EPoS has funded the following data acquisitions and/or data collections:

Research project: The CRC identifies the question “How to promote equality of opportunity?” as a major societal challenge. Previous research has shown that especially students from disadvantaged families hold biased belief about returns to education in general and effort in particular. They systematically underestimate the returns to effort and education and therefore underinvest in learning effort. This creates a vicious circle: students from disadvantaged families hold negative beliefs about returns to effort and schooling, according to their beliefs they invest too little, this leads to bad education outcomes and manifests intergeneration persistence. Therefore, the aim of this project is to explore if the introduction of an affirmative action (AA) policy holds the potential to adjust these biased beliefs and thereby promote equality of opportunity.

Research project: A substantial share of children experience some type of family distress before their 18th birthday, such as parental unemployment, divorce or the death of a family member. These setbacks often are associated with a negative influence on children's educational performance, and consequently may even hamper labor market outcomes. This raises the concern that events of family distress create unequal childhood circumstances that may impede equality of opportunity. As often it will not be feasible to prevent these events from occurring, an important channel to ensure that children are still given equal chances is through the design of the education system. The way the educational setup interacts with negative life events is vital for the long-term consequences of such events. This paper investigates the importance of the education system in how the effects of family distress materializes.

Research project: Parents are important for the development of children. Yet, not much is known about factors determining how parents decide to raise their children. This project focuses on parental beliefs to shed light on parental decision-making processes. More specifically, it studies parental beliefs about the returns to two factors affecting the development and long-term outcomes of children: (i) parenting styles defined by the extent of warmth and control parents employ in raising their children, and (ii) neighborhood quality. Previous theoretical research suggests that the economic environment (i.e., neighborhoods) creates incentives to engage in different forms parenting. As parents decide where to live and how to raise their children, it is therefore important to understand how parents perceive environments and parenting to interact.

Research Project: We plan to investigate the effect of birth timing on short-run birth outcomes and longer-run health as well as educational outcomes using an IV strategy to address selection into month-of-birth. Moreover, this methodology will allow us to explore possible mechanisms behind the observed patterns (such as the role of infectious diseases).

Research project: This project aims to explore how earnings risk affect the joint labor supply decision problem of spouses in the context of the German reunification. It uses administrative data from the Microcensus to document that West Germany experienced an increase in the permanent and transitory component of earnings risk during the decade following the fall of the Berlin Wall in 1989. Simultaneously, the labor force participation of married women with children increased by 30% during the same time period, while the labor force participation of married men remained constant. To what extent do married women increase their labor supply as an informal insurance mechanism against increasing earnings risk faced by the family? Does the presence of earnings risk affect the human capital accumulation of married women? Is the response of households to public policy reforms, such as increases in the availability of childcare or cash transfers, affected by the presence of earnings risk?

Research Project: In many European countries, where permanent workers enjoy a high level of job protection, young workers commonly receive a fixed-term contract upon entry into the labor market. Fixed-term positions act as a trial period and have a maximum duration by law. This implies that workers face two extremes at the end of such contracts: They either receive a permanent position or must leave the firm to find another employer. The latter outcome is very costly for young workers as human capital accumulation is interrupted and workers are exposed to an extended period of unstable employment. The goal of this project is to study how firms and workers interact given the duality of fixed-term and permanent contracts and how it contributes to the gender wage gap. In particular, in the context of the Netherlands, we plan to examine whether (i) fertility depends on being promoted to a permanent position, (ii) firms anticipate (i) and promote men and women differently, given equal qualifications, and (iii) women and men self-select across firms and industries due to heterogeneity in promotion rates.

Research project: We document the sources behind earnings losses of job displacement adapting the generalized random forest due to Athey et al. (2019). Using administrative data from Austria over three decades, we show that displaced workers face large and persistent earnings losses. We identify substantial heterogeneity in losses across workers. The interquartile range of the estimated losses is equal to 52,000 euros, which is more than 80% of average losses. The most vulnerable are high-income, high-tenure workers employed at well-paying firms in the manufacturing sector. Our methodology allows us to consider many competing theories of earnings losses prominently discussed in the literature. The two most important factors are the displacement firm's wage premia and the availability of well-paying jobs in the local labor market, implying losses in employer specific wage components are key for the understanding of earnings losses

Research project: The data will be used to use the so-called birthcohort approach to estimate externalities in schools.

