Does the timing of labour earnings taxation encroaches upon capital income taxation and individual risk-taking investment decisions, i.e. portfolio selection? This paper presents the results of a laboratory experiment that is, contrary to previous approaches, not restricted to the analysis of capital income taxation (fully taxable vs. tax-exempt investment earnings) and individual risktaking, but adds other dimensions of taxation, i.e. deferral or immediate labour earnings taxation. Empirical findings support the view that tax framing effects affect tax burden visibility, changing individuals´ risk- taking propensity substantially. A tax system applying deferral taxation of labour earnings turns out to be more attractive to taxpayers with regard to risk-taking investment than immediate labour taxation with tax-exempt earnings from investment.

In this paper, we analyze the effects of religious identity – defined both as personal identification with a religious tradition and institutional ideas on the provision of public goods – on attitudes toward central government. We explore whether citizens belonging to collectivist rather than individualist religious denominations are more likely to evaluate their central government positively. Moreover, we explore whether adherence to collectivist norms of economic and political organization leads to a positive evaluation of central government. Surveys were conducted in Russia and Israel as these countries provide a mosaic of three major world religions – Judaism, Eastern Orthodoxy and Sunni Islam. The information gathered also allows us to study whether attitudes towards religious institutions such as the Russian Orthodox Church, the Chief Rabbinate in Jerusalem, the Jerusalem Islamic Waqf, and the Greek- Orthodox Patriarchate of Jerusalem in Israel are able to predict positive attitudes toward centralized forms of governance. We find strong support for the proposition that collectivist norms and an institutional religious identity enhance positive attitudes towards central government.

According to the “welfare magnet” hypothesis, migrants with a high likelihood of claiming benefits cluster in the most generous welfare systems. After the introduction of the freedom of movement for Eastern European workers, EU-15 countries can thus be expected to reduce public benefits in order to avoid becoming “welfare magnets”. However, OECD data on benefits do not support the prediction of a race to the bottom in protection levels. Using data from the EU-LFS 2004 to 2011, I analyze the determinants of migration flows and find that, in contrast to theory, welfare state variables do not significantly affect migration flows when controlling for temporary political restrictions of the freedom of movement (2+3+2 rule). This explains why the pressure to modify national welfare spending is small. Furthermore, evidence is found that the restrictions completely offset the incentive effects of work-related pull factors and thereby hamper an efficient allocation of labor across national borders.

Der bundesstaatliche Finanzausgleich als Säule eines Solidarsystems der jeweiligen (Bundes-) Länder untereinander steht derzeit in der Diskussion um eine mögliche Neugestaltung. Derzeit stehen 3 Geberländern 13 Nehmerländer gegenüber. Im Zuge einer Neuordnung des bundesstaatlichen Finanzausgleichs stellt sich die Frage, welche einzelnen ökonomischen Anreizwirkungen von dem Ausgleichssystem ausgehen. In der folgenden Abhandlung erfolgt eine individuelle Auswahl einzelner ökonomischer Aspekte, die im bestehenden und in einem zukünftigen Ausgleichssystem zu beachten sind. Der (Länder-) Finanzausgleich im engeren Sinne nimmt dabei eine bedeutende Rolle im gesamten bundesstaatlichen Finanzausgleich ein, sodass auf diesen ein Schwerpunkt gelegt wird.

This paper challanges the view that weak work norms in generous welfare states makes them economically unsustainable. I develop a dynamic model of family- transmitted values that has a laissez-faire equilibrium with strong work norms coexisting with a social-insurance equilibrium with weak work norms. While the former has better incentives, the latter induces more intergenerational occupational mobility which improves the allocation of talent and fuels growth. Strong work norms arise as a defensive strategy of parents that aims at perpetuating their occupation along family lines. I present evidence from microdata showing that generous social insurance correlates with high intergenerational occupational mobility and that more mobile individuals endorse weaker work norms.

Fixed-term contracts are often considered a key policy tool for increasing employment. As we show that contract limitation lowers job satisfaction using data from the German Socio-Economic Panel study, we detect a drawback of promoting temporary employment that has not been identified so far. We find that the “honeymoon-hangover” effect of a new job must be taken into account to reveal this result. We examine reasons why employees suffer from temporary contracts and analyse the “Flexicurity” idea of compensating workers with security. Our findings contribute to research on workers’ well-being as well as to the debate on labour market flexibilisation.

