Returns to Skills around the World: Evidence from PIAAC
Eric A. Hanushek, Guido Schwerdt, Simon Wiederhold, Ludger Woessmann
European Economic Review,
January
2015
Abstract
Existing estimates of the labor-market returns to human capital give a distorted picture of the role of skills across different economies. International comparisons of earnings analyses rely almost exclusively on school attainment measures of human capital, and evidence incorporating direct measures of cognitive skills is mostly restricted to early-career workers in the United States. Analysis of the new PIAAC survey of adult skills over the full lifecycle in 23 countries shows that the focus on early-career earnings leads to underestimating the lifetime returns to skills by about one quarter. On average, a one-standard-deviation increase in numeracy skills is associated with an 18 percent wage increase among prime-age workers. But this masks considerable heterogeneity across countries. Eight countries, including all Nordic countries, have returns between 12 and 15 percent, while six are above 21 percent with the largest return being 28 percent in the United States. Estimates are remarkably robust to different earnings and skill measures, additional controls, and various subgroups. Instrumental-variable models that use skill variation stemming from school attainment, parental education, or compulsory-schooling laws provide even higher estimates. Intriguingly, returns to skills are systematically lower in countries with higher union density, stricter employment protection, and larger public-sector shares.
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Spatial Development in View of the Re-structuring of Public Administrations – What are the Implications of the Individual Contributions?
Martin T. W. Rosenfeld, M. Gather
Gebiets- und Verwaltungsstrukturen im Umbruch: Beiträge zur Reformdiskussion aus Erfahrungen in Sachsen, Sachsen-Anhalt und Thüringen,
No. 360,
2015
Abstract
It must be clear that any kind of appraisal drawn from the results of the individual papers can only be an interim one. Many of the issues raised in the pertinent field of investigation could only be touched upon without being sufficiently debated. In other cases the results of the papers show that further and more thorough investigations are urgently required. It may be stated that public administration structures are basically in a state of constant change, and must repeatedly be adapted to changing economic and social framework conditions. In terms of legal boundaries to territorial restructuring, it should be noted that the size of a municipality may not be permitted to obstruct either the political participation of citizens or the possibility of the municipal decision-makers being sufficiently well-informed.
The overall picture furthermore suggests that reforms in the public sector sphere that are initiated by state actors (i.e. top down) are always extremely complicated affairs.
The objective of the regional working group of the Academy of Spatial Research and Planning (ARL) for the states Sachsen, Sachsen-Anhalt and Thüringen was to highlight some of the most significant aspects of the process of municipal re-structuring and its effects on spatial development, considering these in the three states against the background of current discussions and reform measures.
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Einführung: Strukturen der öffentlichen Verwaltung und Raumentwicklung – Allgemeine Zusammenhänge und Ansätze zu ihrer Erforschung im Überblick
Martin T. W. Rosenfeld
Gebiets- und Verwaltungsstrukturen im Umbruch: Beiträge zur Reformdiskussion aus Erfahrungen in Sachsen, Sachsen-Anhalt und Thüringen,
No. 360,
2015
Abstract
Far-reaching measures of administrative restructuring are being often introduced in the face of demographic change and the financial diffculties of the municipalities and federal states. Only with larger entities, it is argued, will it in future be possible to provide high quality municipal services at a reasonable cost. The tendency to enlarge municipal entities fits with the overall picture of municipal reforms in Germany, which since 1945 have been dominated by measures associated with concentration and centralisation efforts. Territorial restructuring is, however, but one element of the entire spectrum of administrative reforms. Further elements of administrative (re)structuring are the reform of the portfolio of public tasks (critical review of public tasks), the transfer of responsibilities between the levels (functional reform), and a change in the specifications of financing regulations relevant to services assigned to the public sector (financing reform). This publication consists of the results of the working group “Administrative and Territorial Reforms” (AG VGR) of the state working groups Sachsen, Sachsen-Anhalt and Thüringen of the Akademie für Raumforschung und Landesplanung (ARL). A significant objective of the AG VGR was to shed more light on the spatially-related interactions of the effects of administrative reform measures, as there are few findings on the topic that are empirically well-founded and many questions remain unanswered.
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A Control Group Study of Incubators’ Impact to Promote Firm Survival
Michael Schwartz
Journal of Technology Transfer,
No. 3,
2013
Abstract
It is widely unclear as to whether start-up firms supported by publicly-initiated incubator initiatives have higher survival rates than comparable start-up firms that have not received support by such initiatives. This paper contributes to the underlying discussion by performing a large-scale matched-pairs analysis of the long-term survival of 371 incubator firms (after their graduation) from five German incubators and a control group of 371 comparable non-incubated firms. The analysis covers a 10-year time span. To account for the problem of selection bias, a non-parametric matching approach is applied to identify an appropriate control group. For neither of the five incubator locations, we find statistically significant higher survival probabilities for firms located in incubators compared to firms located outside those incubator organizations. For three incubator locations the analysis reveals statistically significant lower chances of survival for those start-ups receiving support by an incubator. The empirical results, therefore, raise some doubts regarding the impacts of incubation on long-term firm survival.
