I am an Assistant Professor of Economics at Maastricht University.
My research is on the intersection of public, urban, and labor economics
with a particular focus on the effects of taxes and the study of inequality.
Research
Working Papers
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“Fiscal and Economic Effects of Local Austerity”,
with Melinda Fremerey and Andreas Lichter,
CESifo Working Paper, No. 9800, June 2022.
Abstract
We study the consequences of a large-scale austerity program targeting financially-constrained municipalities in Germany. For identification, we exploit the quasi-random assignment of treatment among equally-distressed municipalities using a difference-in-differences design. The policy helped targeted municipalities to consolidate budgets. Whereas the amount of fiscal consolidation was homogeneous among treated municipalities, strategies of consolidation differed between smaller and larger municipalities. The former primarily cut spending on local public services, whereas the latter predominantly relied on tax increases. We detect no adverse economic effects but sizable negative effects on population levels and house prices in municipalities reducing local amenities.
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“Profit Taxation, R&D Spending, and Innovation”,
with Andreas Lichter, Ingo Isphording, Felix Pöge, Thu-Van Nguyen, and Sebastian Siegloch,
ZEW Discussion Paper, No. 21-080, November 2021.
Abstract
We study how profit taxation affects plants’ R&D spending and innovation activities. Relying on geocoded survey panel data which approximately covers the universe of R&D-active plants in Germany, we exploit around 7,300 changes in the municipal business tax rate over the period 1987–2013 for identification. Applying event study models, we find a negative and statistically significant effect of an increase in profit taxation on plants’ R&D spending with an implied long-run elasticity of -1.25. Reductions in R&D are particularly strong among more credit-constrained plants. In contrast, homogeneity of effects across the plant size distribution questions policy makers common practice to link targeted R&D tax incentives to plant size. We further find lagged negative effects on the (citation-weighted) number of filed patents.
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“Welfare Effects of Property Taxation”,
with Sebastian Siegloch,
CESifo Working Paper, No. 8952, March 2021.
Abstract
We analyze the welfare implications of property taxation. Using a sufficient statistics approach, we show that the tax incidence depends on how housing prices, labor and other types of incomes as well as public services respond to property tax changes. Empirically, we exploit the German institutional setting with 5,200 municipal tax reforms for identification. We find that higher taxes are fully passed on to rental prices after three years. The pass-through is lower when housing supply is inelastic. Combining reduced form estimates with our theoretical framework, we simulate the welfare effects of property taxes and show that they are regressive.
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“The Sensitivity of Structural Labor Supply Estimations to Modeling Assumptions”,
with Andreas Peichl and Sebastian Siegloch,
IZA Discussion Paper, No. 11425, March 2018.
Abstract
There is still considerable dispute about the magnitude of labor supply elasticities. While differences in estimates especially between micro and macro models are recently attributed to frictions and adjustment costs, we show that the variation in elasticities derived from structural labor supply models can also be explained by modeling assumptions. Specifically, we estimate 3,456 different models on the same data each representing a plausible combination of frequently made choices. While many modeling assumptions do not systematically affect labor supply elasticities, our controlled meta-analysis shows that results are very sensitive to the treatment of hourly wages in the estimation. For example, different (sensible) choices concerning the modeling of the underlying wage distribution and especially the imputation of (missing) wages lead to point estimates of elasticities between 0.2 and 0.65. We hence conclude that researchers should pay more attention to the robustness of their estimations with respect to the wage treatment.
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“Asymmetric Labor-Supply Responses to Wage-Rate Changes: Evidence from a Field Experiment”,
with Philipp Dörrenberg and Denvil Duncan,
IZA Discussion Paper, No. 9683, January 2016.
Abstract
The standard labor-supply literature typically assumes that the labor supply response to wage increases is the same as that for equivalent wage decreases. However, evidence from the behavioral-economics literature suggests that people are loss averse and thus perceive losses differently than gains. This behavioral insight may imply that workers respond differently to wage increases than to wage decreases. We estimate the effect of wage increases and decreases on labor supply using a randomized field experiment with workers on Amazon’s Mechanical Turk. The results provide evidence that wage increases have smaller effects than wage decreases, suggesting that the labor-supply response to wage changes is asymmetric. This finding is especially strong on the extensive margin where the elasticity for a wage decrease is twice that for a wage increase. These findings suggest that a reference-dependent utility function that incorporates loss aversion is the most appropriate way to model labor supply.
Publications
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“The Long-Term Costs of Government Surveillance: Insights from Stasi Spying in East Germany”,
with Andreas Lichter and Sebastian Siegloch,
Journal of the European Economic Association, Vol. 19 (2), pp. 741–789, April 2021.
[online appendix,
slides,
replication files]
Abstract
We investigate the long-run effects of government surveillance on civic capital and economic performance, studying the case of the Stasi in East Germany. Exploiting regional variation in the number of spies and administrative features of the system, we combine a border discontinuity design with an instrumental variable strategy to estimate the long-term, post-reunification effect of government surveillance. We find that a higher spying density led to persistently lower levels of interpersonal and institutional trust in post-reunification Germany. We also find substantial and long-lasting economic effects of Stasi surveillance, resulting in lower income, higher exposure to unemployment, and lower self-employment.
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“Why Did Income Inequality in Germany Not Increase Further After 2005?”,
with Martin Biewen and Martin Ungerer,
German Economic Review, Vol. 20 (4), pp. 471–504, December 2019.