Between 1999 and the onset of the economic crisis in 2008 real exchange rates in Greece, Ireland, Italy, Portugal and Spain appreciated relative to the rest of the euro area. This divergence in competitiveness was reflected in the emergence of current account imbalances. Given that exchange rate devaluations are no longer available in a monetary union, one potential way to address such imbalances is through a fiscal devaluation. We use a DSGE model calibrated to the euro area to investigate the impact of a fiscal devaluation, modeled as a revenue-neutral shift from employers’ social contributions to the Value Added Tax. We find that a fiscal devaluation carried out in ‘Southern European countries’ has a strong positive effect on output, but a mild effect on the trade balance of these countries. In addition, the negative effect on ‘Central-Northern countries’ output is weak.

We show in a dynamic stochastic general equilibrium framework that the introduction of a common currency by a group of countries with only partially integrated goods markets, incomplete financial markets and no labor migration across member states, signi cantly increases volatility of consumption and employment in the face of asymmetric shocks. We propose a simple transfer mechanism between member countries of the union that reduces this volatility. Furthermore, we show that this mechanism is more efficient than anticyclical policies at the national level in terms of a better stabilization for the same budgetary effects for households while in the long run deeper integration of goods markets could reduce volatility signi cantly. Regarding its implementation, we show that the centralized provision of public goods and services at the level of the monetary union implies cross-country transfers comparable to the scheme under study.

The Heavily Indebted Poor Countries Initiative (HIPCI) and the Multilateral Debt Relief Initiative (MDRI) were both implemented based on an assumption derived from the debt overhang hypothesis – that is, that the removal of excessive debt burdens would help to boost investment and economic growth. Using a quasi-experimental research design to compare the performance of investment and growth between LICs that have benefited from HIPCI and MDRI and those that have not, this study assesses whether the two programs have yielded the expected effects. The results indicate that while debt relief programmes have led to higher private-sector investment in beneficiary countries, they have not had any effect on public sector investment and growth. While the reasons for this outcome are not entirely clear, assumptions concerning the benefits that accrue to LICs as a result of debt relief appear to be in doubt.

Mobility of top incomes matters for both the openness of the income elite and the share of total income that this group receives. It is thus an important complement information to the growing snapshot literature on top income concentration. I use microlevel panel data of German income tax files that is highly representative for top income households. Top income mobility is assessed in four dimensions: (i) its stability over time, (ii) the degree of mobility between top income fractiles, (iii) the degree of mobility between equally sized groups and mobility in ranks, both of which do not depend on fractile sizes, and (iv) mobility’s impact on distributional results. Mobility in terms of annual fractile changes is high between the richest top income fractiles, which is primarily due to tiny fractile sizes. When the fractiles’ sizes are controlled for, top income recipients’ mobility is lower than that of lower income tax units.

This paper studies a principal–agent relation in which the principal’s private information about the agent’s effort choice is more accurate than a noisy public performance measure. For some contingencies the optimal contract has to specify ex post inefficiencies in the form of inefficient termination (firing the agent) or third–party payments (money burning). We show that money burning is the less efficient incentive device: it is used at most in addition to firing and only if the loss from termination is small. Under an optimal contract the agent’s wage may depend only on the principal’s report and not on the public signal. Nonetheless, public information is valuable as it facilitates truthful subjective evaluation by the principal.

Der Beitrag analysiert die Aufkommens-, Beschäftigungs- und Verteilungswirkungen einer Reformalternative zur Entlastung von Arbeitseinkommen und zur Verbesserung der Effizienz des Steuersystems auf der Basis eines Mikrosimulationsmodells. Die Reformalternative beinhaltet einen Ausgleich der „kalten Progression“, eine Reduktion der Grenzsteuersätze und eine Steuervereinfachung bei gleichzeitiger Verbreiterung der Steuerbasis, eine Reform der Grundsicherung sowie verbesserte Arbeitsanreize im unteren Einkommensbereich. Die analysierte Reformalternative wäre trotz zu erwartender positiver Beschäftigungseffekte und nur geringer Umverteilungseffekte mit erheblichen fiskalischen Kosten verbunden. Auf der Basis der ersten Erhebung zur Vermögenslage österreichischer Haushalte, dem Household Finance and Consumption Survey (HFCS) wird unter Vernachlässigung möglicher Ausweichreaktionen und zu erwartender Verteilungseffekte gezeigt, in welchem Umfang die fiskalischen Kosten der Reform durch alternative Vermögenssteuermodelle ausgeglichen werden könnten. Als Alternative zu einer Vermögenssteuer werden auch Möglichkeiten der Gegenfinanzierung durch Einsparungen bei den Staatsausgaben dargestellt.

