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The debate about growing inequality has gained momentum in recent years, not least due to the economist Thomas Piketty. Disparities in income and wealth are usually viewed critically, but they certainly serve important functions in a market economy. Problems arise when opportunities are unequally distributed. This is not only unjust, but also leads to potentials in society not being fully tapped. Therefore, the state intervenes in various ways to reduce inequality.
However, the exact extent of inequality and redistribution is not easy to measure. Sometimes money simply moves from one pocket to another, and most distribution analyses only consider some of the state’s interventions. It is equally difficult to clearly determine the side effects of taxes and transfers. Our team in ZEW’s Research Group “Inequality and Public Policy” tackles these questions. Their studies provide a solid basis for policy decisions. This new ZEW Monthly issue focusing on “Inequality and Public Policy” provides current insights into the group’s work.
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| | | | RESEARCH ON INEQUALITY AND PUBLIC POLICY | |
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↗ ALLOCATION OF GOVERNMENT EXPENDITURE INFLUENCES MEASURE OF INEQUALITY
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| How evenly do countries distribute their expenditure among their citizens? To explore this question, it is necessary to look not only at direct government spending such as social transfers or child benefits, but also at in-kind benefits such as public spending on education, infrastructure and defence. ZEW Mannheim shows that the extent of inequality of post-tax income depends strongly on the distribution of these expenditures and that the famous study by Piketty and his co-authors overstates the level of inequality.
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| More about the ZEW study
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↗ NEW WEBSITE PRESENTS ZEW EVALUATION MODEL
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| For many years, ZEW Mannheim has been advising public institutions on distributional effects and the design of taxes and transfers using the Evaluation Model for Integrated Tax and Transfer Policy Analyses (ZEW-EviSTA). Recently, a new website dedicated to ZEW-EviSTA has been launched, which provides an introduction to the model, presents current research results and provides facts and figures on the German tax and transfer system.
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| More about ZEW-EviSTA
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↗ ZEW ECONOMIST STICHNOTH APPOINTED TO FAMILY REPORT EXPERT COMMISSION
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| Professor Holger Stichnoth, head of ZEW’s “Inequality and Public Policy” Research Group, has been appointed by Federal Minister Lisa Paus as a member of the Expert Commission for the Tenth Family Report of the Federal Government at the beginning of the year. The Family Report regularly examines the situation of families in Germany and serves as a basis for well-founded political measures. Together with the other experts, Holger Stichnoth will work on the Tenth Family Report over the next two years, which will focus in particular on the situation of single parents and separated parents.
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| Read more
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| | ↗ EXPLAINING DOUBLE-DIGIT WAGE CLAIMS
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| Wage bargaining in Germany this year has been conducted with greater intensity than usual. Trade unions demand double-digit wage increases this year – an order of magnitude unthinkable in the recent past. PD Dr. Friedhelm Pfeiffer, deputy head of the “Labour Markets and Social Insurance” Unit at ZEW, deliberates the economic reasoning underpinning these demands as well as their likelihood of success on the basis of recent ZEW survey data, inflation expectations, and information from Germany’s Federal Statistical Office.
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| | | | CURRENT ZEW RESEARCH | |
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↗ REAL ESTATE AN INCREASINGLY LESS ATTRACTIVE ASSET CLASS
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| According to the March 2023 ZEW Financial Market Survey, the attractiveness of real estate investments has once again significantly deteriorated. This asset class was already viewed as very unfavourable in the September 2022 Financial Market Survey. According to financial experts, the attractiveness of real estate investments has diminished recently due to a number of factors. Firstly, the already sharp rise in interest rates and the prospect of further interest rate hikes make investing in real estate less appealing. Secondly, according to the surveyed market experts, real estate prices are currently too high, as they have not yet adapted to the changing market environment. Moreover, current political conditions are putting a strain on real estate investments in the eurozone.
