Newsletter July 2022

From digitalisation in schools to shortage of skilled professionals: On 14 July 2022, seven school teams competed with their ideas and concepts at the South-West regional final at ZEW Mannheim to reach the final round of the YES! – Young Economic Summit school competition in Hamburg in September.

What impact will the Digital Markets Act (DMA) recently passed by the EU Parliament have? Where is the economics of privacy going? These and many other questions were discussed by about 80 digital economists at the “Economics of Information and Communication Technologies” Conference at ZEW Mannheim on 7 and 8 July 2022. The conference, organised by ZEW’s “Digital Economy” Department, has been one of the most important scientific conferences in the field of digital economics for years.

Ten prospective high school graduates of the BBS Wirtschaftsgymnasium in Ludwigshafen visited ZEW Mannheim with their teacher Ute Pentke on 14 July 2022. In addition to an overview of the organisation and goals of an economic research institute, the students also gained specific insights into the day-to-day work at ZEW.

This year, the ZEW Research Department “Environmental and Climate Economics” again presented its latest findings in the field of environmental economics at the annual conference of the European Association of Environmental and Resource Economists (EAERE). In addition, there were also two ZEW presentations from the Research Department “Digital Economy” and the Research Group “Health Care Markets and Health Policy”. A total of nine ZEW researchers presented their results from 28 June to 1 July 2022 in Rimini, Italy.

The pandemic has struck sub-Saharan Africa with particular intensity. In 2020 – the first year of the pandemic – GDP per capita in the region fell an unprecedented 4.5 per cent. But while agriculture, industry and trade are slowly recovering, lost teaching days will exert an acute impact over the long term. A new ZEW study quantifies COVID-19’s impact on education in eight sub-Saharan countries.

Federal Health Minister Karl Lauterbach has proposed to reform the financing of the statutory health insurance system in order to close the financing gap without excessively raising health insurance contributions. In the latest episode of the #ZEWPodcast format “Put into Context”, ZEW Health Economist Dr. Simon Reif explains the reform package and evaluates the individual measures.

What contribution must municipalities, the federal government and the EU make in order to achieve the climate targets? Which instruments are effective and which are counterproductive? And what can each and every one of us do to make a difference? These are some of the questions ZEW President Professor Achim Wambach addresses in his latest book “Klima muss sich lohnen” (“Climate Protection Must Be Worthwhile”). At the #ZEWBookTalk on 4 July 2022, the economist gave a preview of his book and presented its core theses. In his presentation, Wambach provided the around 55 participants with an overview of the various dimensions of climate policy.

Furthermore, he pleaded for more economic rationality in the choice of appropriate instruments, as markets and mechanisms operating in the background determine the effectiveness of individual climate policy measures. The way they operate, however, is less obvious than often assumed.

“In Germany, we have set ourselves the goal to become carbon-neutral by 2045. Every heating system installed from now on would have to run on renewables, otherwise we will not achieve this goal,” says ZEW environmental economist Kathrine von Graevenitz in the latest episode of the ZEWPodcast. The German government’s new energy price relief package requires that every newly installed heating system must be 65 per cent powered by renewable energies from 2024. Can such minimum requirements truly advance the heating transition?

Economic experts are forecasting a further increase in the inflation rate for the eurozone. There are also indicators of a positive development in the labour market and a gradual increase in the forecasts for short- and long-term interest rates. This is the result of the business cycle tableaus by ZEW Mannheim and the German daily newspaper, Börsen-Zeitung.

The 14^th ReCapNet conference of the ReCapNet network will be hosted by ZEW Mannheim and organised by Steffen Sebastian (ZEW and IREBS, University of Regensburg) and Bertram Steininger (KTH Institute of Technology). The conference is planned to be held in person. Should this not be possible due to COVID-19-related restrictions, the conference will take place entirely or partly online.
 
The conference focuses on a broad range of topics related to real estate markets and their connected capital markets. We invite papers on this topic and on all areas of real estate finance and real estate economics.
 
Please submit full papers without author-identifying information via the Oxford Abstracts system no later than 15 August 2022. Submissions must include:
 
• Contact details of all authors
• An anonymised PDF version of your paper, without any information that could identify you personally (e.g. file metadata, acknowledgements and references to institutions).

