Newsletter November 2018

Public awareness for the threat posed by climate change is at an unprecedented high. This is a welcome fact. The need for structural change away from fossil fuels and toward climate-friendly energy sources is – at least in Germany – now beyond debate. The Paris Agreement has been signed, and climate protection goals have been enshrined in national and international agreements.

While parts of the international community are increasingly turning their backs on multilateralism, Germany is struggling with scepticism towards migration and digitalisation as well as with the challenges that come with an ageing population. A strong Europe is needed to counter these signs of global decline. Besides, in order to respond to the challenges of demographic change, Germany will need to open itself up to structural change through digital transformation. These were the key policy recommendations outlined by Professor Isabel Schnabel, member of the German Council of Economic Experts.

Contrary to existing prejudices, parents do usually not misuse government transfers like the child benefit. Instead, they spend it for the benefit of their children. These are the findings of a recent study carried out by the Centre for European Economic Research (ZEW) in Mannheim on behalf of the Bertelsmann Stiftung.
 

On 12 November 1918, women received the right to vote in Germany. Today, 100 years later, their fight for equal rights continues, perhaps mostly noticeably in the workplace. Female quotas, pay gaps and flexible work models dominate the debate about how to create more equal opportunities for women. ZEW personnel economist Susanne Steffes takes a critical look at the current situation in Germany’s job market and at measures for the equal treatment of men and women.

How can we design a sustainable tax system that can meet future economic and societal challenges on the national, European and global level? This is one of the questions addressed at the fifth international annual MaTax conference in Mannheim in the beginning of October 2018. The conference was organised by ZEW and the University of Mannheim within the framework of the Leibniz ScienceCampus “Mannheim Taxation” (MaTax).

The Centre for European Economic Research (ZEW), Mannheim, has for the second time received the “TOTAL E-QUALITY” award and is thus considered an employer who is particularly committed to ensuring gender equality and diversity in the workplace.

Dr. Martin Kesternich, deputy head of the Research Department “Environmental and Resource Economics, Environmental Management” at the Centre for European Economic Research (ZEW), Mannheim, accompanied a delegation from Baden-Württemberg International (bw-i) – the Agency for International Economic and Scientific Cooperation of the state of Baden-Württemberg – as well as other representatives from academia and industry to Columbia. The one-week trip centred on several workshops on mobility and air pollution control, which were organised in corporation with researchers from universities and research institutions in Bogotá and Medellín.

The Centre for European Economic Research (ZEW) is pleased to announce the International Conference on Technology, Demographics, and the Labor Market from 29 to 30 March 2019, organized by the DFG Priority Programme 1764 at the University of Cologne in Germany. The conference focuses on technological change, including change through automation, digitalisation, or outsourcing, and demographics in industrialised countries, as well as on the ways these phenomena interact with employment, wages, and participation in the labour market. Researchers are invited to submit empirical and theoretical contributions on this topic from all areas of economics and sociology. Please submit your complete paper or work in progress in PDF format, including up to four JEL Codes to Angelika Ganserer via dfg1764@zew.de no later than 18 December 2018.

Jesse Wursten is a visiting researcher in ZEW’s Research Department “Economics of Innovation and Industrial Dynamics” from 3 September to 30 November 2018. He is a PhD researcher at the Faculty of Economics and Business at the University of Leuven, Belgium. His research interests are focused on labour economics, applied econometrics and business communications. The research he is conducting at ZEW looks at the effects of the introduction of the universal minimum wage in Germany in 2015. On 2 October, he also gave an internal seminar on a project looking at minimum wage levels in the US.

Wytse Joosten was a visiting researcher in ZEW’s Research Department “Economics of Innovation and Industrial Dynamics” from 5 to 9 November 2018. She is a doctoral researcher at the Faculty of Economics and Business at KU Leuven, Belgium. Her research focuses on the economics of education and science. During her visit, she exchanged ideas with ZEW researchers on the ZEW Innovation Survey, the German contribution to the European Union’s “Community Information Survey” (CIS). Wytse Joosten will coordinate the CIS in Belgium.

A group of international students from the University of Mannheim visited the Centre for European Economic Research (ZEW), Mannheim, on 7 November 2018. The students visited ZEW in the context of the “Step by Step” project by the International Office of the University of Mannheim. The project is funded by the German Academic Exchange Service (DAAD) and aims to support international full-time students on their way into the German labour market.