In this paper, I test the effects of religious norms on the provision of public goods. My evidence is drawn from public goods experiments that I ran with regional bureaucrats in Tomsk and Novosibirsk, Russia. I introduce three treatments, which I define as degrees of Eastern Orthodox collectivist enforcement: 1. Solidarity, 2. Obedience, and 3. Universal discipline. I argue for the existence of an Eastern Orthodox hierarchy in the Russian bureaucracy that facilitates the delivery of public goods under conditions of universal discipline and the principal’s overfulfillment. Eastern Orthodox hierarchy is enforced through universal disciplinary monitoring, which induces collective punishment when the public good is not delivered. Contrary to conventional wisdom about freeriding in administrative institutions, higher ranks in Russian bureaucracies are associated with less freeriding.

Short answer: It helps a lot when other important variables are excluded from the information set. Longer answer: We revisit claims in the literature that money growth is Granger-causal for inflation at low frequencies. Applying frequency-specific tests in a comprehensive system setup for euro-area data we consider various theoretical predictors of inflation. A general-to-specific testing strategy reveals a recursive structure where only the unemployment rate and long-term interest rates are directly Granger-causal for low- frequency inflation movements, and all variables affect money growth. We therefore interpret opposite results from bivariate inflation/money growth systems as spurious due to omittedvariable biases. We also analyze the resulting four-dimensional system in a cointegration framework and find structural changes in the long-run adjustment behavior, which do not affect the main conclusions, however.

We analyze the optimal allocation of authority in an organization whose members have conflicting preferences. One party has decision–relevant private information, and the party who obtains authority decides in a self–interested way. As a novel element in the literature on decision rights, we consider exit option contracts: the party without decision rights is entitled to prematurely terminate the relation after the other party’s choice. We show that under such a contract it is always optimal to assign authority to the informed and not to the uninformed party, irrespective of the parties’ conflict of interest. Indeed, the first–best efficient solution can be obtained by such a contract.

Dieser Beitrag schildert die Entwicklung der relativen Bezahlung der Hochqualifizierten in Staat und Privatwirtschaft in Westdeutschland seit 1977. Es zeigt sich, dass seit ca. 1987 die relative Bezahlung der Hochqualifizierten im öffentlichen Dienst im Vergleich zur Privatwirtschaft massiv zurückgegangen ist: Gegenüber vergleichbaren Stellen in der Privatwirtschaft beträgt der relative Rückgang zwischen 25 % und 55 %. Dieser beträchtliche Verlust an Wettbewerbsfähigkeit seitens des öffentlichen Dienstes suggeriert, dass in dieser Zeit eine bedeutsame Verschiebung bei der Befriedigung von Bedürfnissen stattgefunden hat: von sozialen hin zu privaten Bedürfnissen.

A popular argument for a federal minimum wage is that it will prevent in-work poverty and reduce income inequality. We examine this assertion for Germany, a welfare state with a relative generous means-tested social minimum and high marginal tax rates. Our analysis is based on a microsimulation model that accounts for the interactions between wages, the tax-benefit system and net incomes at the household level as well as employment and price effects on the distribution of incomes induced by the introduction of a minimum wage. We show that the impact of even a relatively high federal minimum wage on disposable incomes is small because low wage earners are scattered over the whole income distribution and wage increases would to a large extent be offset by reductions in means-tested welfare transfers and high marginal tax rates. Taking into account negative employment effects and increases in consumer prices induced by the minimum wage would wipe out any positive direct effects on net incomes of households affected by the minimum wage.

The rigor versus relevance debate of management research is ongoing. We contribute to this discussion by contrasting alternative assumptions about generating management knowledge and linking knowledge generation to academic governance. Specifically, we show that knowledge-by-representation dominates the field and is reinforced by the governance structures and processes guiding our academic management journals, peer review, and business school practices. We propose governance changes in academic publishing to encourage innovative research that may also generate knowledge-by-exemplification with strong ties to management practice.