Why Life Insurers are Key to Economic Dynamism in Germany
Reint E. Gropp, William McShane
IWH Online,
No. 6,
2020
Abstract
Young entrepreneurial firms are of critical importance for innovation. But to bring their new ideas to the market, these startups depend on investors who understand and are willing to accept the risk associated with a new firm. Perhaps the key reason as to why the US has succeeded in producing nearly all the most successful new firms of the 21st century is the economy’s ability to supply vast sums of capital to promising startups. The volume of venture capital (VC) invested in the US is more than 60 times that of Germany. In this policy note, we argue that differences in the regulatory and structural context of institutional investors, in particular life insurance companies, is a central driver of the relative lack of VC - and thereby successful startups - in Germany.
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03.12.2020 • 24/2020
IWH Bankruptcy Update: Fewer Large Companies Declare Bankruptcy
Following a spike in bankruptcy of large companies, statistics on impacted employees are declining again. The total number of bankruptcies also remains at a low level. Published by the Halle Institute for Economic Research (IWH), the IWH Bankruptcy Update provides monthly statistics on corporate bankruptcies in Germany.
Steffen Müller
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IWH-Flash-Indikator IV. Quartal 2020 und I. Quartal 2021
Katja Heinisch, Oliver Holtemöller, Axel Lindner, Birgit Schultz
IWH-Flash-Indikator,
No. 4,
2020
Abstract
Weil weitreichende Eindämmungsmaßnahmen gelockert wurden, war die deutsche Wirtschaft im Sommer 2020 auf Erholungskurs. Dazu hat auch die Wirtschaftspolitik entscheidend beigetragen. Nach dem pandemiebedingten Einbruch um 9,8% im zweiten Quartal stieg das Bruttoinlandsprodukt (BIP) im dritten Quartal um 8,2%. Im Vergleich zum vierten Quartal 2019 – dem letzten Quartal ohne Einfluss der Pandemie – beträgt der Rückgang noch 4%. Allerdings sind die Covid-19-Neuinfektionen im Herbst wieder stark gestiegen, und für den November wurden insbesondere für den privaten Bereich erneut erhebliche Einschränkungen erlassen. Für weite Teile der gewerblichen Wirtschaft gelten diese Einschränkungen aber nicht. Die Wirtschaftsleistung dürfte daher im vierten Quartal 2020 nicht so stark einbrechen wie in der ersten Jahreshälfte. Der IWH-Flash-Indikator für das Bruttoinlandsprodukt deutet auf einen Rückgang um 2,1% hin, gefolgt von einer Expansion um 5,0% im ersten Quartal 2021 (vgl. Abbildung 1)
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Growing Income Inequality in the United States and Other Advanced Economies
Florian Hoffmann, David S. Lee, Thomas Lemieux
Journal of Economic Perspectives,
No. 4,
2020
Abstract
This paper studies the contribution of both labor and non-labor income in the growth in income inequality in the United States and large European economies. The paper first shows that the capital to labor income ratio disproportionately increased among high-earnings individuals, further contributing to the growth in overall income inequality. That said, the magnitude of this effect is modest, and the predominant driver of the growth in income inequality in recent decades is the growth in labor earnings inequality. Far more important than the distinction between total income and labor income, is the way in which educational factors account for the growth in US labor and capital income inequality. Growing income gaps among different education groups as well as composition effects linked to a growing fraction of highly educated workers have been driving these effects, with a noticeable role of occupational and locational factors for women. Findings for large European economies indicate that inequality has been growing fast in Germany, Italy, and the United Kingdom, though not in France. Capital income and education don't play as much as a role in these countries as in the United States.
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Robot Adoption at German Plants
Liuchun Deng, Verena Plümpe, Jens Stegmaier
Abstract
Using a newly collected dataset of robot use at the plant level from 2014 to 2018, we provide the first microscopic portrait of robotisation in Germany and study the potential determinants of robot adoption. Our descriptive analysis uncovers five stylised facts concerning both extensive and, perhaps more importantly, intensive margin of plant-level robot use: (1) Robot use is relatively rare with only 1.55% German plants using robots in 2018. (2) The distribution of robots is highly skewed. (3) New robot adopters contribute substantially to the recent robotisation. (4) Robot users are exceptional along several dimensions of plant-level characteristics. (5) Heterogeneity in robot types matters. Our regression results further suggest plant size, low-skilled labour share, and exporter status to have strong and positive effect on future probability of robot adoption. Manufacturing plants impacted by the introduction of minimum wage in 2015 are also more likely to adopt robots. However, controlling for plant size, we find that plant-level productivity has no, if not negative, impact on robot adoption.
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14.10.2020 • 22/2020
Economic slump in East Germany not as severe as in Germany as a whole ‒ Implications of the Joint Economic Forecast and new data for East Germany
The German economy started recovering quickly after the drastic pandemic-related slump in spring 2020. The recovery, however, loses much of its momentum in the second half of the year. The Joint Economic Forecast predicts that production levels seen before the crisis will not be reached again until the second half of 2021. In principle, the East German economy is following this pattern, although the economic slump is likely to be somewhat milder.
Oliver Holtemöller
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06.10.2020 • 19/2020
IWH Bankruptcy Update: Bankruptcies Stabilise at a Low Level; Number of Affected Jobs Remains High
The number of companies declaring bankruptcy in Germany was very low in September, and no significant increase is expected in the coming months. By contrast, the number of jobs impacted by corporate bankruptcies remained elevated in September; monthly layoff figures have increased significantly since the beginning of the year. These are the key findings of the IWH Bankruptcy Update, a monthly monitor of insolvency statistics published by the Halle Institute for Economic Research (IWH).
Steffen Müller
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Firm Wage Premia, Industrial Relations, and Rent Sharing in Germany
Boris Hirsch, Steffen Müller
ILR Review,
No. 5,
2020
Abstract
The authors use three distinct methods to investigate the influence of industrial relations on firm wage premia in Germany. First, ordinary least squares (OLS) regressions for the firm effects from a two-way fixed-effects decomposition of workers’ wages reveal that average premia are larger in firms bound by collective agreements and in firms with a works council, holding constant firm performance. Next, recentered influence function (RIF) regressions show that premia are less dispersed among covered firms but more dispersed among firms with a works council. Finally, in an Oaxaca–Blinder decomposition, the authors find that decreasing bargaining coverage is the only factor they consider that contributes to the marked rise in premia dispersion over time.
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16.09.2020 • 18/2020
Economy recovers from the shutdown – but a quick return to pre-crisis normality is unlikely
The German economy has bounced back strongly over the summer, recovering a considerable part of the production slump caused by the shutdown in spring. Nevertheless, real gross domestic product in 2020 is likely to contract by 5.7%. In 2021, growth is expected to average 3.2% according to IWH autumn economic forecast. The decline in production in 2020 is likely to be less pronounced in East Germany com¬pared to Germany as a whole.
Oliver Holtemöller
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Konjunktur aktuell: Wirtschaft erholt sich vom Corona-Schock – aber keine schnelle Rückkehr zur
alten Normalität
Konjunktur aktuell,
No. 3,
2020
Abstract
Die Corona-Pandemie hat die Weltwirtschaft im ersten Halbjahr 2020 drastisch einbrechen lassen. Im Sommer wurden viele Aktivitäten aber wiederaufgenommen, und ein großer Teil des Einbruchs dürfte im zweiten Halbjahr wieder wettgemacht werden. Einige wirtschaftliche Aktivitäten wie der Tourismus oder Verkehrsdienstleistungen werden allerdings noch eine Weile eingeschränkt bleiben.
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