Silke Uebelmesser

To Go or Not to Go: Emigration from Germany

Abstract This study analyses the qualitative aspects of emigration from Germany, taking account of economic and non-economic reasons. The reported willingness to emigrate from Germany in the German Socio-Economic Panel (GSOEP) is explained for men and women by three groups of variables: individual characteristics, household characteristics and regional characteristics. It transpires that the educational background and West German residency positively affect the willingness to emigrate, whereas German nationality, age and the family situation are mostly negatively correlated with it.

On the Optimal Timing of Implicit Social Security Taxes Over the Life Cycle

Are there still opportunities for welfare-improving reforms in unfunded pension systems? To answer this question, we analyze the intertemporal structure of implicit taxes in pay-as-you-go pension schemes. We demonstrate that these tax rates are declining over the life cycle. This timing is optimal if periodic wage elasticities of labor supply are inversely related to the tax structure. Using German micro data for men and married women, we estimate periodic wage elasticities of labor supply. We observe that an efficient taxation would require implementing a steeper tax profile for male workers and a U-shaped (or mildly N-shaped) tax profile for female workers in addition to a general reduction of the level of implicit tax rates for the latter.

Mobility and the Role of Education as a Commitment Device

In closed economies, human capital investment faces a hold-up problem of excessive redistributive taxation. Increased international labor mobility, however, changes the constraints which affect optimal education and tax policy. We show that in a non-altruistic, gerontocratic world, investments in human capital which increase the mobility of the young generation can be interpreted as a commitment device overcoming the hold-up problem. This is in line with Kehoe (1989) who derives a similar result with respect to capital mobility.

Why Go to France or Germany, if You Could as Well Go to the UK or the US? Selective Features of Immigration to the EU ‘Big Three’ and the United States

Building on a new data set which is constructed from a combination of national micro-data bases, we highlight differences in the structure of migrants to four countries – namely, France, Germany, the UK and the US – which receive a substantial share of all immigrants to the OECD world. Looking at immigrants by source country, we illustrate the important role of distance, both geographical and cultural, immigration policies and migrant networks. Differentiating immigrants by their educational attainments, we observe interesting patterns in the skill composition, employment opportunities and wages of migrants to the different destination countries. Focusing on migration between the four countries in our data set, we find that migration within western Europe is small and rather balanced in terms of skill structures, while there appears to be a brain drain from Europe to the US.

Political Feasibility of Pension Reforms

The impending demographic crisis calls for fundamental reforms of old-age security. In a democracy, however, reforms require the support of the majority. We determine for Germany, France and Italy the latest point in time at which a majority is in favour of a reform. For this, we calculate for each year the “indifference age” as the age of the cohort that is not affected by the reform and the “median age” as the age of the politically decisive cohort. In Germany, a reform can be democratically enforced until 2012. France becomes a gerontocracy in 2014 and Italy already in 2006. JEL: H55

International Migration, Human Capital Formation, and the Setting of Migration-Control Policies: Mapping the Gains

Recent research has identified conditions under which migration of human capital (skilled workers) from a developing (sending) country to a developed (receiving) country enhances human capital formation and improves wellbeing within the sending country (Mountford, 1997; Stark, Helmenstein, and Prskawetz, 1997, 1998; Stark and Wang, 2002; Fan and Stark, 2007; Stark and Fan, 2007, 2008). In contrast to earlier writings on the brain drain (for example, Patinkin, 1968; Bhagwati and Wilson, 1989), the recent contributions cast migration as a harbinger of human capital gain rather than a cause of human capital drain.

Empirical determinants of in-kind redistribution: Partisan biases and the role of inflation

There is a dearth of research on the determinants of in-kind redistribution. Using dynamic panel data estimations for 32 OECD countries, we show that the in-kind share of social benefits is lower under left-wing governments. This effect is weakened when left-wing governments respond to inflation by increasing the share of in-kind transfers.

An Optimal Selective Migration Policy in the Absence of Symmetric Information, and in the Presence of Skill Formation Incentives

In this chapter we study the selection policy of incoming migrant workers when the receiving country’s own welfare guides the formation of policies, when selection is made under asymmetric information, and when workers differ in terms of their level of human capital. Informational asymmetry arises when employers in the receiving country (in contrast to employers in the sending country) cannot decipher the true skill level of individual workers (who, however, know well their own skill levels). Selection is achieved via levying a proportional tax on migrants’ earnings. (An equivalent way of conceptualizing the selection tool is to think of it as an entry fee to be paid in the form of a tax on earnings.1) We calculate the optimal tax when human capital is fixed — ‘a fixed human capital framework’ — and in the presence of a human capital formation incentive — ‘an adjustable human capital framework’.

Student and Graduate Migration and its Effect on the Financing of Higher Education

ABSTRACT In higher education systems that are partly tax funded, a country might not be willing to subsidize the education of international students who might leave after graduation. This paper analyzes how student migration affects governmental decisions regarding the private funding share of higher education for 22 OECD countries for the period of 2000–2011. Based on fixed effects estimations, we find a significant positive correlation. This result is robust to changes in the specification, including estimations for country groups and for an expanded lag structure. The use of an instrumental variable approach supports a causal interpretation.

The Political Economics of Higher Education Finance for Mobile Individuals

We study voting over higher education finance in an economy with two regions and two separated labor markets. Households differ in their financial endowment and their children’s ability. Non-students are immobile. Students decide where to study; they return home after graduation with exogenous probability. The voters of the two regions decide on whether to subsidize higher education costs or whether to rely on tuition fees only. We find that in equilibrium, in both regions a majority votes for subsidies when the return probability is sufficiently small. When that probability is large, both regions opt for full tuition finance. Interestingly, the higher the return probability, the smaller are the equilibrium subsidy rates, but the larger are the numbers of exchange students.