The Advisory Council of the Bundesnetzagentur (Federal Network Agency) has approved the proposed auction rules for the allocation of 5G frequencies in spring 2019. Professor Achim Wambach, president of the Centre for European Economic Research (ZEW), Mannheim, and chair of the Monopolies Commission, comments on the award conditions which will determine the allocation procedure.

Direct government transfers like child benefit payments (Kindergeld) are spent on children. Contrary to existing prejudices, parents do usually not misuse child benefits by spending the money on alcohol, tobacco or entertainment electronics. Instead, they invest it in larger family homes, better child care, education and their children’s hobbies. What is more, child benefit payments do no lead to a reduction in the parents’ working hours. These are the findings of a recent study carried out by the Centre for European Economic Research (ZEW) in Mannheim on behalf of the Bertelsmann Stiftung.

In the most recent survey for November (31/10/2018–14/11/2018), expectations regarding the Chinese economy have taken a nosedive. The CEP Indicator, which reflects the expectations of international financial market experts regarding China’s macroeconomic development over the coming twelve months, has fallen 28 points to a current reading of minus 30.0 points (October 2018: minus 2.0 points). This is the lowest reading since the survey was begun in mid-2013. The indicator is thus once again well below the long-term average of 3.4 points.

In order to attract new employees, companies in the German information economy are increasingly opting for e-recruitment solutions. While in 2016 almost 72 per cent of companies in the information economy (ICT sector, media service providers and knowledge-intensive service providers) used online options such as job portals, company websites and social media platforms to recruit staff, this figure increased to over 77 per cent in 2018. This is the result of a representative survey among companies in the German information economy, conducted by the Centre for European Economic Research (ZEW), Mannheim, in September 2018.

German Chancellor Angela Merkel and French President Emmanuel Macron have called for the creation of a “real, true European army”. In a joint study conducted by the Bertelsmann Stiftung and the Centre for European Economic Research (ZEW), Mannheim, researchers had already emphasised the economic benefits of a combined European army. Professor Friedrich Heinemann, head of the ZEW Research Department “Corporate Taxation and Public Finance” and co-author of the study, comments on this matter.

Twenty years ago, the liberalisation of the German electricity market put an end to the monopoly position of local electricity suppliers and made it possible for end consumers to switch to alternative suppliers. Despite this liberalisation, incumbent electricity companies tend to increase their baseline electricity tariffs if more consumers search for cheaper tariffs on the internet. At the same time, they lower the rates of their cheaper tariff option offered in addition to their baseline tariff. These prices are, however, still significantly higher than the electricity tariffs of competing suppliers.

Hence, consumers searching for cheaper electricity suppliers online benefit from lower prices, whereas households who remain in the more expensive baseline electricity tariff face additional costs. These are the findings of a study conducted by the Centre for European Economic Research (ZEW), Mannheim, in collaboration with MINES ParisTech, the University of Vienna and the Vienna University of Economics and Business. The study is based on data on the German energy economy from Ene’t, a German software and data provider for the electricity industry.

The ZEW Indicator of Economic Sentiment for Germany recorded an increase of 0.6 points in November 2018 and now stands at minus 24.1 points. Although the indicator has improved slightly, it is still clearly in negative territory and remains well below the long-term average of 22.7 points. The assessment of the current economic situation in Germany decreased considerably in November, with the corresponding indicator falling by 11.9 points to a level of 58.2 points.

It pays off for the German government to invest in vocational training and higher education. The contribution of workers with vocational training or a university degree to public revenues through taxes, levies or reduced transfer payments over the life cycle exceeds, on average, the amount that the state previously invested in their education. This is the result of a recent study conducted by the Centre for European Economic Research (ZEW) on behalf of the DIPF | Leibniz Institute for Research and Information in Education, Frankfurt/Main, for the National Report on Education 2018.

The study considers net earnings and returns on education investments, and compares the findings with previous ZEW research findings.

Digital technologies already play a significant role in production processes in Germany’s chemical and pharmaceutical industries. There are nonetheless considerable opportunities for further digital innovation among German businesses in the sector. In addition, many companies in the chemical industry are facing major challenges in the fields of education and further training as well as data protection. These are the key findings of a study on innovation indicators for the chemical industry in 2018 (“Innovationsindikatoren Chemie 2018”) with a focus on digitalisation, which was conducted by the Centre for European Economic Research (ZEW) and the Leibniz University Hannover’s Center for Economic Policy Studies (CWS), on behalf of the German Chemical Industry Association (VCI).

