Robert Schwager

• University of Göttingen

Quasi‐hyperbolic discounted preferences imply that consumers overemphasize immediate current rewards and overlook future ones (they have a “bias for the present”). Within this context the literature has emphasized that the misalignment between immediate and future rewards can be rectified by government policy. Importantly, it has also been shown th...

We present a theory explaining the impact of ability tracking on academic performance based on grading policies. Our model distinguishes between initial ability, which is mainly determined by parental background, and eagerness to learn. We show that achievements of low ability students may be higher in a comprehensive school system, even if there a...

We develop and test a theory of voting and turnout decisions that integrates self-interest, social preferences, and expressive motives. Our empirical analysis studies referenda among university students about whether to collectively purchase deeply discounted flat rate tickets for public transportation and cultural amenities. Individual usage data...

This paper explores conditions under which revenue-sharing grants will achieve efficiency. We develop a general formulation of the states decision problem of implementing a set of local policies. A theoretical analysis shows that if the state government pursues own policies and cannot levy lump-sum contributions from local jurisdictions, it will im...

This paper studies the determinants of academic success using a unique administrative data set of a German university. We show that high school grades are strongly associated with both graduation probabilities and final grades, whereas variables measuring social origin or income have only a smaller impact. Moreover, the link between high school per...

We develop and test a theory of voting and turnout decisions that integrates self-interest, social preferences, and expressive motives. Our model implies that if pocketbook benefits are relevant, voters either perceive their impact on the outcome to be non-negligible, or expressive motivations do not play a role in the decision on how to vote. Conv...

en We present a modified citizen‐candidate model where the implemented policy arises from a compromise between the government and an unelected external power. We show that the two‐candidate equilibria of this model differ significantly from the original: however small the cost of candidacy, the distance between the candidates' policies, both ideal...

When students receive better grades without any corresponding increase in ability, this is called grade inflation. Conventional wisdom says that such grade inflation is unavoidable since it is essentially costless to award good grades. In this article, we point out an effect driving into the opposite direction: Grade inflation is not actually costl...

This paper studies the determinants of academic success using a unique administrative data set of a German university. We show that high school grades are strongly associated with both graduation probabilities and final grades, whereas variables measuring social origin or income have only a smaller impact. Moreover, the link between high school per...

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 Netherland...

When students receive better grades without any corresponding increase in ability, this is called grade inflation. Conventional wisdom says that such grade inflation is unavoidable since it is essentially costless to award good grades. In this article, we point out an effect driving into the opposite direction: Grade inflation is not actually costl...

We examine the two-candidate equilibria of the citizen-candidate model when the implemented policy arises from a compromise between the government and an unelected external power. We show that the equilibria of this model differ significantly from the original: the distance between the candidates’ policies, both ideal and implemented, remains stric...

A model is presented where universities competitively supply education to mobile students. Students are subject to a liquidity constraint so that tuition must be paid out of pre-university income. It is shown that student loans provided by home jurisdictions will ensure an ecient quality of higher education if loans do not contain any subsidy. If t...

In this paper, citizens vote in order to influence the election outcome and in order to signal their unobserved characteristics to others. The model is one of rational voting and generates the following predictions: (i) The paradox of not voting does not arise, because the benefit of voting does not vanish with population size. (ii) Turnout in elec...

Der vorliegende Beitrag untersucht, ob eine Quantifizierung notwendiger Ausgaben kommunaler Körperschaften in ökonomisch fundierter Weise geleistet werden kann. Nachdem gezeigt wird, dass die tatsächlichen Ausgaben von Gemeinden oftmals stark variieren, wird erörtert, wodurch diese Unterschiede erklärt werden können, und ob die Berücksichtigung sol...

Evaluation of Germany's 20 biggest Tax Expenditures: 18 Billion Euro at one blow. Volume 2 of the German final report includes the evaluation of tax expenditures: - labor-intensive household services and certain craftsmen services (PIT); - tax free bonuses for night and weekend work PIT); - certain energy products (Energy Tax); - cultural and e...

A common feature of multi-jurisdictional systems is equalization programs. The implementation of such programs, that is based on some measurement of sub-national fiscal capacity and effort, is particularly complex. Within a political economy model, this paper analyzes the impact of such systems on accountability, identifying a positive and a negati...

