This paper quantifies the life-cycle incidence of key family policy measures in Germany. The analysis is based on a novel dynamic microsimulation model that combines simulated family life-cycles for a base population from the 2009 wave of the German Socio-Economic Panel (SOEP) with a...

This paper asks whether the gap in subjective happiness between spouses matters per se, i.e. whether it predicts divorce. We use three panel databases to explore this question. Controlling for the level of life satisfaction of spouses, we find that a higher satisfaction gap, even in the first...

I propose two new tests of Falk and Knell’s (2004) prediction that individuals’ reference income increases with ability. To overcome the difficulty that the reference income is not observed in existing large data sets, I extend Falk and Knell’s model to establish a link between...