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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.

This paper applies semiparametric regression models using penalized splines to investigate the profile of well-being over the life span. Using data from the British Household Panel Survey (BHPS) and the German Socio-Economic Panel Study (SOEP), the analysis shows a common, and quite similar, age-specific pattern of life satisfaction for both Britain and Germany that can be characterized by three age stages. The evidence suggests that the U-shaped profile is a good approximation of decreasing and increasing well-being in the first and second stage. After people reached their late 60s, however, a decline in well-being is found in the third stage. © 2013 The President and Fellows of Harvard College and the Massachusetts Institute of Technology.

This paper studies the patterns of welfare dependence among first generation immigrants and natives in Germany before and after a substantial recent reform of the welfare system. Using data from the German Socio-Economic Panel Study, the analysis presents life cycle trajectories of transfer receipt for immigrants and natives and studies the correlation between contextual factors and transfer receipt. We find no statistically significant differences in the probability of transfer receipt between immigrants and natives once socioeconomic characteristics are taken into account. Being a single parent, labor market status, and human capital are most closely correlated with the incidence of transfer receipt for both natives and immigrants. Interestingly, recent welfare reforms did not reverse prior patterns of welfare dependence.

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.

This paper introduces a simple model to estimate the dynamic adjustment of subjective well-being that results from an updating of expectations in response to changing circumstances. Empirical evidence indicates that adjustment takes place within a relatively short window of time.

This paper analyzes whether individuals have equal opportunity to achieve happiness (or well-being). We estimate sibling correlations and intergenerational correlations in self-reported life satisfaction, satisfaction with household income, job satisfaction, and satisfaction with health. We find high sibling correlations for all measures of well-being. The results suggest that family background explains, on average, between 30% and 60% of the inequality in permanent well-being. The influence is smaller when the siblings’ psychological and geographical distance from their parental home is larger. Results from intergenerational correlations suggest that parental characteristics are considerably less important than family and community factors. Dieser Beitrag ist mit Zustimmung des Rechteinhabers aufgrund einer (DFG-geförderten) Allianz- bzw. Nationallizenz frei zugänglich. - This publication is with permission of the rights owner freely accessible due to an Alliance licence and a national licence (funded by the DFG, German Research Foundation) respectively.

This article studies welfare entry and exit in Germany and determines the relevance of state dependence for natives and immigrants. Based on dynamic multinomial logit estimations, we calculate transition matrices between three labour market states. We find that temporal persistence in welfare participation can mostly be explained by observed and unobserved characteristics. Immigrants appear to have a higher risk of welfare entry and a lower probability of welfare exit compared to natives. The results do not yield strong evidence of state dependence or of an overall welfare trap.

We analyze how well-being is related to working time preferences and hours mismatch. Self-reported measures of life satisfaction are used as an empirical approximation of true wellbeing. Our results indicate that well-being is generally lower among workers with working time mismatch. Particularly underemployment is detrimental for well-being. We further provide first evidence on spillovers from the partner's working time mismatch. However, the spillover becomes insignificant once we control for the partner's well-being. This suggests that well-being is contagious, and the spillover is due to interdependent utilities. Females experience the highest well-being when their partner is working full-time hours. Male wellbeing is unaffected over a wide interval of the partner's working hours.

Using merged data from the British Household Panel Survey (BHPS) and the German Socio-Economic Panel (SOEP), this paper applies a parametric difference-in-differences approach to assess the real effects of the introduction of the euro on subjective well-being. A complementary nonparametric approach is also used to analyze the impact of difficulties with the new currency on well-being. The results indicate a loss in well-being associated with the introduction of the new currency, with the predicted probability that a person is contented with his/her household income diminishing by 9.7 percentage points. We calculate a compensating income variation of approximately one-third. That is, an increase in post-government household income of more than 30% is needed to compensate for the clear decline in well-being. The reasons for the negative impact are threefold. First, perceived inflation overestimates the real increase in prices resulting in suboptimal consumption decisions. Second, money illusion causes a false assessment of the budget constraint. Third, individuals have to bear the costs from the conversion and the adjustment to the new currency. Moreover, it is thought that losses are higher for persons who have difficulties with the new currency. However, the impact of difficulties in using and converting the new currency is rather small, and the initial problems were overcome within one year of the introduction of euro cash.