Rudolf Winter-Ebmer

Identifying the Effect of Unemployment on Crime

Previous estimates of the effect of unemployment on crime commonly omit determinants of criminal behavior that vary with the business cycle, creating correlation between unemployment rates and the residuals in aggregate crime regressions. In this paper, we employ several strategies that attempt to minimize or break this correlation and eliminate the accompanying omitted variables bias to estimates of the effect of unemployment on crime. Using a state-level panel for the period from 1970 to 1993, we explore the sensitivity of crime-unemployment elasticity estimates to explicit controls for per-capita alcohol consumption, a factor that has been shown in the past to be pro-cyclical and a partial determinant of criminal behavior. In addition, we use prime defense contracts per-capita at the state level as an instrument for state unemployment rates. Both controlling for alcohol consumption and using instrumental variables to correct for omitted variables bias yields large effects of unemployment on the seven felony offenses recorded by the Department of Justice. Moreover, in contrast to previous research, we find significant and sizable positive effects of unemployment on the rates of specific violent, as well as property crimes.

A Simple Mechanism for the Efficient Provision of Public Goods - Experimental Evidence

This paper presents an experimental examination of the Falkinger (1996) mechanism for overcoming the free-rider problem. The basic idea of the mechanism is that deviations from the mean contribution to the public good are taxed and subsidized. The mechanism has attractive properties because (i) it induces higher contributions to the public good and can implement an efficient level of contributions as a Nash equilibrium, (ii) the government budget is always balanced irrespective of the level of individual contributions, (iii) it is simple and policy makers need only little information to implement the mechanism. To examine the empirical properties of the mechanism we conducted a large series of experiments. It turns out that the introduction of the mechanism generates immediate and large efficiency gains. This result is robust throughout many different experimental settings. Moreover, in the presence of the mechanism the Nash equilibrium is a rather good predictor of behavior.

The Long-Run Educational Cost of World War II

An important component of the long‐run cost of a war is the loss of human capital suffered by school‐age children who receive less education. Austrian and German individuals who were 10 years old during the conflict, or were more directly involved through their parents, received less education than comparable individuals from nonwar countries, such as Switzerland and Sweden. We also show that these individuals experienced a sizable earnings loss some 40 years after the war, which can be attributed to the educational loss caused by the conflict. The implied consequences in terms of gross domestic product loss are calculated.

Firm Size Wage Differentials in Switzerland: Evidence from Job Changers

We analyze firm size wage differentials by not only studying wage changes of workers who move between firms of different size classes but also by explicitly analyzing the underlying mobility decisions. Our analysis is based on a new data-set for Switzerland. We consider the OLS size premium as a distinct determinant of individual wages and ask how this wage-component affects the dynamics of individual wages over time and the mobility and search behavior of workers. We find no evidence for the hypothesis that larger employers provide worse working conditions, but about half of the OLS size differential is accounted for by worker heterogeneity.

Potential Unemployment Benefit Duration and Spell Length: Lessons from a Quasi‐Experiment in Austria

The paper studies the effect of potential unemployment benefit duration on the length of unemployment spells in Austria. It takes advantage of a quasi-experimental situation, where potential benefit duration was extended in 1988 for elderly workers living in specific regions of the country. The empirical analysis shows that men react significantly to benefit duration whereas women generally do not. The quantitative impact is smaller than in comparable studies for the U.S. and Germany. Furthermore, the impact of extended benefit duration is differentiated for short and long spells. Whereas for long spells higher impacts for men as well as for women are found, no unemployment-prolonging effects for short spells could be detected. Copyright 1998 by Blackwell Publishing Ltd

Are Austrian Returns to Education Falling Over Time

In this paper we make a systematic presentation of returns to education in Austria for the period 1981-1997. We use consistent cross-sections from the Mikrozensus and find falling returns over time. These falling returns are not caused by changes in the sample design and reduced willingness to reveal personal incomes in the survey. Moreover, it is shown that especially returns to university education have fallen. If the focus is not on mean returns, but if we apply quantile regression techniques, interesting patterns emerge: returns are falling the most in the lowest quantiles, but remain almost constant in the highest quantiles. The overall picture of falling returns is consistent with a rise in the supply of highly-educated workers in the recent two decades.

The Causal Effect of Education on Health: What is the Role of Health Behaviors?

We investigate the causal effect of education on health and the part of it that is attributable to health behaviors by distinguishing between short-run and long-run mediating effects: whereas, in the former, only behaviors in the immediate past are taken into account, in the latter, we consider the entire history of behaviors. We use two identification strategies: instrumental variables based on compulsory schooling reforms and a combined aggregation, differencing, and selection on an observables technique to address the endogeneity of both education and behaviors in the health production function. Using panel data for European countries, we find that education has a protective effect for European men and women aged 50+. We find that the mediating effects of health behaviors-measured by smoking, drinking, exercising, and the body mass index-account in the short run for around a quarter and in the long run for around a third of the entire effect of education on health.

Unequal Assignment and Unequal Promotion in Job Ladders

In this study gender differentials in professional status attainment are analyzed. In the theoretical literature, unequal treatment of females is often rationalized by their higher probability of quitting. To test this hypothesis empirically we use data from the Austrian microcensus and find that neither the risk of childbearing nor different productive characteristics can explain the crowding of females in lower hierarchical positions. Females have to fulfill higher ability standards to be promoted; work experience is not rewarded in the same manner as it is for men.

Why Do Students Expect to Stay Longer in College? Evidence from Europe

We investigate the expected college completion time of European college students by using data from a survey of more than 3000 students in 10 countries. We explain observed excess time to graduation by paying special attention to labor market variables, such as unemployment, wage differentials and employment protection, and to the funding of tertiary education.

Smoking, Discount Rates, and Returns to Education

Individual time preference determines schooling enrollment. Moreover, smoking behavior in early ages has been shown to be highly related to time preference rates. Accordingly, we use smoking at age 16 as an instrument for schooling in order to cope with ability bias in a returns to education regression. Doing this for Austrian cross-sectional data, we find no evidence of ability bias.