Research project: The broad purpose of the project is to investigate disparities in access to cancer treatment and health outcomes. In particular, we would like to focus on the effect of uncertainty in the choice of therapy for cancer. Economist are concerned with the behavioral implications of uncertainty in experience good markets. Uncertainty matters when you purchase a car or buy cereals, if utility-bearing characteristics are revealed to you through consumption or use. This aspect may be particularly important in the choice of treatments because oncologists operate in an uncertain environment in terms of effectiveness and side effects.

Research project: With an inventory of 2.3 million rooms, Airbnb now has more capacity than the three largest hotel chains combined. While it started as a platform for hosts to make some extra cash on the side by occasionally renting out spare rooms, multiple-unit and full-time operators are now a growing percentage of total Airbnb hosts and the company's revenue. As the nature of the business model changes, incumbents are demanding that online rivals obey the same rules that traditional suppliers are subject to. Among other issues, the hotel industry has accused the platform of facilitating the evasion of local sales and lodging taxes by hosts because Airbnb does not reveal the identity or address of hosts. While hosts have a legal obligation to collect and remit applicable taxes, the costs to local jurisdictions of locating and penalizing evaders are exorbitant. Since 2014, however, Airbnb has voluntarily entered over 275 agreements with cities, counties, and states across the U.S. to enforce those taxes. Once an agreement is reached, Airbnb becomes the tax remitter by collecting taxes on applicable transaction from renters (consumers) at the point of sale, which increases tax compliance to 100% in those jurisdictions. The project aims to exploit the variation in the introduction of these agreements to better understand the nature of competition between offline and online competitors. First, we will compare changes in prices and bookings between Airbnb and hotel suppliers whren the competitive landscape is leveled by the enforcement agreements. Second, we will measure the extent of tax evasion before the enforcement of the agreement and, therefore, the competitive advantage that Airbnb suppliers enjoy over hotels in the absence of enforcement agreements. Finally, by combining our results, we will determine how equal taxation impacts consumer welfare and the underlining market structure in the short-term accommodation industry.

Research project: This project studies whether media content can affect the consumption behavior of households. To measure household consumption, data is drawn from the Nielsen Homescan panel, which tracks the expenditures of more than 100,000 US households between 2004 and 2018.

Research project: We use these data in a joint project between projects B03 (Volker Nocke, Nicolas Schutz) and B06 (Harald Fadinger). The research team is completed with Holger Breinlich (U. Surrey). In this project we structurally estimate export behavior in the presence of oligopolistic firms. The data allows us to estimate product-level demand elasticities and to compute firm-product-specific qualities and markups. This allows us to gauge firms’ market power in individual markets. We then use the previous information to estimate gravity models in the presence of oligopostic competition. In particular, we study how trade flows react to trade barriers, such as tariffs, once we take into account that market power (and thus markups) systematically co-vary with them. Obtaining consistent estimates of trade elasticities is highly relevant for correctly assessing welfare gains from trade liberalization and free-trade agreements. Thus, our results will be very relevant for policy makers. Moreover, we can track firms’ markups over time, which enables us to measure changes in market power in European product markets.

Research project: The CRC identifies the question “How to regulate markets?” as a major societal challenge. Global climate change presents an urgent case for regulation, as it is caused by carbon dioxide (CO2) emissions that are released as a negative externality from fossil fuel consumption. Since 2005, the cornerstone of such regulation in Europe is an emissions trading scheme for CO2 and other greenhouse gases, the EU ETS. The aim of this project is to provide empirical evidence on how this policy has fared in terms of emissions reductions, possible adverse impacts on economic competitiveness, and incidence. To this end, the project will conduct econometric analysis based on high-quality, restricted-access microdata of manufacturing firms in France and Germany.