The economic sentiment for the third quarter as well as the expectations for the fourth quarter of 2018 among businesses in the German information economy continues to be positive, as suggested by the ZEW Economic Sentiment Indicator, which rose by 4.6 points to a current reading of 71.2 points (Q2 2018: 66.6 points). This means that a vast majority of the companies in the information economy evaluates the economic situation positively. The ZEW Economic Sentiment Indicator is the result of a survey among companies in the German information economy, conducted by the Centre for European Economic Research (ZEW), Mannheim, in September 2018.

Our publications are available to download in PDF format. PDF files can be viewed using, among others, Acrobat Reader, which you can download for free at https://acrobat. adobe. com/us/en/acrobat/pdf-reader. html

Wolfgang Briglauer; Enrico Maria Camarada; Ingo Vogelsang
Path Dependencies versus Efficiencies in Regulation: Evidence from "Old" and "New" Broadband Markets in the EU

Sven Heim; Bastian Krieger; Mario Liebensteiner
Unbundling, Regulation and Pricing: Evidence from Electricity Distribution

Guido Neidhöfer
Intergenerational Mobility and the Rise and Fall of Inequality: Lessons from Latin America

Christian Dustmann; Bernd Fitzenberger; Markus Zimmermann
Housing Expenditures and Income Inequality

Bettina Peters, Mark J. Roberts; Van Anh Vuong
Firm R&D Investment and Export Market Exposure

Alexander Edwards; Maximilian Todtenhaupt
Capital Gains Taxation and Funding for Start-Ups

Sarah Ciaglia, Clemens Fuest and Friedrich Heinemann
What a Feeling?! How to Promote ‘European Identity’

Irene Bertschek, Jörg Ohnemus, Daniel Erdsiek and Christian Rammer
2017 Cultural and Creative Industries Monitoring Report – Short Version

This issue contains Focus on Europe with the following articles:

Christian Rammer
Dokumentation zur Innovationserhebung 2017 (Documentation for the Innovation Survey 2017)

Michael F. Maier and Boris Ivanov
Selbstständige Erwerbstätigkeit in Deutschland (Self-Employment in Germany)

Birgit Gehrke and Christian Rammer
Innovationsindikatoren Chemie 2018 (Innovation Indicators in the Chemical Industry 2018)

Christian Rammer, Angela Jäger, Bastian Krieger, Christian Lerch, Georg Licht, Bettina Peters and Alfred Spielkamp
Produktivitätsparadoxon im Maschinenbau (The Productivity Paradox in Mechanical Engineering)

Rainer Bräutigam, Friedrich Heinemann, Thomas Schwab and Christoph Spengel
Analyse der US-Steuerreform (Analysis of the US Tax Reform)

Holger Stichnoth, Lukas Riedel, Sebastian Camarero Garcia, Philipp Dörrenberg, Carina Neisser, Martin Ungerer and Nils Wehrhöfer
Kommt das Geld bei den Kindern an? (Is the Money Spent for the Benefit of Children?)

Climate Impact Chains in a Globalized World: A Challenge for Germany

Digitalisation and Product Innovation in SMEs

Development of a Quality Element

Do All-Day Primary Schools Contribute to Maternal Labor Supply?

Indicators for Innovation Systems: Interactions between the Science and the Business Sector and Absorptive Capacity of Firms

Job-Related Availability During Leisure Time

MaTax – Causal Effects of Private Versus Public Health Insurance

Restructuring and Extension of a Sample of the 2018 KfW Business Survey Panel

The Relevance of Non-State Actors for Individual Climate Protection Activities and Climate Policy: A Theoretical, Experimental, and Empirical Analysis (NostaClimate)

Location of the event: International Congress Centre Katowice, Poland

Speaker: Professor Manuel Bagues (University of Warwick, UK)
Location of the event: ZEW, Mannheim

Location of the event: ZEW, Mannheim

Location of the event: International Congress Centre Katowice, Poland

Location of the event: University of Mannheim

Speaker: Professor Joel Waldfogel (University of Minnesota, USA)
Location of the event: ZEW, Mannheim

Speaker: Klaus Fröhlich (BMW Group, Munich)
Location of the event: ZEW, Mannheim

Picture Credits: press release of 26 November 2018: iStock.com/Easyturn, press release of 21 November 2018: iStock.com/wundervisuals, press release of 15 November 2018: iStock.com/PeopleImages, press release of 14 November 2018: iStock.com/ansonsaw, press release of 12 November 2018: iStock.com/kasto80, press release of 5 November 2018: iStock.com/alengo, news article of 2 November 2018: TOTAL E-QUALITY Deutschland e. V., news article of 30 October 2018: Baden-Württemberg International (bw-i)
 
All further pictures: ©ZEW