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Copyright of Deutsches Institut für Wirtschaftsforschung: DIW-Wochenbericht is the property of DIW Berlin and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

This paper studies the effect of air pollution on voting outcomes. We use data from 60 federal and state elections in Germany from 2000 to 2018 and exploit plausibly exogenous fluctuations in ambient air pollution within counties across election dates. Higher air pollution on election day shifts votes away from incumbent parties and toward opposition parties. An increase in the concentration of particulate matter (PM10) by 10 g/m3--around two within-county SDs--reduces the vote share of incumbent parties by two percentage points, which is equivalent to 4% of the mean vote share. We generalize these findings by documenting similar effects with data from a weekly opinion poll and a large-scale panel survey. We provide further evidence that poor air quality leads to more negative emotions such as anger, worry, and unhappiness, which, in turn, may reduce the support for the political status quo. Overall, these results suggest that poor air quality affects decision-making in the population at large, including consequential political decisions. [ABSTRACT FROM AUTHOR]

We study the effect of forced migration on public policy setting in the migrant-receiving country. After World War II, eight million expelled Germans arrived in West Germany within 5 years. We use regional variation in the population share of forced migrants across West German cities to estimate the effect of this inflow on cities' taxation and spending decisions. To identify a causal effect, we pursue an instrumental variable strategy that leverages push factors of the expulsions while being orthogonal to local conditions in the destination regions. Our results show that cities with high inflows of forced migrants increased spending on welfare and education, decreased spending on infrastructure, raised local taxes, and incurred more debt. Part of these effects can be attributed to shifts in political preferences. The migrants held voting rights upon arrival and supported parties that explicitly catered to their interests and needs. [ABSTRACT FROM AUTHOR]

Decision making on the job is becoming increasingly important in the labor market, in which there is an unprecedented rise in demand for workers with problem-solving and critical-thinking skills. This paper investigates how indoor air quality affects the quality of strategic decision making based on data from official chess tournaments. Our main analysis relies on a unique data set linking the readings of air-quality monitors inside the tournament room to the quality of 30,000 moves, each of them objectively evaluated by a powerful artificial intelligence–based chess engine. The results show that poor indoor air quality hampers players' decision making. We find that an increase in the indoor concentration of fine particulate matter (PM 2.5 ) by 10 μ g / m 3 (corresponding to 75% of a standard deviation in our sample) increases a player's probability of making an erroneous move by 26.3%. The decomposition of the effects by different stages of the game shows that time pressure amplifies the damage of poor air quality to the players' decisions. We implement a number of robustness checks and conduct a replication exercise with analogous move-quality data from games in the top national league showing the strength of our results. The results highlight the costs of poor air quality for highly skilled professionals faced with strategic decisions under time pressure. This paper was accepted by Prof. Yan Chen, behavioral economics and decision analysis. Funding: The authors gratefully acknowledge the financial support from the Graduate School of Business and Economics at Maastricht University as well as the Institute of Labor Economics Bonn. Supplemental Material: The online appendix and data are available at https://doi.org/10.1287/mnsc.2022.4643. [ABSTRACT FROM AUTHOR]

Copyright of Tijdschrift voor Arbeidsvraagstukken is the property of Amsterdam University Press and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

This paper examines the effect of inheritances on labour supply, distinguishing between unanticipated and anticipated inheritances. We use household and individual level micro‐data for Germany to investigate the effect of inheritances on a number of labour market outcomes. Women are less likely to work full‐time after an inheritance and their desired and actual hours of work decrease by 1–2 per week, on average. The magnitude of the effect is found to be larger and more precisely estimated for households without children and liquidity constrained households. Other margins such as time use outside the labour market and satisfaction are also found to be affected by inheritance receipt. [ABSTRACT FROM AUTHOR]