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| More about the special question
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↗ PUBLIC R&D FUNDING: TIMING OF SUPPORT IS CRITICAL
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| R&D grants, R&D tax credits, and the support to co-operation with research institutes are three important instruments governments use to stimulate R&D spending in private corporations. While various studies have proven the effectiveness of each of these measures in general, the cumulative effects of their sequence and timing have not been examined in sufficient detail yet. ZEW Mannheim has, in close cooperation with a research team from the University of Limerick and supported by Science Foundation Ireland, made a first pass at exploring these potential timing effects, using extensive panel data for firms from Ireland.
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↗ FIVE STARS FOR A HALLELUJAH
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| Whether you book a hotel, look for a doctor or buy a product – you will come across customer reviews for almost everything on the internet. These are usually written by users who rate certain products or services with school grades or stars to help other users assess their quality. A study by ZEW Mannheim in cooperation with the University of Mannheim’s Department of Law discusses the advantages and disadvantages of rating systems and whether new regulations will help to better protect consumers.
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Tensions were high when Robert Habeck announced his ban for household gas and oil heaters. After a gruelling days-long negotiation, the reform was pushed through in a watered-down form. This case is emblematic of a larger, systemic problem facing the government: when CO2 prices are set too low and subsidies remain uneconomical, climate goals can only be achieved through sweeping bans. Such measures are not only unpopular, but also inefficient.
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| Read the full opinion piece
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| | | IMMIGRATION AS AN OPPORTUNITY TO RELIEVE EU LABOUR MARKETS
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| In addition to the effects of the Russian invasion of Ukraine, the increasing labour shortage and the issue of migration pose major challenges for the European Union. At the ZEW Lunch Debate on 18 April 2023, experts from the European Commission, trade unions, businesses, and academia discussed with around 140 participants how migration is affecting European labour markets and what opportunities and risks it brings. In an introductory keynote speech, ZEW economist Dr. Katrin Sommerfeld pointed out the increasing labour shortage and argued for promoting more immigration, also from third countries, into the EU labour markets.
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| Read the full event report
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| | | FOCUS ON ANTITRUST AND DIGITAL PLATFORMS
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| The Mannheim Centre for Competition and Innovation (MaCCI) hosted its twelfth annual conference on 23–24 March 2023 at ZEW Mannheim. This year’s conference programme consisted of approximately 80 presentations in parallel sessions, a panel discussion, and two keynote speeches by Professor Niamh Dunne from the London School of Economics (LSE) and Professor Massimo Motta from ICREA – Universitat Pompeu Fabra, and the Barcelona School of Economics. With over 120 participants, this was the largest in-person MaCCI Annual Conference to date.
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| Read the full event report
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| | | | UPCOMING | |
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| | | ELEVENTH MANNHEIM CONFERENCE ON ENERGY AND THE ENVIRONMENT
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| ZEW Mannheim is pleased to announce the eleventh Mannheim Conference on Energy and the Environment on 8 and 9 May 2023. Leading experts as well as researchers at all career levels are invited to present and discuss innovative current research in the fields of environmental, energy, and climate economics. The conference will cover a broad range of aspects concerning the relationship between energy use and supply, environment, economic well-being, and regulation and policy. Contributions with different methodological backgrounds (theoretical, empirical, and behavioural research) are welcome.
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| More about the event
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| | | | → CONTACT FOR QUESTIONS OR SUGGESTIONS ON THE CONTENT | |
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| | | ZEW – Leibniz Centre for European Economic Research
L7, 1 · 68161 Mannheim
Phone: +49 (0)0621/1235-01
E-mail: zewmonthly@zew.de
Website: www.zew.de
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| | | Executive Directors:
Professor Achim Wambach, PhD; Thomas Kohl
Chair of the ZEW Supervisory Board:
Ministerial Director Dr. Hans Reiter
Registered Office: Mannheim
Local Court Mannheim HRB 6554
USt-IdNr.: DE188318292
Commitment to Data Protection
Detailed Legal Note
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