German Panel Data Research Articles

Instructional quality and achievement inequality: How effective is teaching in closing the social achievement gap?

Previous empirical studies have shown that there is an association between parental socioeconomic status (SES) and educational achievement. Research has also shown that although teaching quality contributes to overall student achievement, it may have differential effects on the learning outcomes of students from lower and higher socioeconomic backgrounds. In this paper, we investigate if teaching quality is associated with the student achievement among students from low and high socioeconomic backgrounds. Using German panel data and multilevel modelling, we examined the interaction between three dimensions of teaching quality (cognitive activation, classroom management and supportive climate) and student background. Our results suggest that, overall, classroom management is positively associated with student performance. Students with high socioeconomic backgrounds seem to profit more from cognitive activation and supportive climate compared to their peers with middle and low socio-economic backgrounds: These two indicators of teaching positively moderated the association between socioeconomic background and achievement levels, thus leading to a larger achievement gap.

Income in jeopardy: How losing employment affects the willingness to take risks

Abstract Identifying the determinants of risk-taking is crucial for our understanding of a variety of choices. Using German panel data, we find that people become more risk-averse when losing work. The immediate income loss does not mediate this effect. It seems also unrelated to the loss of non-monetary benefits of work and to changes of worker’s emotional state. However, we find that risk aversion responds the more strongly to losing work the more future income is at stake, and that the effect manifests itself already on the eve of job loss when people do not yet suffer from the consequences of the event. We conclude that lower future income expectations and more uncertainty about future incomes may explain the effect of job loss on risk attitude. Our results might imply that a recession may reinforce itself as it induces people to fear job loss, which raises their risk aversion and might therefore reduce the willingness to invest in risky projects. Moreover, self-assessed risk attitude seems to measure absolute risk aversion and thus not only an underlying risk preference parameter.

Changing payment instruments and the utilisation of new medical technologies.

This paper empirically investigates the impact of additional reimbursement instruments on the diffusion of new technologies in inpatient care. Using 2010-2014 German panel data on hospital level for every patient undergoing coronary angioplasty, this study examines the utilisation of drug-eluting balloon catheters (DEB) over time while additional payment instruments changed. Hypothesising that the utilisation of DEB increased abruptly when a new reimbursement instrument came into force, we estimate a fixed effects regression comparing years with a change and years where the reimbursement instrument remained the same. The model is adjusted for patient age and severity of the disease. The utilisation of DEB increased from 8407 in 2010 to 19,065 in 2014. Hospitals used significantly more DEB when an additional payment instrument changed compared to years when it remained the same. The increase was roughly twice as large. In short, hospitals are incentivised to utilise new technologies if the reimbursement changes to an instrument that is designed in a more reliable way, e.g. including less bureaucracy or guaranteeing fixed prices.

Looking Back in Anger? Retirement and Unemployment Scarring.

Unemployment affects future working conditions and job security negatively, thus reducing life satisfaction after reemployment. These employment-related scars of unemployment should not matter anymore when a person has retired. Using German panel data, we analyze unemployed persons' transition into retirement to test whether unemployment leaves scars beyond working life and thus for reasons that are not employment-related. We find that involuntary unemployment between the last job and retirement causes a loss in life satisfaction after retirement. People who influenced or even initiated unemployment, by contrast, show no scarring. The scarring effect goes beyond what can be explained by the income loss originating from reduced pensions. It shows up independently of whether the unemployment spell directly before retirement was the only experience of unemployment in a person's career, or whether she had also experienced unemployment at earlier times. We do not find evidence that early retirement or involuntary retirement are the reasons why formerly unemployed retirees display unemployment scarring.

Does Health Affect Party Identification? Evidence from German Panel Data

ABSTRACTRecent research has shown the effect of health on voter turnout, arguing that attenuated health depresses voting. However, we know little about how health is connected to the psychological factors, such as party identification, that precede actual political participation. Employing data from the German Socio-Economic Panel (SOEP), we show that when a person’s health deteriorates, the degree of partisan attachment declines, whereas health improvement does not automatically restore the level of party identification to previous levels.

