Newsletter July 2020

Digitalisation is changing the way we work; there are more and more tasks that can be automated. In the new episode of the #ZEWPodcast, moderator Carola Hesch talks to ZEW economist Professor Melanie Arntz, who sheds light on which tasks will still require human labour and how the ongoing transformation will change qualification profiles for workers. There is good news for those who are worried about the end of human labour: “The bottom line is that we’re not going to run out of work.” While the first two editions were published in German, there are plans to produce English editions of the podcast as well.

The conference on the Economics of Information and Communication Technologies at ZEW Mannheim has long been considered one of the most important international scientific events in the field of digital economy. The event, which took place for the 18th time, was organised by the ZEW Research Department “Digital Economy” on 2 July 2020 – with one major innovation: Due to the ongoing coronavirus pandemic, the event was held virtually for the first time ever and had a reduced programme. With almost 300 international researchers it was extremely successful.

After days of negotiations, the European Council agreed on the EU Recovery Fund package and the next EU multiannual financial framework. The “Next Generation EU” package, which is intended to speed up the recovery from coronavirus-induced recession, remains at 750 billion euros. However, the 500 billion euros in grants provided for in the Commission proposal have been reduced to 390 billion euros, with the rest being made available to Member States as loans. The whole package is financed by EU borrowing, which is to be repaid by 2058.

Climate protection and climate change remain important issues during the coronavirus pandemic. In a recent survey, more than 90 per cent of German households stated that the importance of climate change has not changed or has even increased since the beginning of the year. The survey was funded by the Federal Ministry of Education and Research (BMBF) and carried out on behalf of RWI – Leibniz Institute for Economic Research, as well as ZEW Mannheim and other cooperation partners.

How are inequalities changing as a consequence of the coronavirus crisis? What are the big challenges that await us in the world of tomorrow? What can be done to tackle inequalities in the future? Five renowned scholars gave their perspectives on these crucial questions in a special policy session of the ZEW research seminar series, held online on 19 June 2020 with almost 300 participants from all parts of the world.

There was great excitement surrounding the virtual regional final of the YES! – Young Economic Summit: Who would make it to the grand national final? In the end, two teams prevailed – the Albert-Magnus-Gymnasium Stuttgart mentored by economists from ZEW Mannheim, and the European School RheinMain from Bad Vilbel mentored by SAFE Frankfurt. In addition, the Lise-Meitner-Gymnasium from Maxdorf, also mentored by ZEW, received a wildcard for the federal final in September. ZEW President Achim Wambach, who was live on air, emphasised how “great it is that so many teams, so many teachers and researchers continued despite the difficult circumstances.”

Driven by the motto “Together for Europe’s recovery”, the focus of the German presidency of the Council of the EU in the next six months will be on overcoming the coronavirus crisis. ZEW expert on Europe, Professor Friedrich Heinemann, and moderator Carola Hesch have discussed the challenges this will bring for the German government in the new #ZEWPodcast “Wirtschaft • Forschung • Debatten”/“Economy • Research • Debates”. He makes it unmistakably clear that “swift success is important here. Otherwise the European money will not flow until the crisis is over.” While the first edition was published in German, there are plans to produce English editions of the podcast as well.

Eleven researchers of the ZEW Research Department “Environmental and Resource Economics, Environmental Management” are presenting their latest work at this year’s digital conference of the European Association of Environmental and Resource Economists (EAERE) from 23 June to 3 July 2020.
 
The eleven contributions of the ZEW researchers address issues such as technological progress, international environmental policy, the successful design of incentive systems to meet the Paris climate targets and the importance of e-mobility.

ZEW Mannheim is pleased to announce the seventh edition of the Annual MannheimTaxation Conference held on 10 September 2020 as a one-day virtual conference. It is organised by the Leibniz ScienceCampus MannheimTaxation, which is a joint initiative of the University of Mannheim and ZEW Mannheim. This year's keynote will be given by Danny Yagan from the University of California, Berkeley, USA. Additionally, we will discuss the fiscal consequences of the coronavirus crisis in a high-level policy session.
 
We invite submissions on any topics broadly related to tax research, including papers from economics, accounting, law, political science, and interdisciplinary contributions. The conference focuses particularly on applied and empirical papers related to business taxation, tax avoidance and evasion, behavioural responses to taxation, tax harmonization in the European Union, political economy of taxation, international taxation, and tax law. Please submit full papers or extended abstracts to MannheimTaxation@zew.de no later than 31 July 2020.

ZEW Mannheim is pleased to announce the Leibniz Network’s twelfth interdisciplinary conference on Real Estate Markets and Capital Markets (ReCapNet). The event will take place online in mid-November 2020 and is open to all researchers interested in the interactions between real estate markets and capital markets. This year's keynote will be given by Edward Glaeser from Harvard University, Cambridge, USA.
 
