Projects

This research project investigates the effects of unemployment on the subjective well-being of affected individuals and of people in their social environment. For this purpose, data from social surveys such as the German Socio-Economic Panel (SOEP) and comparable surveys from other countries, as well as time-use and well-being studies (such as the American Time Use Survey), are analyzed.
Previous work in this project has examined, for example, how participants in public employment programs feel compared to unemployed and regularly employed individuals; how entering retirement affects satisfaction and whether it matters if one was employed or unemployed just before retirement; and for which groups in the labor market employment protection legislation and restrictions on fixed-term contracts have positive or negative effects on well-being.
A particular focus of this research project is on the multidimensionality of well-being. In addition to cognitive measures, affective well-being indicators are also analyzed. Previous findings show that unemployment has a negative impact on cognitive well-being but not on affective well-being.
Further research will focus on analyzing in more detail the determinants of affective well-being and their interaction with experiences of unemployment.

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The economic literature generally recognizes three main components of well-being. Cognitive well-being (evaluative measures), affective well-being (emotional experience) and eudaimonic (sense of purpose). While many papers have been written about the relationship between income and cognitive well-being, generally finding a positive relationship, evidence for the relationship between affective well-being is less numerous and occasionally contradictory.
This project aims to establish the relationship between income and affective well-being using multiple datasets and estimation methods to identify common patterns. The primary analysis will be based on datasets containing Day Reconstruction Method (DRM) data, which is a method originally developed by Daniel Kahneman and colleagues. Participants record what they were doing over the course of a day in a time-use diary and also report their emotional experience in those (or some of these) episodes. The diaries are typically filled out shortly after the end of the day covered by the diary. This allows researcher to get a detailed picture of the emotional experience of participants with minimal recall bias. The analysis may be supplemented with datasets containing other types of data on affective well-being, such as Experience sampling Method (ESM) data, where respondents are contacted at various points throughout the day and asked to report their emotional experience in that particular moment.
Core questions to be addressed with these analyses are:
Are there systematic differences between how affective and cognitive well-being relate to income?
Are there plateaus in relationship or does the association change substantially beyond some level of income?
Following the purely descriptive analyses, this project will continue with a first tentative investigation of the reasons for the established relationships. Such as by analyzing differences in the time use of respondents across income levels.

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Many developed countries have made it an explicit policy goal to support equal sharing of childcare and household responsibilities as well as market work. Differences in labor supply of men and women typically emerge after the birth of the first child and often remain permanently. Thus, the birth of the first child marks a critical transition. Consequently, policy instruments targeting this time have the potential to change long-run outcomes substantially by preventing the gap from opening up in the first place. In this context, parental benefits have received special attention because depending on the particular regulations embedded in the benefit scheme, they have the potential to counteract or reinforce specialization according to traditional gender roles and naturally directly target the crucial transition into parenthood.
This project analyzes how different parental benefit schemes affect the division of labor by couples. Initially the focus will be on the German parental benefit called “Elterngeld” and specifically the ElterngeldPlus regulations. However, the project can be extended to analyze other aspects of the parental benefit scheme or reform suggestions. To this end, the project employs different research methodologies, including the analysis of data from existing large scale household surveys and data gained from experiments specifically designed for this project.
Besides analyzing the consequences of specific regulations, a second focus of this project is to investigate the circumstances which may prevent the regulations from reaching their full potential impact, such as insufficient information provision regarding the actual incentives incorporated in the benefit scheme.