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Bottom-up or Direct? Forecasting German GDP in a Data-rich Environment
Katja Drechsel, Rolf Scheufele
Abstract
This paper presents a method to conduct early estimates of GDP growth in Germany. We employ MIDAS regressions to circumvent the mixed frequency problem and use pooling techniques to summarize efficiently the information content of the various indicators. More specifically, we investigate whether it is better to disaggregate GDP (either via total value added of each sector or by the expenditure side) or whether a direct approach is more appropriate when it comes to forecasting GDP growth. Our approach combines a large set of monthly and quarterly coincident and leading indicators and takes into account the respective publication delay. In a simulated out-of-sample experiment we evaluate the different modelling strategies conditional on the given state of information and depending on the model averaging technique. The proposed approach is computationally simple and can be easily implemented as a nowcasting tool. Finally, this method also allows retracing the driving forces of the forecast and hence enables the interpretability of the forecast outcome.
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Gauging the Effects of Fiscal Stimulus Packages in the Euro Area
Mathias Trabandt, Roland Straub, Günter Coenen
Journal of Economic Dynamics and Control,
No. 2,
2013
Abstract
We seek to quantify the impact on euro area GDP of the European Economic Recovery Plan (EERP) enacted in response to the financial crisis of 2008–2009. To do so, we estimate an extended version of the ECB's New Area-Wide Model with a richly specified fiscal sector. The estimation results point to the existence of important complementarities between private and government consumption and, to a lesser extent, between private and public capital. We first examine the implied present-value multipliers for seven distinct fiscal instruments and show that the estimated complementarities result in fiscal multipliers larger than one for government consumption and investment. We highlight the importance of monetary accommodation for these findings. We then show that the EERP, if implemented as initially enacted, had a sizeable, although short-lived impact on euro area GDP. Since the EERP comprised both revenue and expenditure-based fiscal stimulus measures, the total multiplier is below unity.
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Vertical Grants and Local Public Efficiency
Ivo Bischoff, Peter Bönisch, Peter Haug, Annette Illy
Abstract
This paper analyses the impact of vertical grants on local public sector efficiency. First, we develop a theoretical model in which the bureaucrat sets the tax price while voters choose the quantity of public services. In this model, grants reduce efficiency if voters do not misinterpret the amount of vertical grants the local bureaucrats receive. If voters suffer from fiscal illusion, i.e. overestimate the amount of grants, our model yields an ambiguous effect of grants on efficiency. Second, we use the model to launch a note of caution concerning the inference that can be drawn from the existing cross-sectional studies in this field: Taking into account vertical financial equalization systems that reduce differences in fiscal capacity, empirical studies based on cross-sectional data may yield a positive relationship between grants and efficiency even when the underlying causal effect is negative. Third, we perform an empirical analysis for the German state of Saxony-Anhalt, which has implemented such a fiscal equalization system. We find a positive relationship between grants and efficiency. Our analysis shows that a careful reassessment of existing empirical evidence with regard to this issue seems necessary.
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Grant Dependence, Regulation and the Effects of Formula-based Grant Systems on German Local Governments: A Data Report for Saxony-Anhalt
Peter Haug
IWH Discussion Papers,
No. 2,
2013
Abstract
Recent empirical studies have found – seemingly − efficiency-enhancing effects of vertical grants on local public service provision. The main purpose of this paper is to prepare an elaborate theoretical and empirical analysis of these contradictory results. Therefore, it investigates if certain fiscal and institutional conditions (fiscal stress, fiscal rank-preserving vertical grant systems, input- and output regulation), that might help to explain these empirical findings, are characteristic of at least some parts of the local government sector or certain regions. The German state of Saxony-Anhalt is chosen for case study purposes. The main results are: First, the local governments suffer from severe fiscal problems such as high grant dependency, low tax revenues and the prevalent inability to finance investments by own resources. Second, the output- and input-regulation density of certain mandatory municipal services (schools, childcare facilities, fire protection) is high. Finally, the most important vertical grant category for local governments, the formula-based grants (“Schlüsselzuweisungen”), can be described as mainly exogenous, unconditional block grants that in most cases preserve the relative fiscal position of the grant recipients.
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Bottom-up or Direct? Forecasting German GDP in a Data-rich Environment
Katja Drechsel, Rolf Scheufele
Abstract
This paper presents a method to conduct early estimates of GDP growth in Germany. We employ MIDAS regressions to circumvent the mixed frequency problem and use pooling techniques to summarize efficiently the information content of the various indicators. More specifically, we investigate whether it is better to disaggregate GDP (either via total value added of each sector or by the expenditure side) or whether a direct approach is more appropriate when it comes to forecasting GDP growth. Our approach combines a large set of monthly and quarterly coincident and leading indicators and takes into account the respective publication delay.
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