Research Project: In this project we analyze the importance of grandparents' labor supply spillovers on maternal labor supply and other outcomes including effects on the third generation making use of a policy change which increases the costs of early retirement.

Research project: The purpose of our ongoing data collection is to generate new insight into household financial decision-making relating to the stock market. Since May 2018, we have been eliciting ambiguity attitudes about stock market returns twice annually, using the incentivised design of Baillon et al. (Econometrica, 2018). This design allows us to disentangle subjective beliefs about returns from ambiguity about the market resulting from its inherent uncertainty, and thus sheds new light on household investment choices. Together with data on risk preferences, cross-sectional variation in the measures we collect allows us to go beyond existing models of portfolio choice in explaining why some households place a greater share of their savings into stocks than others. Once we have fielded sufficiently many survey waves, we will be able to investigate the evolution of stock market beliefs and ambiguity attitudes over time. This will help us understand the potential impact of policies such as improving financial literacy on households' financial decisions, as we will be able to analyse how stock market beliefs and attitudes adapt in response to new information.

Research project: The first project is on providing evidence on how market participants form exchange rate expectations. I am going to analyze exchange rate forecast patterns in countries with different monetary policies. Literature documents that the real exchange rate (defined as the nominal exchange rate divided by price level) mean reverts in 1-2 years, which means that deviations in real exchange rate are eventually corrected. The correction can either come from the nominal exchange rate or the price level. In economies with inflation targeting monetary regimes, price level is stable and it is documented that the correction comes from the nominal exchange rate. Then, real exchange rate movements have predictive power on the nominal exchange rate. With a comprehensive data on expectations, we can test whether real exchange movements change expectations on the path of the nominal exchange rate. The second project involves using interest rate data combined with the exchange rate expectations to construct expected interest rate spread in emerging markets. The spread that we construct is the return to carry trade, borrowing in dollars and investing in emerging market currencies. Then, we can analyze the determinants of expected returns to carry trade. Positive expected returns are likely to be associated with higher capital flows to emerging markets. Both projects aim at guiding policymakers about the role of policy instruments as well as macro variables on the formation of market expectations of exchange rates, capital flows and interest rates.

Research project: This includes two CRC projects that both investigate transmission channels of monetary policy. In the first project, we investigate the role of markup dispersion for monetary transmission. Markup dispersion reflects misallocation of factors across firms, which can explain fluctuations in aggregate productivity. Using high-frequency data, we construct an up-to-date set of monetary policy shocks. We then document that markup dispersion responds to changes in monetary policy and that this response matters for understanding the effects of monetary policy for aggregate productivity. We further show that heterogeneous price rigidity can theoretically explain the evidence and is supported empirically. In the second project, we study the role of debt maturity for monetary transmission. Using corporate bond-level data, we show that firms with debt maturing at the time of monetary tightening invest significantly less than other firms. Building on the evidence, we develop a New Keynesian model in which firms are subject to idiosyncratic shocks and can finance themselves via equity, short-term and long-term debt. We use the model to understand the channels behind the empirical evidence and the implications for monetary policy.

Research project: In this study, we analyze how the parents of young children react to the change in working conditions during the COVID-19 pandemic using representative panel data from the Netherlands spanning four waves from 2019 to 2021. We find that over the course of the pandemic, fathers increase childcare hours leading to a more egalitarian division of childcare between parents. We show that this change can be fully accounted for by fathers gaining asymmetrically more temporal flexibility through the shift to remote work accelerated by the pandemic. Additionally, we find evidence that mothers whose spouses have remote work possibilities increased their working hours over the course of the pandemic. Our results provide evidence that part of the unequal division of labor within families with respect to market and non-market work is driven by an asymmetric distribution of temporal flexibility. This asymmetry can be the result of joint household optimization when temporal flexibility in jobs is necessary for childcare provision but punished in terms of remuneration. In particular, our results suggest that if remote work becomes more widely accepted by employers, the division of non-market work within households can become more equal in the long term – even without a shift in norms or preferences.