Does broadband Internet affect fertility?

The spread of high-speed (broadband) Internet epitomizes the digital revolution. Using German panel data, we test whether the availability of broadband influences fertility choices in a low-fertility setting well known for the difficulty in combining work and family life. We exploit a strategy devised by Falck and colleagues to obtain causal estimates of the impact of broadband on fertility. We find positive effects of broadband availability on the fertility of highly educated women aged 25–45. We further confirm this result using county-level data on total fertility. We show that broadband access significantly increases the share of women reporting home- or part-time working. Furthermore, we find positive effects on time spent with children and overall life satisfaction. Our findings are consistent with the hypothesis that access to broadband allows highly educated women, but not the less educated, to reconcile career and motherhood, which may promote a ‘digital divide’ in fertility.

Does life satisfaction predict reemployment? Evidence form German panel data

While life satisfaction has been identified as an important predictor of occupational success, the question of whether it might contribute to reemployment success among unemployed individuals has received much less research attention. Contrasting three theoretical perspectives (motivation theories, positive psychology, and the optimum level of well-being literature), we explored whether life satisfaction has a negative, a positive, or a non-monotonic effect on the likelihood of reemployment. We used large-scale panel data from Germany that gave us the possibility to monitor unemployed individuals’ life satisfaction and labor market outcomes for 10 years. Results of a multi-level discrete-time hazard analysis supported the optimum level of well-being perspective providing evidence for an inverted-U-shaped association between life satisfaction and reemployment probability. Moderate levels of life satisfaction were associated with a stronger likelihood of reemployment than lower or higher levels of life satisfaction. This effect remained robust against controlling for individuals’ socio-economic characteristics, labor market experience and the Big Five personality traits.

The effect of unemployment on social participation of spouses: evidence from plant closures in Germany

This paper estimates the effect of an individual’s unemployment on the level of social participation of their spouse. Using German panel data, it is shown that unemployment has a strong negative effect on public social activities of both directly and indirectly affected spouses. Private social activities of either spouse, however, are only found to increase if the indirectly affected spouse is not working. Conflict prevention strategies or habituation may help to rationalise this finding. Our results imply that active labour market policies should account for spillover effects within couples and adopt a family perspective.

The Effect of Unemployment on Social Participation of Spouses Evidence from Plant Closures in Germany

This paper estimates the effect of an individual’s unemployment on the level of social participation of their spouse. Using German panel data, it is shown that unemployment has a strong negative effect on public social activities of both directly and indirectly affected spouses. Private social activities of either spouse, however, are only found to increase, if the indirectly affected spouse is not working. Conflict prevention strategies or habituation may help to rationalise this finding. Our results imply that active labour market policies should account for spillovers effects within couples and adopt a family perspective.

Missing at work – Sickness-related absence and subsequent career events

Sickness-related absence can be viewed as indicator of an employee's health status or work effort. In both cases, absence may affect the employee's career. Evidence from German panel data reveals a significantly negative (positive) link between short-term sickness-related absence and the probability of a subsequent promotion (dismissal). Instrumental variable analyses suggest no causality in this context. We find no evidence of systematic gender differences in the link between absence and subsequent instances of mobility. Throughout our analysis, we give special attention to the role of health. According to our evidence, health appears to play no significant role for individual career advancement.

Your spouse is fired! How much do you care?

This study is the first to provide a causal estimate of the cross-spouse subjective well-being consequences of unemployment. Using German panel data on married and cohabiting partners for 1991–2015 and information on exogenous unemployment entry due to workplace closure, we show that one spouse’s unemployment experience reduces the life satisfaction of the other partner. The estimated spillover is at least one quarter of the effect of own unemployment and is equally pronounced among female and male partners. In addition, while wives’ life satisfaction does not recover even two years after their partners becoming unemployed, husbands only react to their wives’ joblessness during the first year of unemployment. Our results are insensitive to income controls and the couple’s position in the income distribution, thus reflecting the non-pecuniary costs of unemployment. Although the income loss hardly explains the negative spillover effects of unemployment on spousal life satisfaction, we document large declines in spousal satisfaction with household income and living standards. This finding supports the argument that the costs of unemployment borne by indirectly affected spouses extend beyond the loss of consumption opportunities and might be rather related to social values attached to market work. Being robust to a battery of sensitivity checks, our findings imply that public policy programs aimed at mitigating unemployment’s negative consequences need to target not only those directly affected but also cohabiting spouses.