Abstract
While income inequality in Germany considerably increased in the years before 2005, this trend stopped after 2005. We address the question of what factors were responsible for the break in the inequality trend after 2005. Our analysis suggests that income inequality in Germany did not continue to rise after 2005 for the following reasons. First, we observe that the general rise in wage inequality that explained a lot of the inequality increase before 2005, became less steep (but did not stop) after 2005. Second, despite further increases in wage inequality after 2005, inequality in annual labour incomes did not increase further after 2005 because increased within-year employment opportunities compensated otherwise rising inequality in annual labour incomes. Third, income inequality did not fall in a more marked way after 2005 because also the middle and the upper part of the distribution benefited from the employment boom after 2006. Finally, we provide evidence that the effect of a wide range of other factors that are often suspected to have influenced the distribution such as capital incomes, household structures, population ageing, changes in the tax and transfer system and the financial crisis of 2008 did not significantly alter the distribution after 2005.
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“German Public Finances through the Financial Crisis”,
with Maximilian Blömer, Mathias Dolls, Clemens Fuest, and Andreas Peichl,
Fiscal Studies, Vol. 36 (4), pp. 453–474, December 2015.
Abstract
The German experience of the financial crisis was very different from that of most other European countries. Germany was hit by a very strong shock that was relatively concentrated in the exporting, manufacturing industries. In addition, the German labour market was very resilient during the crisis due to earlier labour market reforms and policy instruments facilitating labour hoarding. As a consequence, the public finances were only moderately affected and not many policy reforms had to be enacted. This paper presents the German experience of the financial crisis. We start by presenting the macroeconomic situation and how the crisis unfolded in Germany, before focusing on the situation of the public finances. Finally, we analyse the policy responses to the financial crisis.
Policy Contributions (in German)
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“Mehr Klartext in der Corona-Politik”,
Frankfurter Allgemeine Zeitung, May 25, 2021, p. 18 (op-ed).
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“Stellungnahme zum Antrag ‘Länderöffnungsklausel für eine zukunftsfähige Grundsteuer in NRW nutzen – Bodenwertmodell jetzt umsetzen’”,
with Sebastian Siegloch,
hearing of the budget committee, state parliament of North Rhine-Westphalia,
Stellungnahme 17/3255, November 2020.
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“Mehr Durchblick am Mietmarkt”,
Süddeutsche Zeitung, October 7, 2018, p. 18 (op-ed).
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“Grenzbelastungen im Steuer-, Abgaben- und Transfersystem: Fehlanreize, Reformoptionen und ihre Wirkungen auf inklusives Wachstum”,
with Florian Buhlmann and Andreas Peichl,
study commissioned by the Bertelsmann Stiftung, August 2017.
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“Kinderfreibeträge in der gesetzlichen Rentenversicherung – Verteilungs- und Aufkommenswirkungen”,
with Maximilian Blömer, Florian Buhlmann, Andreas Peichl, and Holger Stichnoth,
Wirtschaftsdienst, Vol. 97 (4), pp. 266–271, April 2017.
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“Analyse der Verteilung von Einkommen und Vermögen in Deutschland”,
research project for the Armuts- und Reichtumsbericht der Bundesregierung,
study commissioned by the German Federal Ministry of Labour and Social Affairs,
December 2016 (member of the project team).
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“Kinderfreibeträge in der Sozialversicherung”,
with Maximilian Blömer, Florian Buhlmann, Andreas Peichl, Sebastian Siegloch, and Holger Stichnoth,
study commissioned by the German Federal Ministry for Economic Affairs and Energy,
September 2016.
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“Integration des Solidaritätszuschlags in die Einkommensteuer – Verteilungs- und Aufkommenswirkungen”,
with Clemens Fuest, Andreas Peichl, and Holger Stichnoth,
Wirtschaftsdienst, Vol. 95 (5), pp. 319–324, May 2015.
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“Möglichkeiten zur Verbesserung der statistischen Datengrundlage zur Beschreibung höchster Einkommen und Vermögen”,
with Holger Bonin and Andreas Peichl,
study commissioned by the German Federal Ministry of Labour and Social Affairs,
ZEW Kurzexpertise, April 2015.
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“Finanzielle und Beschäftigungswirkungen unterschiedlicher Tarifverläufe alternativer Hinzuverdienstregelungen gegenüber dem Status quo”,
with Andreas Peichl, Nico Pestel, Hilmar Schneider, and Sebastian Siegloch,
study commissioned by the German Federal Ministry of Economics and Technology,
IZA Research Report, No. 46, September 2012.
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“Effizient, einfach und gerecht: Ein integriertes System zur Reform von Einkommensteuer und Sozialabgaben”,
with Andreas Peichl, Nico Pestel, Hilmar Schneider, and Sebastian Siegloch,
Perspektiven der Wirtschaftspolitik, Vol. 13 (3), pp. 196–213, August 2012.
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“Einfach ist nicht immer gerecht: Eine Mikrosimulationsstudie der Kirchhof-Reform für die Einkommensteuer”,
with Andreas Peichl, Nico Pestel, Hilmar Schneider, and Sebastian Siegloch,
Vierteljahrshefte zur Wirtschaftsforschung, Vol. 80 (4), pp. 147–160, October 2011.
Research Grants and Scholarships