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Many economic decisions of individuals are made in the context of a family, either because they are explicitly made collectively or because individual household members take the other family members into account when making their decisions. Family policy measures can influence these decisions by changing the framework conditions under which the decisions are made. For example, the right to a childcare place for young children could increase labor market participation and lifetime earnings and reduce poverty in old age. In addition, some family policy measures also aim to change the family structure itself and therefore also influence the lives of individuals through this channel. For example, when parental allowance was introduced, an increase in the birth rate was mentioned as an explicit goal. Various family policy measures are to be evaluated in this project. The explicitly stated goals of the various measures as well as other target variables such as labor market participation, employment levels, individual well-being, gender equality and child development will be taken into account.
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Even more than three decades after reunification, differences in social behavior between East and West Germans persist. Using data from anonymized income tax statistics, we investigate whether an alignment in prosocial behavior patterns can be observed, focusing on charitable giving. Consistent with previous results from laboratory experiments and analysis of survey data, we find that differences in overall giving behavior persist. Furthermore, our analyses show that the differences within birth cohorts do not converge, but that there are even signs of divergence. On the other hand, younger birth cohorts who were socialized after reunification show smaller differences than older cohorts who were socialized in two different systems. Our results support the hypothesis that the age structure and its development over time impede the convergence of prosocial behavior patterns. Initially, the ageing effect has a stronger impact than the socialization effect. Over time, the natural change in cohort structure (differences between cohorts) should lead to a reduction in differences in social behavior. The fact that this has not (yet) been observed is due to the fact that the older cohorts are growing apart faster than younger generations. If this process is extrapolated accordingly, the demise of older cohorts will result in greater convergence in the population cross-section.
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This project investigates why unemployed individuals report lower emotional well-being than employed individuals—even during leisure time. Previous research (e.g., Knabe, Schöb, Rätzel, and Weimann, Economic Journal, 2010) showed that unemployment reduces life satisfaction not only through income loss or lack of work-related purpose, but also because leisure itself becomes less enjoyable—a phenomenon known as the “saddening effect” of unemployment.
The project aims to unpack and quantify the channels through which this saddening effect arises. Using time-use and well-being diary data from the UK Time Use Survey (UKTUS 2014–2015), American Time Use Survey (ATUS 2010–2013, 2021), and German Socio-Economic Panel (SOEP 2012–2015), we analyze how unemployed and employed individuals experience emotional well-being across different daily activities.
The empirical strategy combines mediation analysis and Oaxaca–Blinder decompositions.
Preliminary results from the UKTUS data confirm a significant saddening effect of unemployment, particularly for men and during core leisure activities. However, differences in income, activity duration, or education explain little of this gap. The most consistent factor is that unemployed individuals spend more of their leisure time alone, which strongly reduces the emotional payoff from non-work activities.
By integrating evidence from multiple countries and datasets, the project seeks to clarify the mechanisms behind the emotional costs of unemployment and to identify potential policy levers for mitigating its psychological burden.

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Intergenerational wealth transfers - that is, gifts and inheritances - intensify inequality of opportunity in wealth accumulation and income generation. Such transfers can enable individuals to purchase or retain real estate, start or run a business, or invest in other assets (at possibly higher rates of return). At the same time, these transfers may reduce recipients' own efforts by diminishing their incentive to work - a phenomenon often referred to as the Carnegie effect. This project contributes to the relatively small body of literature that provides empirical evidence for this latter effect.
Earlier studies have restricted their attention to realized labor supply decisions following the receipt of wealth (inheritances, gifts, or lottery wins) or when gifts or inheritances are expected. Most of them support the finding that labor force participation and working hours tend to decline after a transfer is received or expected.
In this project, we analyze rich household survey data from different sources (the Dutch National Bank Household Survey and the HFCS). These datasets provide detailed individual-level information on received inheritances and gifts, including their monetary value, as well as wealth transfer expectations. In addition to labor market status and working hours they also include information regarding retirement expectations. These responses may be particularly informative, as labor supply changes may manifest primarily toward the end of one’s working life. Detailed micro-econometric analyses taking the specific characteristics of each dataset into account then allow us to test if intergenerational transfers alter recipients’ opportunity to work less and retire earlier.