Social mobility and subjective well-being revisited: The importance of individual locus of control

It has been postulated that movements both upward and downward the social ladder across generations attenuate individual subjective well-being (SWB) in terms of life satisfaction or happiness. Yet, results remain inconclusive concerning whether only upward, only downward, or both forms of social mobility actually harm SWB or not. We argue that whether social mobility is experienced as harmful depends on individuals’ psycho-social dispositions. As an applied example, we ask whether harmful effects of intergenerational social mobility on SWB may be different for individuals with an internal vs. external locus of control, i.e. whether individuals ascribe control of events to themselves or to outside forces. An internal locus of control has been observed to act as a buffer against stressful life events, to protect from role strain, and to better suit jobs with high demands for autonomy and flexibility. For this reason, it may attenuate potentially harmful social mobility effects as well. Using German panel data of a cohort of former Gymnasium students, we estimate a multilevel panel model of the interaction between intergenerational occupational mobility and locus of control on SWB controlled for other well-known predictors of SWB. Results suggest that respondents with a more internal locus of control are hardly affected by social mobility. In contrast, respondents with a more external locus of control obviously suffer from upward social mobility. We conclude that (i) an internal locus of control may buffer against harmful effects of upward social mobility on SWB, and (ii) considering differential effects by individual psycho-social dispositions can contribute to resolve inconsistencies in the analysis of social mobility effects.

Transitions in poverty and its deprivations

This paper explores a novel way to analyse poverty dynamics that is specific to certain measures of multidimensional poverty, such as the “adjusted headcount ratio” of the Alkire–Foster class of measures. Assuming there is panel data available, I show that a simultaneous and comprehensive account of transitions in deprivations and poverty allows complex interdependencies between dimensions in a dynamic context to be handled and, at the same time, allows for several advanced types of analyses. These analyses include (i) a decomposition of changes in multidimensional poverty, which reveals why poverty decreases or increases; (ii) a framework to examine and understand the relationship between the dashboard approach and dimensional contributions and multidimensional poverty in a dynamic setting; (iii) a presentation of methods that illuminate the process of the accumulation of deprivations. The suggested types of analyses are illustrated using German panel data. Implications for monitoring and policy evaluation are discussed.

Commuting and Sickness Absence

We investigate the causal effect of commuting on sickness absence from work using German panel data. To address reverse causation, we use changes in commuting distance for employees who stay with the same employer and who have the same residence during the period of observation. In contrast to previous papers, we do not observe that commuting distances are associated with higher sickness absence, in general. Only employees who commute long distances are absent about 20% more than employees with no commutes. We explore various explanations for the effect of long distance commutes to work and can find no evidence that it is due to working hours mismatch, lower work effort, reduced leisure time or differences in health status.

Long-term Health Consequences of Adverse Labor Market Conditions at Time of Leaving Education: Evidence from West German Panel Data.

Using longitudinal survey data from the Socio-Economic Panel Study ( N = 3,003 respondents with 22,165 individual-year observations) and exploiting temporal and regional variation in state-level unemployment rates in West Germany, we explore differences in trajectories of individuals' self-rated health over a period of up to 23 years after leaving education under different regional labor market conditions. We find evidence for immediate positive effects of contextual unemployment when leaving education on individuals' health. We find no evidence for generally accelerated or decelerated health deterioration when leaving education in high-unemployment contexts. We find, however, that individual unemployment experience when leaving education is associated with worse health and with more accelerated health deterioration in high-unemployment contexts. The cumulative experience of unemployment after leaving education does not mediate the influence of early labor market experiences for long-term health outcomes. In addition, our analyses indicate no gender differences in these results.

