling on a certain income source, an apportionment scheme for the entire tax burden has to be chosen. This raises the question of how to deal with losses, which is relevant for Germany in view of the heavy losses...

We estimate a dynamic structural life-cycle model of employment, non-employment and retirement that includes endogenous accumulation of human capital and intertemporal non- separabilities in preferences. Additionally, the model accounts for the effect of the tax and transfer system on work...

In this study we investigate the impact of the thin capitalization rule (TCR), introduced in Germany in 2008, on firms' capital structure, investment and profitability. The identification of the causal effects is based on the escape clauses in the regulation using a difference-in-difference...

Tax competition for the mobile factor capital has led to a trend in many countries to levy lower taxes on interest income, often introducing differential taxation between interest and business income. In this study, we analyze the effect of such differential taxation on the debt ratio of firms....

In the year 2000, the German government passed the most ambitious tax reform in postwar German history aiming at a significant tax relief for households. An important aim of this tax reform was to improve work incentives and, thereby, foster employment. Drawing on data of the German Socio...