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In this project, we examine whether and to what extent patterns of charitable donations still differ between the two parts of Germany more than 30 years after reunification. Despite significant convergence in living standards and many social attitudes, earlier studies have shown persistent differences in social behavior and solidarity-related values. This project asks whether such differences are also reflected in real-world acts of generosity.
Using anonymized individual data from the German income tax statistics (FAST) for the years 1998–2020, the project analyzes the incidence and amount of charitable donations and compares them between East and West Germany. These administrative data offer a large and detailed sample, allowing robust analysis over time.
Preliminary results suggest that people in East Germany donate less frequently and in smaller amounts than those in West Germany. While income differences initially explained much of this gap, the analysis indicates that over time, the unexplained (likely cultural or attitudinal) component has grown. Overall, the project will produce insights whether solidarity-related behaviors such as charitable giving still display a persistent East–West divide, which would suggest that historical, cultural, and institutional legacies of the socialist period continue to shape social behavior in reunified Germany.

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The Day Reconstruction Method (DRM), developed by Daniel Kahneman and colleagues, is a diary-based approach designed to measure people’s emotional well-being throughout the day. Participants divide the previous day into distinct episodes and report how they felt during each one. Researchers then calculate an individual’s overall well-being—what Kahneman has termed “objective happiness”—as the duration-weighted average of emotional experiences across all episodes.
However, it remains unclear whether this is actually how people evaluate their day. In existing well-being research using the DRM, this assumption has rarely been questioned or tested empirically. Other psychological studies, including those by Kahneman himself, suggest that retrospective evaluations of experiences often follow different cognitive rules—such as the peak–end rule (judging experiences by their most intense and final moments) or duration neglect (disregarding how long episodes lasted).
This project examines how people truly aggregate their emotional experiences when evaluating their day. Using novel data from the German Job Seeker Panel (GJSP)—to our knowledge, the first DRM study that also asks respondents to rate their overall emotional experience of the day—we will test which aggregation models best predict people’s overall evaluations. By comparing the predictive power of duration-weighted averages, peak–end models, and other heuristics, this study will provide new insights into how individuals form summary judgments of their daily well-being and improve the interpretation of time-use and well-being data.

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While studies of global life evaluation mainly reaffirm the undesirable impacts of unemployment on subjective well-being, there are only few studies examining its impact on daily emotional experiences. In this project, we attempt to examine the impact of unemployment on different aspects of subjective well-being, particularly the emotional well-being experienced on a day-to-day basis and the channels through which unemployment influences these experiences, using micro data from the UK (UK Time-Use Survey) and the US (American Time-Use Survey). A previous study by Knabe et al. (2010) showed that unemployment is negatively linked to how individuals assess their general life and the level of pleasure they attain while doing an activity, but hardly has an effect on the emotional balance over the course of the day. The conflicting finding was obtained by Krueger and Mueller (2012) who reported that jobless people felt significantly sadder than employed people both in participation of specific activities and on an average of the day.

Building on these previous studies, we will extent this line of research in several dimensions. We take into account the differentiation of time-use and well-being by gender, by days of the weeks and by social contact possibilities. Furthermore, we will provide attempts to identify the origin and magnitude of saddening effect by examining the relationship between social contacts and time composition.

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While studies of global life evaluation mainly reaffirm the undesirable impacts of unemployment on subjective well-being, there are only few studies examining its impact on daily emotional experiences. In this project, we attempt to examine the impact of unemployment on different aspects of subjective well-being, particularly the emotional well-being experienced on a day-to-day basis and the channels through which unemployment influences these experiences, using micro data from the UK (UK Time-Use Survey) and the US (American Time-Use Survey). A previous study by Knabe et al. (2010) showed that unemployment is negatively linked to how individuals assess their general life and the level of pleasure they attain while doing an activity, but hardly has an effect on the emotional balance over the course of the day. The conflicting finding was obtained by Krueger and Mueller (2012) who reported that jobless people felt significantly sadder than employed people both in participation of specific activities and on an average of the day.

Building on these previous studies, we will extent this line of research in several dimensions. We take into account the differentiation of time-use and well-being by gender, by days of the weeks and by social contact possibilities. Furthermore, we will provide attempts to identify the origin and magnitude of saddening effect by examining the relationship between social contacts and time composition.