This paper investigates the effect of shifting taxes from labor income to consumption on labor supply and the distribution of income in Germany. We simulate stepwise increases in the value-added tax (VAT) rate, which are compensated by revenue-neutral reductions in income-related taxes. We differentiate between the personal income tax (PIT) and social security contributions (SSC). Based on a dual data base and a microsimulation model of household labor supply behavior, we find a regressive impact of such a tax shift in the short run. When accounting for labor supply adjustments, the adverse distributional impact persists for PIT reductions, while the overall effects on inequality and progressivity become lower when payroll taxes are reduced. This is partly due to increases in aggregate labor supply, resulting from higher work incentives. [ABSTRACT FROM AUTHOR]

Copyright of Perspektiven der Wirtschaftspolitik is the property of De Gruyter and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

This paper assesses the effects of U.S. tax policy reforms on inequality over around three decades, from 1979 to 2007. It applies a new method for decomposing changes in government redistribution into (1) a direct policy effect resulting from policy changes and (2) the effects of changing market incomes. Over the period as a whole, the tax policy changes increased income inequality by pushing up the income share of high-income earners (the top 20%). ( JEL H23, H31, H53, P16) [ABSTRACT FROM AUTHOR]

Copyright of Perspektiven der Wirtschaftspolitik is the property of De Gruyter and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Copyright of Schmollers Jahrbuch is the property of Duncker & Humblot GmbH and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

This article suggests multidimensional affluence measures for the top of the distribution. In contrast to commonly used top income shares, they allow the analysis of the extent, intensity and breadth of affluence in several dimensions within a common framework. We illustrate this by analysing the role of income and wealth as dimensions of multidimensional well-being in Germany and the US in 2007 as well as for the US over the period 1989-2007. We find distinct country differences with the country ranking depending on the measure. While in Germany wealth predominantly contributes to the intensity of affluence, income is more important in the US. [ABSTRACT FROM AUTHOR]

The system of income taxation in Germany is too complex and insufficiently transparent. Many reform proposals have been publicly debated during the past years. However, so far, conflicting goals of positive employment and distributional effects without a negative impact on the state's budget could not be overcome. A common problem of previous reform proposals is that they have neglected social security contributions and their interactions with income taxes. We tackle this issue by proposing an integrated system of taxation. Our simulations show that this comprehensive reform resolves conflicting goals: employment increases, inequality decreases and tax revenues slightly increase. [ABSTRACT FROM AUTHOR]

Income inequality in Germany has been continually increasing during the past 20 years. One cause of this development, among others, could be structural shifts in household formation due to long-term societal trends. These affect per capita incomes, which has repercussions for the income distribution even if wages remain constant. The aim of this paper is to quantify the proportion of changing household structures in the increase in inequality. We find that the growth of the income gap in Germany (for both East and West from 1991 to 2007) is indeed strongly related to changes in household structure and employment behavior, and a large part of this increase is compensated by the welfare state. [ABSTRACT FROM AUTHOR]

In Germany, both policy makers and researchers have been searching for solutions to overcome the disincentives on labor supply generated by income allowances for welfare recipients (Unemployment Benefit II). Taking proposals of the German Economic Institute (IW) and the governing Liberal Party (FDP) as a starting point, the German Federal Government has intensely discussed this topic during fall 2010 and finally proposed a reform in legislation. In this study, we analyze the potential labor supply effects of the legislated reform and the preceding proposals. In a second step, we augment the different scenarios with a working hours requirement to ensure that only those are subsidized, whose earned income is low due to low hourly wages rather than few working hours. Our simulations confirm the well-known trade-off of in-work benefits: Without working time requirement they tend to create incentives for welfare recipients to increase their labor supply, such that overall labor supply rises. However, the more generous the allowable income regulation, the more expensive the reform gets for the government budget. This comes mainly from the increasing incentive to reduce working hours for those located around the phasing-out level of income. This predominantly affects secondary earners. A working hours requirement reduces these effects and causes more favorable labor market effects and consequently much lower fiscal costs. [ABSTRACT FROM AUTHOR]