Equal opportunities for everyone
In a nutshell
For educational success, it is not a child's ability that is important, but their background. In Germany, what qualifications a child achieves, whether they have a successful career and how much they will earn still primarily depends on their social background. There is a need for artificial barriers to be removed in the German school system to ensure that every child has the same opportunities. After all, education is crucial in many respects.
Our expert for this issue
Tapping unused potential
Better education leads to increased social mobility – and therefore to vital economic resources. Where it is lacking, entire generations and economic areas falter. Catch-up states must centrally invest in their human assets to avoid falling into the "middle income trap", as demonstrated by our Eastern Germany Department. Federal States such as Saxony-Anhalt must increasingly focus on education, in order to remain future-proof.
Individuals also need a basis that enables them to advance and/or prevent them from falling behind – and to counteract the phenomenon of unemployment, since unemployment is hereditary, as Steffen Müller discovered. He made some interesting findings in this regard: Whilst the sons of unemployed fathers are more likely to be unemployed themselves, this rule does not apply to the sons of migrants. In this case, there appears to be increased social mobility between the generations. Children of well-educated fathers are also less likely to be unemployed and for a shorter period of time. There is also a difference between sons and daughters: Girls whose fathers are unemployed are even motivated to invest in their education.
When it comes to education, financial education, in particular, is extremely important. It is not just about sustainable investments or saving for retirement. The implications are also visible in areas of the labour market: Those with a better understanding of finance are more likely to be self-employed. Innovative entrepreneurship is important for a country's economic power; conversely a feeling of inferiority also has negative consequences: the likelihood of someone becoming xenophobic also depends on the way they perceive their own financial situation.
IWH Publications about this issue
Firm Wage Premia, Industrial Relations, and Rent Sharing in Germany
in: IWH Discussion Papers, No. 2, 2018
This paper investigates the influence of industrial relations on firm wage premia in Germany. OLS regressions for the firm effects from a two-way fixed effects decomposition of workers’ wages by Card, Heining, and Kline (2013) document that average premia are larger in firms bound by collective agreements and in firms with a works council, holding constant firm performance. RIF regressions show that premia are less dispersed among covered firms but more dispersed among firms with a works council. Hence, deunionisation is the only among the suspects investigated that contributes to explaining the marked rise in the premia dispersion over time.
Niedrige Soziale Mobilität in Deutschland: Wo liegen die Ursachen?
in: Wirtschaft im Wandel, No. 4, 2017
Weiterhin gilt in Deutschland: Für den Bildungserfolg ist es nicht entscheidend, was ein Kind kann, sondern woher es kommt. Die soziale Herkunft eines Kindes bestimmt in hohem Maße dessen Bildungsniveau, beruflichen Erfolg und Einkommen. Eine Untersuchung des Statistischen Bundesamts vom letzten Jahr zeigt, dass 61% der unter 15-Jährigen, deren Eltern selbst einen hohen Bildungsabschluss haben, 2015 ein Gymnasium besuchten, während dies nur für 14% der Jugendlichen aus Familien mit niedrigem Bildungsabschluss gilt. Empirische Studien belegen: Kinder mit einem bildungsfernen Familienhintergrund können in Deutschland nur mit einer deutlich niedrigeren Wahrscheinlichkeit als etwa in skandinavischen Ländern (Dänemark, Norwegen, Finnland und Schweden) und einer ähnlich hohen Wahrscheinlichkeit wie in den USA sozial aufsteigen.
TV and Entrepreneurship
in: IWH Discussion Papers, No. 17, 2017
We empirically analyse whether television (TV) can influence entrepreneurial identity and incidence. To identify causal effects, we utilise a quasi-natural experiment setting. During the division of Germany after WWII into West Germany with a free-market economy and the socialistic East Germany with centrally-planned economy, some East German regions had access to West German public TV that – differently from the East German TV – transmitted images, values, attitudes and view of life compatible with the free-market economy principles and supportive of entrepreneurship. We show that during the 40 years of socialistic regime in East Germany entrepreneurship was highly regulated and virtually impossible and that the prevalent formal and informal institutions broke the traditional ties linking entrepreneurship to the characteristics of individuals so that there were hardly any differences in the levels and development of entrepreneurship between East German regions with and without West German TV signal. Using both, regional and individual level data, we show then that, for the period after the Unification in 1990 which made starting an own business in East Germany, possible again, entrepreneurship incidence is higher among the residents of East German regions that had access to West German public TV, indicating that TV can, while transmitting specific images, values, attitudes and view of life, directly impact on the entrepreneurial mindset of individuals. Moreover, we find that young individuals born after 1980 in East German households that had access to West German TV are also more entrepreneurial. These findings point to second-order effects due to inter-personal and inter-generational transmission, a mechanism that can cause persistent differences in the entrepreneurship incidence across (geographically defined) population groups.