The deputy head of the Research Department “Labour Markets and Social Insurance” at ZEW Mannheim, Professor Melanie Arntz, has been appointed as a member of the “Rat der Arbeitswelt” (“Council of the World of Work”). The independent and interdisciplinary expert commission has the task of preparing an annual report on the world of work, which is handed over to the Federal Ministry of Labour and Social Affairs (BMAS).

Professor Irene Bertschek, head of the Research Department “Digital Economy” at ZEW Mannheim, has been appointed as a member of the newly established Future Council on behalf of German Chancellor Olaf Scholz. The Future Council is replacing the previous Innovation Dialogue between the Federal Government, industry and science. It aims to monitor developments, insights and trends in the field of innovation and to develop proposals to strengthen Germany’s resilience and technological sovereignty in key technologies and digitalisation. The council consists of high-ranking representatives from science and business.

At the most recent meeting of the Supervisory Board of ZEW Mannheim, Chairman Dr. Hans Reiter (ministerial director of the Ministry of Science, Research and the Arts of Baden-Württemberg) personally welcomed Albrecht Schütte as a new member for the first time. Schütte, who is a member of the State Parliament of Baden-Württemberg, succeeds former Minister Gerhard Stratthaus, who had been a member of the ZEW Supervisory Board since 2002.

Since the start of the Russian-Ukrainian war, EU countries have recognised the urgency of reducing their energy dependence on Russia while protecting European households and businesses from rising energy costs. Joint procurement of natural gas would address this dual problem. EU-wide procurement would be an efficient means of preventing energy price spikes, as a recent ZEW policy brief shows.

The spatial distribution of economic activity in West Germany has changed significantly over the last 100 years: In the past, the country’s northern regions used to possess economic power, high wages and traditional industries. Over time they have experienced severe deindustrialisation and have fallen behind in the ranking of regional gross domestic product. Examples of this trend include the Ruhr area but also Bremen and other coastal regions.

However, many regions in the south of Germany, especially in Bavaria, have managed to make the transition from relatively backward, agricultural regions into new, innovative industrial hubs. A recent study by ZEW Mannheim in cooperation with the University of Bayreuth attributes this transition to regional differences in the early industrialisation in the 19th century. These differences explain almost half of the North-South divide in per capita income between regions in Germany today.

The German economy will grow only moderately by 1.5 per cent in 2022, according to the assessment of the financial market experts surveyed by ZEW Mannheim in July 2022. Compared to April 2022, the respondents have revised their forecast for 2023 downwards from 2.5 to 1.5 per cent. The experts do not expect the economy to accelerate before 2024, when growth is expected to reach 2.0 per cent.

The ZEW Indicator of Economic Sentiment for Germany slumped by 25.8 points to a value of minus 53.8 points in the current July 2022 survey. The assessment of the economic situation in Germany has also decreased sharply and currently stands at minus 45.8 points, 18.2 points lower than in the previous month. Both the assessment of the economic situation and the expectations are thus even slightly below the values recorded in March 2020 at the beginning of the COVID-19 crisis.

With increasing digitalisation in Germany, the importance of one’s social background for professional success has diminished. In the 1990s the increasing computerisation of the work environment made it easier for employees whose parents did not have a German high school diploma (“Abitur”) to access jobs that were subject to major technological change. Moreover, their wages in these occupations converged with those of workers whose parents had a high school diploma, as a recent study by ZEW Mannheim shows.

The European Central Bank (ECB) published the results of its climate risk stress test, which it conducted for the first time for 104 banks in the euro area. Dr. Karolin Kirschenmann, deputy head of the Research Department “Pensions and Sustainable Financial Markets” at ZEW Mannheim, has commented on this matter.

ZEW Mannheim presented the Heinz König Young Scholar Award for the 22^nd time. This year, the research award went to Elisa Gerten from the University of Basel for her study “Information and Communication Technology. Hierarchy, and Job Design”, which was co-authored with Michael Beckmann, also from the University of Basel, and Matthias Kräkel from the University of Bonn. The award-winning work examines how the use of information and communication technologies (ICT) has changed the design of workplaces.

At its general assembly, the ZEW – Sponsors’ Association for Science and Practice elected Dr. Ralph Rheinboldt, board member at Fuchs Petrolub SE, as its chair. In addition, the extended board, including four newly appointed members, was confirmed.