A model is presented where workers of differing abilities and from different social backgrounds are assigned to jobs based on grades received at school. It is examined how this matching is affected if good grades are granted to some low ability students. Such grade inflation is shown to reduce the aggregate wage of the lower class workers because e...

A model is presented for simulating the level of taxes imposed on highly skilled labor. The effective average tax rate, defined as the relative wedge between employment costs and disposable income, is computed. Income and payroll taxes and social security contributions not yielding an equivalent benefit are taken into account. The compensation pack...

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 model's predictions are tested using Dutch school-level data. Since students in the Netherlands have to partic...

A simple Tiebout model is presented where states provide university education to both immobile and mobile students. State governments choose the quality of public universities by trading off the value of education for the local immobile student population and the costs, net of tuition revenues, of running the university. The quality of education an...

Im Hinblick auf eine mögliche Reform des kommunalen Finanzausgleichs in Niedersachsen weist dieser Beitrag auf den Zusammenhang zwischen diesem System und den Gewerbesteuerhebesätzen hin. Dafür werden die vom kommunalen Finanzausgleich ausgehenden Anreizeffekte auf die kommunale Hebesatzwahl analysiert und quantifiziert. Aus finanzpolitischer Sicht...

Conventional wisdom has it that outside sources of information enhance the capability of political institutions to separate selfish from benevolent incumbents. This paper investigates, in the presence of innovative public policies whose outcomes are uncertain, the role of outside information and shows that it is more involved than typically thought...

Recent literature has emphasized that redistributive grant systems may tend to internalize fiscal externalities arising from tax competition. This paper further explores the conditions under which local grant systems enforced by the state government will enhance efficiency. A system of redistributive grants among governments is introduced into a st...

Company taxes and taxes on highly skilled labour both influence the attractiveness of a particular region as a location for investment. We measure the effective tax burden on capital investment and on highly qualified labour in 33 locations across Europe and the United States. We then correlate both types of tax burden in order to study the differe...

We examine Italian inflation rates and the Phillips curve with a very long-run perspective, one that covers the entire existence of the Italian lira from political unification (1861) to Italy's entry in the European Monetary Union (end of 1998). We first study the volatility, persistence and stationarity of the Italian inflation rate over the long...

Conventional wisdom has it that policy innovation is better promoted in a federal rather than in a unitary system. Recent research, however, has provided theoretical evidence to the contrary: a multi-jurisdictional system is characterized—due to the existence of a horizontal information externality—by under-provision of policy innovation. This pape...

Many welfare schemes discourage low skilled individuals from working. In the same time, there is widespread support for the welfare state among the highly educated. We suggest a model which explains these seemingly contrasting observations. In our approach, intergenerational social mobility is conditional on labour market participation of the paren...

 The article provides a critical account of the situation of schools and universities in Germany. Based on this, the allocation of responsibilities for education policy in Germany's federal system is scrutinized. Hopes and fears associated with a more competitive, decentralized provision of education are discussed, referring to empirical studies. I...

Company taxes and taxes on highly skilled labour both influence the attractiveness of a particular region as a location for investment. We measure the effective tax burden on capital investment and on highly qualified labour in 33 locations across Europe and the United States. We then correlate both types of tax burden in order to study the differe...

ABSTRACT : This paper looks at how well Finland performs in high growth entrepreneurship and uses data from the Global Entrepreneurship monitor to benchmark Finland against other European countries. It is found that Finland’s prevalence rate of high growth entrepreneurial activity lags significantly behind most of its European and all of its Scandi...

This paper is concerned with the question of what extent population size and density affect the cost of providing public services at the subnational level. Empirical estimates of cost functions are obtained from an analysis of the expenditures of German states disaggregated into about 40 government functions. the empirical results indicate that, ge...

Is it possible to replace the income tax by a consumption tax or a wage tax such that (1) a dynamic (intergenerational) Pareto improvement is obtained and (2) only the information available from enforcing the income tax is used? In this article, it is shown that such a transition is feasible if and only if in a static setting, the consumption or wa...

A model is presented for simulating the tax burden on highly skilled manpower. The effective average tax rate, defined as the relative wedge between total remuneration and disposable income, is computed. Income and payroll taxes and social security contributions not yielding an equivalent benefit are taken into account. The compensation package con...

