Welfare programs are important in terms of reducing poverty, although they create incentives for recipients to maximize their income by either reducing their labor supply or manipulating their taxable income. In…
We structurally estimate an equilibrium search model using German administrative data and use this for counterfactual analyses of a uniform minimum wage. The model with worker and firm heterogeneity does not…
Over the 2000s, many federal states in Germany shortened the duration of secondary school by one year while keeping the curriculum unchanged. Exploiting quasi-experimental variation due to the staggered…
We ask whether a pay-as-you-go financed social security system is welfare improving in an economy with idiosyncratic productivity and aggregate business cycle risk. We show analytically that the whole welfare…
This paper investigates the roles psychological biases play in deviations between subjective survival beliefs (SSBs) and objective survival probabilities (OSPs). We model deviations between SSBs and OSPs through…
We characterize the optimal linear tax on capital in an Overlapping Generations model with two period lived households facing uninsurable idiosyncratic labor income risk. The Ramsey government internalizes the…
Germany’s stable economic growth of the past years has led to a budget surplus, which the newly-formed Grand Coalition now plans to use, for instance, to reduce the burden on broad levels of the population.…