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The dissertation will deal with the interaction between the labor market and the family. In particular, the influence of family events on labor market decisions and vice versa will be examined. Aspects from economic happiness research will also be taken into account. The focus will be on empirical analysis.
This text was translated with DeepL on 26/02/2026

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A large number of consumption decisions are made at household level. An individual's consumption and material standard of living always depends on the number and characteristics of the members of their household, for example due to economies of scale in household size and interpersonal differences in needs and preferences. Satisfaction research also shows that the subjective well-being of different household members influences each other - partly via interdependencies in consumption, but also via various psychological channels. The dissertation comprises a series of empirical studies that reveal such interdependencies in subjective well-being and subjective income assessment or use them to quantify interdependencies in consumption.
The first part of the research project includes two studies that determine equivalence scales in market income and thus interdependencies in market consumption on the basis of the income satisfaction reported by members of different types of households. The first study focuses in particular on the significance of reference effects in income assessment, the second on the consequences of measurement errors in household income.
The second part of the research project includes the essential component of time in the analysis by looking at the consumption of goods and services produced in the household. The first study in this sub-project examines the monetary costs of children depending on their parents' employment status on the basis of mothers' subjective income assessment. The second study estimates equivalence scales in extended income, i.e. the sum of market income and household production, using income satisfaction and time use data.
The third part of the dissertation deals with the effects of a change in the consumption-generating behavior of one household member on the subjective well-being of another. The first study shows the effect of an increase in the partner's household activities on satisfaction with the standard of living. The second study examines the influence of a parental job loss on the life satisfaction of adolescent children living in the household.
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It is widely known in the literature that job loss has a negative impact on a person's life satisfaction or health, for example. However, the effects of job loss extend not only to the individual who loses their job, but also to family members. The aim of this project is to investigate such effects. For example, the effects on the divorce rate or on the satisfaction of children are examined. The analysis is empirical. The study focuses on involuntary job losses in order to minimize both anticipation effects and interactions with unobserved factors.
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In the recent past, there have been numerous legal interventions in the flexibility of the German labor market. These include, for example, changes to protection against dismissal. The aim of the project is to investigate the effect of a change in dismissal protection on labor market policy variables. Panel data at micro and macro level are used for the empirical analysis.
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Work and unemployment play an important role in people's quality of life. Studies on life satisfaction have shown that unemployment is one of the life events that reduces satisfaction the most. In contrast, much less research has been done on how participation in active labor market policy measures affects subjective well-being. In this project, we want to analyze data on the cognitive and affective well-being of participants in work opportunities (1-euro jobs), which we collected ourselves using the Day Reconstruction Method, and compare these with satisfaction data from other sources (SOEP, PASS). Comparing this data with that of regular employees and the unemployed will allow us to draw conclusions about the effects of such measures on the subjective well-being of the participants and thus about the immediate benefits of such measures, i.e. those that occur independently of subsequent success in the labor market.
A second sub-project in this area will deal with the psychological effects of combined wages. A standard result of economic theory states that it does not matter in the long term whether wage subsidies are paid to employers or employees, as the pass-on processes on the market ultimately lead to identical results. However, this logic presupposes that it does not matter to the employee from which source they receive their income. However, the political discussion about supplementary benefits indicates that the receipt of supplementary social benefits is often perceived as stigmatizing and sometimes humiliating by those affected. The aim of this research project is to investigate whether negative effects of combined wages of this kind can be determined using the methods of satisfaction research. The aim is to determine whether similar effects occur when the combined wage is paid to the employer while the employee's total income remains the same. If the payment of wage supplements to employees is accompanied by negative psychological effects of this kind, this would weaken the benefits of this instrument. If these negative effects have a negative impact on the willingness to participate and motivation to work, the ability of this instrument to achieve positive employment effects would even be reduced. If these effects do not occur with employer subsidies, this would refute the theoretical equivalence of both instruments and argue in favor of the use of employer wage subsidies.