The conference focuses particularly on “Global Trends and Real Estate: Risks and Challenges”. A list of further potential topics is included in the call for papers. Submissions on these and related areas at the intersection of real estate finance and real estate economics are encouraged. Please submit full papers without author-identifying information in PDF format to recapnet@zew.de no later than 16 August 2020.

Professor Bernhard Ganglmair took up the chair of economics with a focus on innovation and competition at the University of Mannheim in mid-July 2020. The appointment of the economist, who has been head of ZEW’s “Competition and Innovation” Junior Research Group since January 2019, will further strengthen the intensive exchange between ZEW Mannheim and the University of Mannheim.

Katharina Pakebusch took over as head of the human resources department at ZEW Mannheim on 1 July 2020. “We want to make HR fit for the future and use new opportunities to support our researchers in the best possible way. I am looking forward to this new task,” comments Katharina Pakebusch. In her new position she succeeds Doris Brettar, who has taken over as head of ZEW’s “General Services” Department.

Katharina Pakebusch has several years of experience in staff management and is the contact person for the institute’s management level, especially due to her expertise in labour law issues but also in recruiting and supporting staff. She has been working at ZEW Mannheim since 2018. Prior to that she completed her Master of Laws with a focus on labour law and management/HR at the University of Mannheim.

In the second quarter of 2020, the German economy experienced the sharpest drop in its economic output ever recorded by the German Federal Statistical Office in Wiesbaden since it started its quarterly calculations in 1970. In comparison to the previous quarter, the already low gross domestic product (price, seasonally and calendar adjusted) fell by 10.1 per cent. When compared to the second quarter of 2019, this represents a decrease of 11.7 per cent. Professor Friedrich Heinemann, head of the Research Department “Corporate Taxation and Public Finance” at ZEW Mannheim, comments on this matter.

As expected, the US Federal Reserve left the target range for the federal funds rate unchanged between 0.0 and 0.25 per cent. In addition, it will continue its large-scale bond purchases and direct lending to the corporate sector. Professor Friedrich Heinemann, head of the Research Department “Corporate Taxation and Public Finance” at ZEW Mannheim comments on this matter.

The economic sentiment in the information and communication technology sector (ICT) in Germany further deteriorated in the second quarter of 2020: The ZEW sentiment indicator for the German ICT sector decreased by 3.5 points compared to the first quarter of 2020, falling to a historic low of 47.6 points. This marks the first time that the ZEW sentiment indicator has dropped below the critical 50-point mark since the survey began in 2011, indicating a negative development of the business situation. In addition to reporting negative expectations regarding turnover and demand for business products, firms in the ICT sector are also pessimistic about imminent personnel changes.

In the current July survey (7–13 July 2020), the CEP indicator increased slightly by 1.2 points, reaching a new value of 31.7 points. The CEP indicator, based on the China Economic Panel (CEP) in cooperation with Fudan University, Shanghai, reflects the economic expectations of international financial market experts for China on a 12-month basis.

If the recovery fund proposed by the European Commission is to reach its goal of overcoming the coronavirus recession, the European Council will have to make comprehensive adjustments to the proposal at its forthcoming summit. “Otherwise, the majority of funds will only be made available after the coronavirus pandemic has long passed,” warns ZEW research department head Professor Friedrich Heinemann. This is the result of a ZEW study conducted on behalf of the think tank, Initiative Neue Soziale Marktwirtschaft (“New Social Free Market Initiative”, INSM).

The ZEW Indicator of Economic Sentiment for Germany decreased slightly in July 2020. Expectations are now at 59.3 points, 4.1 points lower than in the previous month. The assessment of the economic situation in Germany has improved slightly for the second time since January 2020. The corresponding indicator currently stands at minus 80.9 points, an increase of 2.2 points compared to June.

Even before the coronavirus pandemic, Eurosystem central banks were increasingly buying disproportionately large amounts of bonds issued by highly indebted euro area countries. In addition, the rules of the purchase programmes have been continuously relaxed since 2015. These are the findings of a study on the ECB’s sovereign purchase programmes, conducted by researchers of ZEW Mannheim with the support of the Brigitte Strube Stiftung.

Unemployed individuals who become self-employed are, on average, less successful after having received unemployment benefits for a longer period of time. A longer entitlement to unemployment benefits means that many of those affected remain unemployed for a lengthier period. This, in turn, entails negative consequences for the success of the ventures of unemployed individuals. These are the findings of a recent study conducted by ZEW Mannheim and the University of Zurich. “If people feel pressured to become self-employed as a way out of unemployment, they tend to be less motivated and are less likely to be successful,” says Sebastian Camarero Garcia, a researcher in ZEW’s “Social Policy and Redistribution” Department.