We investigate the salary returns to the ability to play football with both feet. The majority of footballers are predominantly right footed. Using two data sets, a cross-section of footballers in the five main European leagues and a panel of players in the German Bundesliga, we find robust evidence of a substantial salary premium for two-footed ab...

This article assesses the consequences of EU enlargement for east-west migration. It is argued that expectations on future economic, social and political variables are crucial for immediate immigration. Specifically, if EU membership is refused, fear of future restrictions on immigration will lead to increased current migration. Moreover, EU access...

Eine theoretische Analyse beleuchtet die strategische Investitionsentscheidung zweier Länder in die Ausbildung ihrer Abiturienten im Kontext von freier Studienortwahl und gebührenfreiem Studium. Die freie Inanspruchnahme des Bildungsangebots durch Abiturienten anderer Länder verursacht eine regionale Verteilungswirkung mit negativen Anreizeffekten...

The paper considers the introduction of a surtax on the federal income tax as a means to provide German states with more taxing autonomy. Simulations indicate that even a modest reform would result in strong disparities either in tax revenues or in tax rates across states. Given this background it seems likely that a reform would partially compensa...

Zusammenfassung Als mögliche Ausgestaltung einer Steuerautonomie der Länder wird ein Zuschlagsmodell bei der Einkommensteuer diskutiert. Anhand der tatsächlichen Aufkommenszahlen der letzten Jahre berechnete Projektionen zeigen, dass auch bei einer moderaten Reform entweder erhebliche Aufkommensdifferenzen oder stark divergierende Zuschlagssätze fü...

We assess the design of the recent environmental tax reform in Germany. Based on fundamental welfare economics we argue that extensive tax reductions and rebates in favour of energy-intensive industries, as provided by the tax reform, substantially water down its cost-effectiveness. The environmental tax reform essentially boils down to a fiscally...

We assess the design of the recent environmental tax reform in Germany. Based on fundamental welfare economics we argue that extensive tax reductions and rebates in favour of energy-intensive industries, as provided by the tax reform, substantially water down its cost-effectiveness. The environmental tax reform essentially boils down to a fiscally...

Based on a representative consumer framework, it has been argued that wage taxation is inferior to consumption taxation. This note shows that the opposite result may emerge in a model where households are heterogeneous and where a uniform (poll) tax or subsidy is available.

We use a stylized model to show that, if transfers to the poor are founded on a security argument, there is a negative trade-off between law enforcement expenditures and criminality. In contrast, if transfers are based on altruism, the correlation between the same variables may appear positive. We argue that it provides a plausible eplanation for t...

In der westlichen Welt wird die Fürsorge für jene, die infolge nicht selbst zu verantwortender Umstände von Armut und Hunger bedroht sind, seit langem als Verpflichtung der Gesellschaft akzeptiert… Die Notwendigkeit solcher Regelungen in einer Industriegesellschaft steht außer Frage – sei es auch nur im Interesse derer, die Schutz vor Akten der Ver...

We assess the design of the recent environmental tax reform in Germany. Based on fundamental welfare economics we argue that extensive tax reductions and rebates in favour of energy-intensive industries, as provided by the tax reform, substantially water down its cost-effectiveness. The environmental tax reform essentially boils down to a fiscally...

In der Diskussion um die Reform der föderalen Finanzverfassung wird oft eine Stärkung der Steuerautonomie der Länder gefordert. Seitens der Befürworter wird die damit verbundene Ausweitung der Eigenverantwortlichkeit begrüßt, von der stärkere Anreize für eine solide Haushaltspolitik und Effzienzorientierung erwartet werden. Allerdings würde eine St...

A model where a portion of the population participates in illegal activities is developed. The propensity to participate in crimes depends on the probability and the opportunity cost of being arrested. The government can influence these variables by law enforcement expenditures and by social transfers. We analyze the cost minimizing policy mix and...

This paper assesses the consequences of EU enlargement for East West migration. In the theoretical part, we identify several factors in addition to the reduction of moving costs by which EU membership influences migration. Specifically, EU accession affects income gaps. Moreover, if EU membership is refused, fear of future restrictions on immigrati...

This article discusses metropolitan governments which cover the area of several communities. Such a government supplies a public facility like a dump which is beneficial for the whole region but imposes a cost onto the community where it is located. It is shown that a metropolitan institution may be created by consensus of the concerned communities...

