Discussion Paper No. 214
November 9, 2021
Personality Traits Across the Life Cycle: Disentangling Age, Period, and Cohort Effects
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Despite the importance for socio-economic outcomes, there is an ongoing debate about the stability of personality traits over the life cycle. By disentangling age, period and cohort influences on personality traits, this paper adds to the existing empirical contributions, which often focus on age patterns and disregard cohort and period influences. We present the results from systematic specification tests that provide novel evidence for the separability of age, period, and cohort effects in almost all personality traits. Our estimates also document that for different cohorts, the evolution of personality traits across the life-cycle follows a stable, though non-constant, age-profile, while there are sizeable differences across time periods.
Keywords:
big five personality traits; locus of control; risk attitudes; age-period-cohort decomposition; life cycle;
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Discussion Paper No. 201
Longevity and Patience
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Why does patience vary across individuals and countries? We provide evidence on a widely-hypothesized mechanism, namely that higher longevity fosters patience. Using data on patience for 80,000 individuals in 76 countries, this paper relates exogenous variation in longevity across gender-age-country cells to variation in patience. We find that a ten-year increase in life expectancy implies a 5-percentage point higher discount factor. This relationship emerges for various sub-samples and is unaffected by other determinants including lifetime experiences regarding economic development, institutional quality, or violence. We provide a model to discuss the implications for the emergence of poverty traps.
Keywords:
time preferences; mortality; poverty traps;
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Discussion Paper No. 156
November 8, 2021
Explaining Gaps in Educational Transitions Between Migrant and Native School Leavers
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This paper analyzes the reasons for the large and persistent gaps in transitions after secondary school between native pupils compared to second- and third generation immigrant pupils in Germany. I first document that differences in parental background, skills (such as school degrees or test scores), and school fixed effects explain part of the migrant-native gaps, but are not sufficient. Conditional on these factors, there is a "polarization" of educational choices: migrants are more likely to attend tertiary education, less likely to attend vocational education, and more likely to end without qualified training than their background and skills would predict. I then show that this polarization is driven by the migrant pupils' more academically oriented career aspirations and expectations before leaving school. On the one hand, these higher ambitions allow higher skilled migrants to hieventertiary education despite their less favourable background characteristics. On the other hand, less skilled migrants who in Germany's tracked school system do not have the option to enter academic education, may be diverted from vocational training as a more viable alternative. These patterns are stronger for boys than for girls. Finally, I discuss various possible explanations for the migrants' different career plans, including expected labour market returns to education, expected discrimination, the intention to leave Germany, overconfidence, or information deficits.
Keywords:
migrant youth; vocational education; tertiary education; aspirations; expectations;
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Discussion Paper No. 138
Individual Life Horizon Influences Attitudes Toward Democracy
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Support for democracy in the population is considered critical for the emergence and stability of democracy. Macro-determinants and retrospective experiences have been shown to affect the support for democracy at the individual level. We investigate whether and how the individual life horizon, in terms of the prospective length of life and age, affect individual attitudes toward democracy. Combining information from period life tables with individual survey response data spanning more than 260,000 observations from 93 countries over the period 1994-2014, we find evidence that the expected remaining years of life influence the attitudes toward a democratic political regime. The statistical identification decomposes the influence of age from the influence of the expected proximity to death. The evidence shows that support for democracy increases with age, but declines with expected proximity to death, implying that increasing longevity might help fostering the support for democracy. Increasing age while keeping the remaining years of life fixed as well as increasing remaining years of life for a given age group both contribute to the support for democracy.
Keywords:
attitudes toward democracy; life expectancy; aging;
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Discussion Paper No. 126
A Proposed Data Set for Analyzing the Labor Market Trajectories of East Germans Around Reunification
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Data from German social security notifications and internal procedures of the Federal Employment Agency are an important source for analyzing labor market trajectories. However, for East Germans these data are only fully available from 1992 onwards. As a consequence of German reunification, by 1992 significant fractions of East Germans had already lost their jobs, had changed their occupations and industries, and had moved to West Germany. We partially close the gap in the data by linking the "Integrated Employment Biographies" - that start in 1992 for East Germany - with the GDR's "Data Fund of Societal Work Power" from 1989. The new data set permits the analysis of phenomena such as unemployment, job mobility, and regional mobility. It can also be used to refine the existing knowledge of the individual-level labor market consequences of German reunification. Our long-term goal is to make the new data set available to the research community via the Research Data Center of the Federal Employment Agency.
