Oliver Himmler

Health and Wages: Panel Data Estimates Considering Selection and Endogeneity

This paper complements previous studies on the effects of health on wages by addressing the problems of unobserved heterogeneity, sample selection, and endogeneity in one comprehensive framework. Using data from the German Socio-Economic Panel (GSOEP), we find the health variable to suffer from measurement error and a number of tests provide evidence that selection corrections are necessary. Good health leads to higher wages for men, while there appears to be no significant effect for women. Contingent on the method of estimation, healthy males earn between 1.3 percent and 7.8 percent more than those in poor health.

It's the Media, Stupid - How Media Activity Shapes Public Spending

Politicians seeking reelection need voters to know what they have done for them. Thus, incentives may arise to spend more money where media coverage is higher. We present a simple model to explain the allocation of public spending across jurisdictions contingent on media activity. An incumbent seeking to maximize the probability of reelection will shift more money to jurisdictions where an extra dollar gains more votes because a larger share of the electorate is informed about his policy. This prediction is tested using US data on county-level public spending, Designated Market Areas (DMAs) and location of licensed television stations. Instrumenting for the possible endogeneity of media activity to public spending, 2SLS results confirm a positive effect of media coverage on county-level public spending. Spatial regression rules out the possibility of confounding media effects with spatial autocorrelation.

Double Standards in Educational Standards - Are Disadvantaged Students Being Graded More Leniently?

A simple model of decentralised graduation standards is presented. It is shown that a school whose students are disadvantaged on the labour market applies less demanding standards because such students have less incentives to graduate. The models predictions are tested using Dutch school-level data. Since students in the Netherlands have to participate both in a central and in a school specific examination, we can identify the grading policy of individual schools. We find that schools which harbour greater shares of disadvantaged students tend to set lower standards. This effect is largest in the branch of secondary schooling preparing for university.

Double Standards in Educational Standards – Do Schools with a Disadvantaged Student Body Grade More Leniently?

Abstract A simple model of decentralized graduation standards is presented. It is shown that a school whose students are disadvantaged on the labor market applies less demanding standards because such students have lower ability or less incentives to graduate. The model’s predictions are tested using Dutch school-level data. Since students in the Netherlands have to participate in both a central and a school specific examination, we can identify the grading policy of individual schools. We find that schools which harbor greater shares of disadvantaged students tend to set lower standards. This association is most pronounced in the track of secondary schooling that prepares for university.

Mass Media, Instrumental Information, and Electoral Accountability

Journalism is widely believed to be crucial for holding elected officials accountable. At the same time economic theory has a hard time providing an instrumental explanation for the existence of “accountability journalism”. According to the common Downsian reasoning, rational voters should not be willing to pay for information out of purely instrumental motives because the individual probabilities of casting the decisive vote are typically very low. We show that this rationale does not apply when a group of voters shares a common goal such as accountability and information is delivered via mass media. In contrast to the pessimistic Downsian view, rational voters can have a considerable willingness to pay for the provision of instrumental information in these scenarios. Our model thus reconciles the rational voter approach with the common perception of journalism as a watchdog that holds elected officials accountable.

Literacy and the migrant-native wage gap

Being able to read and write is one of the most important skills in modern economies. Literacy frequently is a prerequisite for employment and its relevance for productivity and wages is magnified by the fact that it is only through literacy that many other skills become usable. More so than for natives, this argument applies to migrants: even those with high levels of human capital acquired in the country of origin often have it rendered worthless by the absence of literacy in the host country language. Using novel data from a large-scale German adult literacy test (LEO - level-one study), we investigate the determinants of literacy and show that migrants have systematically lower language skills than natives. We find that any observed raw employment and wage gaps between natives and migrants can be fully explained by these differences.