Welfare state, Immigration, Income redistribution, Reciprocity, European Social Survey,
We review the empirical literature that studies the effect of ethnic diversity on public spending and on individual support for the welfare state. The survey puts a particular focus on the fast-growing literature that uses experiments to study the effects of ethnic diversity. Many of these studies have appeared since the pioneering survey by Alesina and La Ferrara and have not been covered by a survey before.
Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. How can retirement savings be increased? We explore a unique policy change in the context of the German pension system to study this question. As of 2005 (with a phase-in period between 2002-04), the German pension administration started to send out annual letters providing detailed and comprehensible information about the pension system and individual expected public pension payments. This reform did not change the level of pensions, but only provided information to individuals about their expected pension payments. Using German tax return data, we exploit an age discontinuity to identify the effect of these letters on the behavior of individuals. We find an increase in tax-deductible private retirement savings and provide evidence that this is not due to a crowding-out of other forms of savings. We also show that labor earnings, i.e. the most direct way to increase public pensions, increase after receiving the letter. Terms of use: Documents inJEL-Codes: H550, H240, D140.
This paper asks whether a gap in spouses' subjective happiness matters per se, i.e. whether it predicts divorce. We use three large panel surveys to explore this question. Controlling for the life satisfaction levels of spouses, we find that a larger happiness gap, even in the first year of marriage, increases the likelihood of a future separation. This association even holds for couples where both spouses are identified as being better off than in their outside option. We interpret this observation as reflecting a concern for relative utility. To the best of our knowledge, this effect has not been taken into account by any existing economic models of the household.The relationship between happiness gaps and divorce is consistent with the fact that couples who are unable to transfer utility are more at risk than others. It is also possible that assortative mating by happiness baseline level reduces the risk of separation. However, assortative mating cannot entirely explain the finding, as a widening of the happiness gap over time increases the risk of separation. We also uncover an asymmetry in the effect of happiness gaps: couples are more likely to break-up when the difference in life satisfaction is unfavorable to the woman. De facto, divorces appear to be initiated predominantly by women who are less happy than their husband. This asymmetry suggests that the effect of happiness gaps is grounded on motives of relative deprivation, rather than on a preference for equal happiness.The presence of this new argument in spouses' utility is likely to modify their optimal behavior, e.g. in terms of labor supply. It should also be taken into account for public policy measures concerning gender-based labor incentives.
Die Dis cus si on Pape rs die nen einer mög lichst schnel len Ver brei tung von neue ren For schungs arbei ten des ZEW. Die Bei trä ge lie gen in allei ni ger Ver ant wor tung der Auto ren und stel len nicht not wen di ger wei se die Mei nung des ZEW dar.Dis cus si on Papers are inten ded to make results of ZEW research prompt ly avai la ble to other eco no mists in order to encou ra ge dis cus si on and sug gesti ons for revi si ons. The aut hors are sole ly respon si ble for the con tents which do not neces sa ri ly repre sent the opi ni on of the ZEW.Download this ZEW Discussion Paper from our ftp server:ftp://ftp.zew.de/pub/zew-docs/dp/dp10007.pdf Non-technical summaryThis paper asks whether the gap in subjective happiness between spouses matters per se for a couple's risk of separation. We use three panel databases to explore this question.Controlling for the level of life satisfaction of spouses, we find that a higher satisfaction gap, even in the first year of marriage, increases the probability of a separation. We show that this basic relationship between the gap in satisfaction and the probability of separation is robust to a number of different specifications. Moreover, the relationship holds in all three countries that we study: Germany, the UK, and Australia.Our interpretation is that this higher separation probability results from comparisons of well-being between spouses and from an aversion to an unequal distribution of wellbeing. While a growing number of studies has already underlined that comparisons affect individual well-being, the advantage of the present article is to focus on a plausible and important reference group, namely one's own spouse. Another contribution of the article is to show that subjective variables (here, the gap in life satisfaction) matter for objectively measured outcomes such as a couple's separation. Finally, we believe that our result is interesting for the theoretical literature on the economics of the household, which has so far neglected the consequences that an unequal distribution of well-being may have.We also explore the hypothesis that it is assortative mating with respect to the baseline level of happiness that affects the risk of separation. We find that it is not only this baseline level, but also the current level of happiness that matters. First, our results hold in fixed-effects estimates that take away the effect of the initial quality of the match between spouses: fixed-effects estimates suggest that a widening of the happiness gap over time raises the risk of separation. Second, we uncover an asymmetry in the effect of happiness gaps: couples are more likely to break up when the difference in life satisfaction is unfavourable to the wife. The information available in the Australian survey reveals that divorces are indeed predominantly initiated by women, and importantly, by women who are unhappier than their husband. Hence, happiness gaps seem to matter to spouses, not only because they reflect a mismatch in terms of baseline happiness, but because th...
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