Keywords:
east germany; german reunification; labor market trajectories; administrative data; record linkage;
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Discussion Paper No. 121
Can Education Compensate the Effect of Population Aging on Macroeconomic Performance?
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This paper investigates the consequences of population aging and of changes in the education composition of the population for macroeconomic performance. Estimation results from a theoretically founded empirical framework show that aging as well as the education composition of the population influence economic performance. The estimates and simulations based on population projections and different counterfactual scenarios show that population aging will have a substantial negative consequence for macroeconomic performance in many countries in the years to come. The results also suggest that education expansions tend to offset the negative effects, but that the extent to which they compensate the aging effects differs vastly across countries. The simulations illustrate the heterogeneity in the effects of population aging on economic performance across countries, depending on their current age and education composition. The estimates provide a method to quantify the increase in education that is required to offset the negative consequences of population aging. Counterfactual changes in labor force participation and productivity required to neutralize aging are found to be substantial.
Keywords:
demographic change; demographic structure; distribution of skills; projections; education-aging-elasticity;
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Discussion Paper No. 79
November 4, 2021
Global Evidence on Economic Preferences
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This paper studies the global variation in economic preferences. For this purpose, we present the Global Preference Survey (GPS), an experimentally validated survey dataset of time preference, risk preference, positive and negative reciprocity, altruism, and trust from 80,000 individuals in 76 countries. The data reveal substantial heterogeneity in preferences across countries, but even larger within-country heterogeneity. Across individuals, preferences vary with age, gender, and cognitive ability, yet these relationships appear partly country specific. At the country level, the data reveal correlations between preferences and bio-geographic and cultural variables such as agricultural suitability, language structure, and religion. Variation in preferences is also correlated with economic outcomes and behaviors. Within countries and subnational regions, preferences are linked to individual savings decisions, labor market choices, and prosocial behaviors. Across countries, preferences vary with aggregate outcomes ranging from per capita income, to entrepreneurial activities, to the frequency of armed conflicts.
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Discussion Paper No. 76
On the Relationship Between Cognitive Ability and Risk Preference
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This paper focuses on the relationship between cognitive ability and decision making under risk and uncertainty. We begin by clarifying some important distinctions between concepts and measurement of risk preference and cognitive ability and then take stock of what is known empirically on the connections between cognitive ability and measured risk preferences.
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Discussion Paper No. 69
The Impact of a Negative Labor Demand Shock on Fertility - Evidence From the Fall of the Berlin Wall
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How does a negative labor demand shock impact fertility? I analyze this question in the context of the East German fertility decline after the fall of the Berlin Wall in 1989. I exploit differential pressure for restructuring across East German industries which led to unexpected, exogenous, and permanent changes to labor demand. I find that throughout the 1990s, women more severely impacted by the demand shock had relatively more children than their less-severely-impacted counterparts. Thus, the demand shock did not only depress the aggregate fertility level but also changed the composition of mothers. My paper shows that these two effects do not necessarily operate in the same direction.
Keywords:
J13; J23; P36;
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Discussion Paper No. 43
November 3, 2021
Additional Career Assistance and Educational Outcomes for Students in Lower Track Secondary Schools
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Based on local policy variation, this paper estimates the causal effect of additional career assistance on educational outcomes for students in Lower Track Secondary Schools in Germany. We find mostly insignificant effects of the treatment on average outcomes, which mask quite heterogeneous effects. For those students, who are taking extra coursework to continue education, the grade point average is unaffected and the likelihood of completing a Middle Track Secondary School degree falls. In contrast, educational outcomes improve for students who do not take extra coursework. Hence, the treatment causes a reversal of educational plans after graduation.
Keywords:
lower track secondary schools; career guidance; educational upgrading;
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