Under administrative federalism, the central state sets quality standards for public projects and the local jurisdictions decide which projects are carried out. Decentralized decisions suffer from an interjurisdictional spillover. The central state cannot distinguish between useful and useless projects. It is shown that administrative federalism is...

This paper challenges the assertion that European politics would be closer to the citizens´ preferences if decision power were transferred from the Council of Ministers to the European Parliament. On the one hand, citizens benefit from a greater transparency in the Parliament´s debates compared to the Council´s decisions. On the other hand, a power...

We use a stylized model to show that, if transfers to the poor are founded on a security argument, there is a negative trade-off between law enforcement expenditures and criminality. In contrast, if transfers are based on altruism, the correlation between the same variables may appear positive. We argue that it provides a plausible eplanation for t...

Administrative federalism is defined as a constitution where the central state sets quality standards for public projects, and the local jurisdictions decide which projects are to be carried out. Decentralized decisions are inefficient because of an interjurisdictional spillover. A centralized decision is inefficient because the center favors one r...

A model where a portion of the population participates in illegal activities is developed. The propensity to participate in crimes depends on the probability and the opportunity cost of being arrested. The government can influence these variables by law enforcement expenditure and by social transfer. We analyze the cost minimizing policy mix and th...

In this paper, redistribution is studied in the presence of migration externalities. Administrative federalism is defined as a constitution where statutory tax and transfer levels are set nationally, while local administrations may refuse to pay the transfer or rebate the tax in single cases, thereby introducing horizontal inequity. With risk avers...

In diesem Kapitel wird die Rolle von Geld in Walras—Gleichgewichten des Modells überlappender Generationen behandelt. Wir beginnen im Abschnitt 2.1 damit, kurz einige wichtige Ergebnisse über dieses Modell vorzustellen, um unsere Überlegungen in die Fragestellungen einzuordnen, die in der Literatur vorherrschen. Im Abschnitt 2.2 wird dann die Frage...

Dieses Kapitel schließt an die Untersuchung der Rolle des Geldes in Ökonomien mit der Struktur überlappender Generationen an. Wir stellen bilaterale Transaktionen nicht mehr nur auf der Ebene der Interpretation von Walras-Gleichgewichten dar. Die explizite Beschreibung der bilateralen Abwicklung des Tauschs und der Bestimmung der Tauschverhältnisse...

In dieser Arbeit wird die Bedeutung fehlender doppelter Übereinstimmung der Tausch wünsche für die Begründung der Geldnachfrage analysiert. Die Kombination von überlappender Nachfragestruktur und bilateralen Transaktionen erklärt, warum die Individuen einer Tauschwirtschaft Zahlungsmittel verwenden. In Walras—Gleichgewichten von Ökonomien überlappe...

In diesem Kapitel wird die Rolle von Geld als Zahlungsmittel in Arrow—Debreu— Ökonomien mit endlich vielen Gütern und Haushalten diskutiert. Wir greifen eine von Cass und Yaari (1966, S. 365f) aufgestellte These auf, wonach ein Arrow— Debreu—Modell als Geldwirtschaft oder zumindest als eine Ökonomie mit einem funktionierenden Zahlungssystem interpr...

In principle, the set of attainable payoff vectors is reduced if assets cannot be sold short. However, the authors show that the original space of payoff vectors is spanned despite short sale restrictions if there is one additional asset whose payoff is a positively weighted sum of the payoffs of the original assets. For example, this condition is...

Das Land Mecklenburg-Vorpommern muss in Zukunft mit deutlich geringeren Zahlungen aus den im Rahmen des Solidarpakt II” gewährten Bundesergänzungszuweisungen rechnen. Darüber hinaus wirft auch die demografische Entwicklung, die in Mecklenburg- Vorpommern durch einen starken Rückgang der Bevölkerung geprägt ist, fiskalische Probleme auf. Diesen krit...

Das Land Mecklenburg-Vorpommern und seine Gemeinden und Gemeindeverbände sehen sich wegen der demographischen Entwicklung und wegen des Rückgangs der Mittel aus dem Solidarpakt II bedeutsamen finanzpolitischen Herausforderungen gegenüber. Vor diesem Hintergrund ist zu begrüßen, dass der Landesgesetzgeber eine umfangreiche Novellierung des kommunale...