Our publications are available to download in PDF format. PDF files can be viewed using, among others, Acrobat Reader, which you can download for free at https://acrobat. adobe. com/us/en/acrobat/pdf-reader. html

Leonardo Maria Giuffrida and Giancarlo Spagnolo
The Centralization of Natural Gas Procurement in the EU: An Economic Perspective

Matilde Cappelletti and Leonardo Maria Giuffrida
Targeted Bidders in Government Tender

Francesco Berlingieri, Christina Gathmann, and Matthias Quinckhardt
College Openings and Local Economic Development

Marius Alt
Better Us Later Than Me Now – Regulatee-Size and Time-Inconsistency as Determinants of Demand for Environmental Policies

Raphael Abiry, Marien Ferdinandusse, Alexander Ludwig, and Carolin Nerlich
Climate Change Mitigation: How Effective Is Green Quantitative Easing?

Florian Buhlmann, Michael Hebsaker, Tobias Kreuz, Jakob Schmidhaeuser, Sebastian Siegloch, and Holger Stichnoth
ZEW-EviSTA: A Microsimulation Model of the German Tax and Transfer System

Paul Berbée, Sebastian Till Braun, and Richard Franke
Reversing Fortunes of German Regions, 1926–2019: Boon and Bane of Early Industrialization?

Angelika Ganserer, Terry Gregory, and Ulrich Zierahn
Minimum Wages and the Rise in Solo Self-Employment

Enno Mammen, Ralf A. Wilke, and Kristina Zapp
Estimation of Group Structures in Panel Models with Individual Fixed Effects

Guido Neidhöfer, Nora Lustig, and Patricio Larroulet
Nowcasting the Impact of COVID-19 on Education, Intergenerational Mobility and Earnings Inequality in Sub-Saharan Africa

Tom Krebs
Economic Consequences of a Sudden Stop of Energy Imports: The Case of Natural Gas in Germany

Christian Rammer
Kompetenzen und Kooperationen zu Künstlicher Intelligenz (Competences and Cooperation on Artificial Intelligence)

Scientific Analyses of Bavarian Family Policies

Update 2022 of the Country Index for Family Enterprises

Work Disability and Labour Supply

Due to the ongoing COVID-19 pandemic, the following event details may be subject to change. The current status of the events can be found in the ZEW Events Calendar. If you have any questions, please don’t hesitate to contact our event team at event@zew.de.

Speaker: Paula Gobbi (ECARES - Solvay Brussels School of Economics and Management, Belgium)
Location of the event: ZEW Mannheim

Speakers: Rita de la Feria (University of Leeds, United Kingdom) and Nadine Riedel (University of Münster, Institute for Public and Regional Economics)
Location of the event: ZEW Mannheim

Speakers: Giovanni Peri (University of California (UC Davis), USA) and Maureen Eger (Umeå University, Sweden)
Location of the event: ZEW Mannheim

Speaker: Madeline Werthschulte (ZEW)
Location of the event: Online

Speaker: Raul Santaeulalia-Llopis (Universitat Autonoma de Barcelona, Spain)
Location of the event: ZEW Mannheim

Speakers: Francisco H. G. Ferreira (London School of Economics, United Kingdom), Gary Fields (Cornell University, Ithaca, USA), Stephen P. Jenkins (London School of Economics, United Kingdom), Nora Lustig (Tulane University, New Orleans, USA), Kunal Sen (United Nations University World Institute for Development Economics Research (UNU-WIDER), Helsinki, Finland, and University of Manchester, United Kingdom), Jacques Gabriel Silber (Bar-Ilan University, Ramat-Gan, Israel), and Hyun H. Son (Asian Development Bank, Manila, Philippines)
Location of the event: Online

Doctoral Researcher (f/m/d, 75%) in the Research Department “Environmental and Climate Economics”

Tenure-Track Postdoctoral Researcher (f/m/d, 100%) in the Research Department “Environmental and Climate Economics”

Picture Credits: press release of 26.07.2022: Adobe Stock/Photocreo Bednarek, news article of 21.07.2022: YES! – Young Economic Summit, press release of 20.07.2022: AdobeStock.com/ivanovevgeniy, press release of 20.07.2022: Anna Logue Fotografie, press release of 14.07.2022: Bundesregierung / Hans-Christian Plambeck, news article of 12.07.2022: Adobe Stock/AMO, press release of 11.07.2022: xartproduction/AdobeStock380218183, press release of 08.07.2022: Erich Dichiser EDM, personalia article of 04.07.2022: Anna Logue Fotografie, press release of 04.07.2022: Erich Dichiser EDM
All further pictures: ©ZEW