Project summary
The goal of this project is to get a better understanding of the reasons for persistent heterogeneity in labor market outcomes, and in economic well-being. The project focuses on the role of behavioral aspects, such as heterogeneity in preferences and beliefs, as well as lifetime experiences that might have shaped this heterogeneity. Having documented cultural heterogeneity in terms of systematic differences in preferences, personality traits, and beliefs, we investigate the determinants and consequences of cultural heterogeneity, especially in the context of the persistent differences across East and West Germany. A particular focus is on the dynamics of cultural heterogeneity and related outcomes, particularly the dynamics of inequality and polarization, and on the co-evolution of cultural factors reflected in preference and belief heterogeneity with economic outcomes, especially on the labor market.
The research questions include:
- Do preferences and attitudes converge across regions?
- Are they malleable over the life cycle, and does aggregate uncertainty shape certain traits?
- Does this affect wage heterogeneity, social inequality, and political attitudes?
- How do individuals adapt, and what is the scope for policy?