Search

This study investigates the lead effects of future plant closures for prospective displaced workers’ subjective and objective outcomes. We analyze the effects on their forward-looking subjective outcomes (job insecurity, probabilistic expectations of job loss and of job search), a current subjective outcome (job satisfaction), and current objective outcomes (weekly hours of work, earnings). We estimate the causal effect of the knowledge of future plant closure by combining propensity-score matching with fixed-effects difference-in-differences regressions using longitudinal data from the German Socio-Economic Panel (SOEP). Our analysis shows significant lead effects in the year before plant closure. Although wide confidence intervals preclude definitive conclusions, our evidence does not exclude the existence of lead effects two years prior to a plant closure. Additionally, the lead effects do not generally show heterogeneous results based on job position, gender, or immigrant status.

This study examines dynamics of solo self-employment. In particular, we investigate the extent of true state dependence and cross state dependence, i.e., whether experiencing solo self-employment causally affects the probability of becoming an employer in the future. We use data from the German Socio-Economic Panel to estimate dynamic multinomial logit models. Our results show that the extent of true (cross) state dependence is rather small. The observed persistence in solo self-employment as well as transitions from solo self-employment to employership can largely be explained by observed and unobserved heterogeneity.

Daylight savings time (DST) represents a public good with costs and benefits. We provide the first comprehensive examination of the welfare effects of the spring and autumn transitions for the UK and Germany. Using individual-level data and a regression discontinuity design, we estimate the effect of the transitions on life satisfaction. Our results show that individuals in both the UK and Germany experience deteriorations in life satisfaction in the first week after the spring transition. We find no effect of the autumn transition. We attribute the negative effect of the spring transition to the reduction in the time endowment and the process of adjusting to the disruption in circadian rhythms. The effects are particularly strong for individuals with young children in the household. We conclude that the higher the shadow price of time, the more difficult is adjustment. Presumably, an increase in flexibility to reallocate time could reduce the welfare loss for individuals with binding time constraints.

This study examines dynamics of solo self-employment. In particular, we investigate the extent of true state dependence and cross state dependence, i.e., whether experiencing solo self-employment causally affects the probability of becoming an employer in the future. We use data from the German Socio-Economic Panel to estimate dynamic multinomial logit models. Our results show that the extent of true (cross) state dependence is rather small. The observed persistence in solo self-employment as well as transitions from solo self-employment to employership can largely be explained by observed and unobserved heterogeneity.

This paper investigates multinational enterprises’ (MNEs) response to a unique window of opportunity for temporarily unrestricted profit shifting. The window unexpectedly opened because of a ruling by the European Court of Justice in 2006 that suspended the application of controlled foreign corporation (CFC) rules within the European Economic Area. It closed with a subsequent piece of anti-shifting legislation on thin capitalization in 2007. We identify causal effects of the suspension of the CFC rules on profit shifting by exploiting random variation in the size of MNEs’ windows that results from variation in the business year starting dates across MNEs. Using detailed balance sheet information on internal debt shifting between foreign low tax subsidiaries and their parents, we find that MNEs’ response to the window of opportunity is remarkably moderate in terms of both the probability and the volume of internal lending. On the one hand, this results from substantial short-term rigidities: internal lending increases with window size. On the other hand, MNEs in general responded with a fair amount of reserve which is indicated by low total levels of internal lending throughout the window. Presumably, this is caused by legal uncertainty about the scope of internal debt shifting that would be accepted by tax offices.

We study state dependence in welfare receipt and investigate whether welfare transitions changed after a welfare reform. Using data from the German Socio-Economic Panel, we apply dynamic multinomial logit estimators and find that state dependence in welfare receipt is not a central feature of the German welfare system. We find that welfare transitions changed after the reform: transitions from welfare to employment became more likely and persistence in welfare and inactivity declined. We observe a large relative increase in transitions from employment to welfare. Immigrants’ responsiveness to the labor market situation increased after the reform.