German unemployment only saw a moderate rise since the onset of the coronavirus crisis. Meanwhile, an unprecedented number of workers remain in short-time work schemes. As the COVID-19 pandemic progresses, however, unemployment rates are likely to rise. For those affected, unemployment imposes not only economic, but also social costs, which has been illustrated in a recent ZEW expert brief. “Policymakers should therefore give utmost priority to preventing unemployment in order to mitigate the severe social consequences,” says Dr. Laura Pohlan, a researcher in the “Labour Markets and Human Resources” Department at ZEW and co-author of the study.

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

Annika Havlik and Friedrich Heinemann
Sliding Down the Slippery Slope? Trends in the Rules and Country Allocations of the Eurosystem's PSPP and PEPP
Study with support from the Brigitte Strube Stiftung

Martin Peitz
Economic Policy for Digital Attention Intermediaries

Guido Neidhöfer and Claudio Neidhöfer
The Effectiveness of School Closures and Other Pre-Lockdown COVID-19 Mitigation Strategies in Argentina, Italy, and South Korea

Sebastian Camarero Garcia and Martin Murmann
Unemployment Benefit Duration and Startup Success

Robert Aue, Thilo Klein, and Josue Ortega
What Happens when Separate and Unequal School Districts Merge?

Lei Li, Andreas Löschel, Jiansuo Pei, Bodo Sturm, and Anqi Yu
Trade Liberalization and SO₂ Emissions: Firm-Level Evidence from China’s WTO Entry

Philipp Böing and Paul Hünermund
A Global Decline in Research Productivity? Evidence from China and Germany

Bernhard Ganglmair, Nadine Hahn, Michael Hellwig, Alexander Kann, Bettina Peters, and Ilona Tsanko
Price Markups, Innovation, and Productivity: Evidence from Germany

Boris Ivanov, Friedhelm Pfeiffer, and Laura Pohlan
COVID-19 und die sozialen Folgen für Arbeitslose (COVID-19 and the Social Consequences for the Unemployed An Evaluation Based on Estimates with Individual Data)

Moritz Lubczyk
Auswertungen IAB/ZEW-Gründungspanel (Evaluations IAB/ZEW Start-Up Panel)
Zusatzstichproble Baden-Württemberg, Welle 12 (Additional Sample Baden-Württemberg, Wave 12)

Moritz Lubczyk, Martin Murmann and Simona Christine Murmann
Auswirkungen des gesetzlichen Mindestlohns auf die Solo-Selbstständigkeit (Effects of the Statutory Minimum Wage on Solo Self-Employment)

Sandra Gottschalk and Moritz Lubczyk
Gründungen in Baden-Württemberg (Start-Ups in Baden-Württemberg)
Sonderauswertungen aus dem IAB/ZEW Gründungspanel (Extra Analyses with the IAB/ZEW Start-Up Panel)

Manuel Frondel, Gerhard Kussel, Tobias Larysch and Daniel Osberghaus
Klimapolitik während der Corona-Pandemie: Betroffenheit und Einstellungen privater Haushalte in Deutschland (Climate Policy During the Coronavirus Pandemic: Impact and Attitudes of Private Households in Germany)

Linkage Between the Identifiers of the Mannheim Enterprise Panel and Establishment Data of the German Federal Agency of Labor

The Link between Digitalisation and Innovation in SMEs

In order to support the nationwide containment measures against the coronavirus, ZEW is examining to what extent the events listed here can take place virtually. Individual dates may be postponed. The current status of the events can be found in the ZEW Events Calendar. If you have any questions, please don’t hesitate to contact our event team at event@zew.de.

Speaker: Jack Liebersohn (University of California, Irvine, USA)
Location of the event: Online via ZOOM

Speaker: Thao Le (Georgia State University, Atlanta, USA )
Location of the event: Online via ZOOM

Speaker: Danny Yagan (University of California, Berkeley, USA)
Location of the event: Online via ZOOM

Speaker: Ingo Vogelsang (Boston University, USA and ZEW)
Location of the event: Online via ZOOM

Speaker: Thomas K. Bauer (Ruhr University Bochum) and Dominik Hangartner (ETH Zurich, Switzerland)
Location of the event: Online via ZOOM

Picture Credits: press release of 30.07.2020: Anna Logue Fotografie/ZEW, press release of 29.07.2020: Anna Logue Fotografie/ZEW, press release of 21.07.2020: RWI/ZEW, news article of 21.07.2020: Anna Logue Fotografie/ZEW, press release of 15.07.2020: iStock.com/chris-mueller, press release of 13.07.2020: instamatics, press release of 09.07.2020: iStock.com/Vladimir Vladimirov, press release of 07.07.2020: iStock.com/shaunl, news article of 02.07.2020: YES! – Young Economic Summit
 
 
All further pictures: ©ZEW