economics

Simeon Vosen, RWI

Fixed Amounts Saving and the Permanent Income Hypothesis

Abstract

According to the German SAVE survey, more than 40 percent of households regularly save fixed amounts rather than flexibly adjusting savings to income variations as assumed by the Permanent Income Hypothesis (PIH). Fixed amounts saving behaviour could thus imply a challenge to PIH-based standard models of consumption if it meant that a substantial share of households would consume rather than save transitory income. A deeper examination of the SAVE-data, however, suggests that the PIH might still be compatible with fixed amounts saving behaviour since (a) the transitory income component of fixed amounts savers? tends to be relatively low and (b) larger one-off receipts of income likely to be transitory increase the probability of fixed amounts savers to alter their saving behaviour and save the residual. Analysis of aggregate data on the other hand indicates that fixed amounts saving accounts for at least some of the excess sensitivity of consumption to predictable income changes observed in Germany. This implies that fixed amounts saving behaviour is indeed at odds with the rational expectations version of the PIH.

Ingo Isphording RUB

Returns to Local and Foreign Language Skills -- Causal Evidence from Spain

Abstract I Paper

This study is concerned with the identification of returns to language skills of immigrants in the Spanish labor market. To deal with different sources of endogeneity of language skills, a measure of phonetic dissimilarity between languages is used to instrument English and Spanish proficiency. Using cross-sectional data from the National Immigrant Survey of Spain from 2007, returns to language skills are separately estimated for blue- and white-collar occupations. The results give evidence for severe down- and upward biases of OLS estimates. The 2SLS-estimates show a strong heterogeneity of returns across languages and occupations. Good Spanish language skills are rewarded by a income premium by up to 41 % in blue-collar occupations.
No significant premium can be found for white-collar occupations.
Contrarily, good English skills are rewarded only in white-collar occupations by a premium of 54 %. These high estimates show the significant ``entrance ticket''-property of language skills to high-paid jobs, which is intensified by the shortage of high-level English skills in the Spanish economy.

Prof. Dr. Thomas Bauer, RUB / RWI

Abstract I Paper

Bettina Lamla, Munich Center for the Economics of Aging (MEA)

Private old age provision and informal networks: A siblings approach

Abstract

Dr. Susan Steiner,  DIW

"Oil and Inequality: Is Kazakhstan Different?"

Abstract

Prof. Dr. Ulrike Neyer, Universität Düsseldorf

Andreas Orland, RUB