Entrepreneurial Success and Subjective Well-Being: Worries About the Business Explain One's Well-Being Loss from Self-Employment

Despite lower incomes the self-employed often report higher job satisfaction. But this increased job satisfaction only sometimes translates into higher life satisfaction, likely due to the heterogeneous nature of self-employment. By distinguishing different types of self-employment, this paper sheds light onto why some self-employeds even report lower life satisfaction, focussing specifically on poor performance enterprises, a prevalent but disregarded type of entrepreneurship. Using German panel data (1984-2015), I find that self-employment (compared to employment) typically negatively impacts on life satisfaction, especially so if one enters self-employment from unemployment, earns low incomes from self-employment or has no employees. Worries about one's financial situation and job security appear to be the driving forces behind this negative effect. Only very few self-employeds report higher life satisfaction, a boost that seems to relate to the pursuit of entrepreneurial opportunities. In sum, looking at the average self-employed obscures the heterogeneity of well-being impacts resulting from different types of self-employment one might find themselves in, and being on the lower end of the success distribution carries a well-being cost instead of bringing joy.

Company Closures and the Erosion of the Political Centre: Evidence from Germany

AbstractThis article investigates the link between company closures and political preferences using German panel data. I first show that job loss due to a company closure leads to similar adverse labor market outcomes as those found in other countries. I then show that men become less likely to identify with political parties and mainstream parties in particular, while women become less interested in politics. Effects are stronger for individuals who see job creation and protection as a state responsibility and for lower skilled workers, but do not vary with the routine intensity or offshorability of the former job.

Informal Learning and Labour Market Returns. Evidence from German Panel Data

Informal learning, the self-initiated acquisition of knowledge, takes a central position in political and scientific debates on skill formation. Human capital theory argues that informal learning increases skills and thereby will positively affect returns in the labour market. Signalling and closure theories do not expect returns to informal learning, as informal learning does not result in a formal degree. So far only a few studies have empirically investigated how informal learning affects labour market outcomes, all of them applying a cross-sectional design. By using the German National Educational Panel Study (NEPS), we model the returns to three forms of informal learning in person fixed-effects models, thereby reducing problems of selection into informal learning. We find that up to 33 per cent of the respondents engage in at least one form of professional purpose informal learning. While participation is high, the effects on labour market returns are negligible. We find a very small positive effect of one of the three types of informal learning on employment, and we find no effect of informal learning on wages.

The wear and tear on health: What is the role of occupation?

SummaryHealth is well known to show a clear gradient by occupation. Although it may appear evident that occupation can affect health, there are multiple possible sources of selection that can generate a strong association, other than simply a causal effect of occupation on health. We link job characteristics to German panel data spanning 29 years to characterize occupations by their physical and psychosocial burden. Employing a dynamic model to control for factors that simultaneously affect health and selection into occupation, we find that selection into occupation accounts for at least 60% of the association. The effects of occupational characteristics such as physical strain and low job control are negative and increase with age: late‐career exposure to 1 year of high physical strain and low job control is comparable to the average health decline from ageing 16 and 6 months, respectively.

Poverty and the Dynamics of Social Networks: An Analysis of German Panel Data

How do social relationships develop when people fall into poverty or suffer from poverty over a long period of time? While literature regarding poverty and social relationships exists, respective dynamics and causality questions remain unanswered. We use longitudinal German Socio-Economic Panel (GSOEP) data from 1992 to 2013 and analyse contact frequency, the size of social networks, as well as their composition (friends; family members; employed persons). Our results support central findings from cross-sectional studies with a longitudinal research design: contacts frequencies and the resource potential of a network decline; however, contacts to family members and the number of close friends remain unaffected. Additionally, we show that poverty negatively impacts social relationship patterns with a delay and in a non-linear fashion. Pure poverty consequences on social network patterns are rather small, but they are nevertheless existent, even when controlling for other life events (e.g. illness or unemployment) that are quite strongly related to social network issues.