Carsten Ochsen

The social costs of unemployment: accounting for unemployment duration

This article contributes to the literature on unemployment and well-being by investigating the linkage between personal life satisfaction and a macroeconomic indicator of the duration of unemployment. Using data for more than 50 000 individuals in 10 European countries, 1992–2002, we find that the social costs of unemployment, in terms of general unemployments impact on life satisfaction, relate significantly and to a considerable extent to unemployment duration. It is thus not just the risk of becoming or staying unemployed that people worry about, but especially the prospect of staying long-term unemployed. This fear affects employed and unemployed people alike. Our findings provide a strong point for focusing labour market policies on long-term unemployment, in addition to considerations of human capital depreciation.

Dismantling of nuclear power in Germany: sectoral and macroeconomic effects

Abstract This paper studies the sectoral and macroeconomic effects of cutting the lifetime of existing nuclear power plants from 40 years (base case) to 30 years (phase-out case), given that no new capacity should be added in either case. These scenarios correspond to the positions currently held by the electricity industry and the German government, respectively, in the so-called energy consensus negotiations. Our method of analysis is to use a computable general equilibrium model which encompasses a detailed representation of the electricity supply industry. The nuclear phase-out entails an increase of the electricity price by up to 10 per cent and an ensuing fall in electricity demand by up to 4.5 per cent. The supply gap that remains after the fall in demand is accounted for is filled by additions to fossil-fuelled capacity. The macroeconomic effects of the phase-out are rather moderate on average, but display considerable dynamics which reflects variations along the time axis of the relative weight of expansionary capacity-replacement impulses and contractionary electricity price effects.

Teachers’ versus parental choice and the tracking distribution of students: a natural experiment

This article studies the secondary school track choice and considers to what extent parents’ and teachers’ assessment of students diverge. We take advantage of a reform in the German state of North Rhine-Westphalia (NRW) in 2006. The reform replaced parents’ choice about their children’s secondary school type by a binding teacher recommendation. Our data comprise class-level information on all public primary schools in the state. We find that teachers tend to recommend higher school types than parents. However, more precise analysis shows that this effect can be limited to districts with above average proportion of immigrants.

On the measurement of mismatch

We use a definition of an equilibrium rate of unemployment as a mismatch indicator. An application of the indicator to nine Organization for Economic Cooperation and Development (OECD) countries leads to diverging results. Most of the considered countries have experienced increasing mismatch in the 1970s and decreasing mismatch in the 1990s. The latter result is somewhat surprising, since mismatch was expected to be increasing in the 1990s. However, the estimates for Germany are against this international trend. Mismatch is not in general lower in countries with a more flexible labour market, but is decreasing in some of the countries which have chosen more flexibility on the labour market.