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This project deals with the determination of equivalence scales using subjective satisfaction data. In contrast to previous studies using this method, an explicit distinction is made between need effects and comparison effects that affect satisfaction. Theoretical considerations indicate that comparison effects lead to a biased estimation of the equivalence weights, which assigns too high a weight to adults and too low a weight to children. This hypothesis is to be tested empirically. In particular, it will be investigated whether the previously very low estimated equivalence weights of children can be explained by unaccounted comparative effects. In addition, the potential income dependence of the equivalence scale is to be taken into account.
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Since the mid-1990s, the German labour market has been characterized by rising wage inequality, which has been accompanied by an increase in the proportion of low-paid jobs. In the political debate, this development is associated with the concern that low wages lead those affected into a dead end of poor pay and an increased risk of poverty. In order to be able to assess the social impact of this development, a better understanding of the role of the low-wage sector for the individual employment prospects and the risk of poverty of those affected is necessary. However, initial empirical studies on the German low-wage sector do not support the fears of an employment-related dead end and instead see it as an instrument for combating unemployment. The aim of this research project is to empirically examine how taking up employment in the low-wage sector actually influences the employment prospects and poverty risk of those affected. To this end, it will be investigated whether a low-paid job can positively influence the prospects of a better-paid job and to what extent such an upward effect depends on the duration of employment in the low-wage sector. Furthermore, it is to be determined which adjustments are made in labor supply behavior in couple households when the labor market position of the spouse changes. Of particular interest here is whether in couple households one partner takes up a low-wage job as an instrument to compensate for exogenous labor market shocks, such as unemployment of the other partner. Furthermore, the connection between low wages and individual poverty risk will be examined. Of particular interest here is the question of whether the experience of poverty has an independent influence on the probability of remaining in low-paid work.
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In many European countries, trade unions play a decisive role in determining wage trends and working conditions. For the economic analysis of such collectively acting labor market actors, it is therefore necessary to explicitly depict the behavior of trade unions in theoretical models. In theoretical labor market economics, wage negotiations are generally modeled using the Nash bargaining solution. However, experimental studies have cast doubt on the empirical relevance of this bargaining solution.
The first part of this research project therefore examines the effects of the alternative application of the Kalai-Smorodinsky solution compared to the Nash solution in common theoretical labor market models. In the first part of the project, the Kalai-Smorodinsky solution is integrated into models of general equilibrium with imperfect competition as well as into search and matching models of the labor market and examined with regard to its impact on equilibrium unemployment and the possibility of influencing it through policy instruments. First results of this project show that the choice of bargaining solution can have critical effects on the evaluation of the impact of labor market policies, for example minimum wages.
In the second part of the project, these results will be tested empirically and experimentally. To this end, the theoretically derived hypothesis that even non-binding minimum wages can have a wage-increasing effect in Kalai-Smorodinsky negotiations is tested experimentally. To this end, wage negotiations are simulated in the laboratory in which a low minimum wage is introduced and successively increased in later rounds. Initial results show that the Kalai-Smorodinsky solution can actually describe wage negotiations observed in the laboratory better than the Nash solution.
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Satisfaction research shows that unemployment greatly reduces the subjective life satisfaction of those affected. At the same time, however, unemployment has hardly any effect on people's average emotional well-being during specific events (Knabe et al. 2010, Economic Journal). These two findings suggest that life satisfaction depends less on concrete experiences and more on the achievement of certain individual goals and the fulfillment of social norms.
As a test of this thesis, this research project will examine how retirement affects the life satisfaction of employed and unemployed people. Retirement is suitable for this study because, for the unemployed, retirement does not change the possibilities for shaping their everyday lives, but it does result in major changes to the system of social norms on the basis of which they evaluate their satisfaction. Unemployed people are expected to work - if possible - whereas this social expectation does not exist for pensioners. Therefore, if a strong increase in life satisfaction is observed when the unemployed retire compared to those who retire from employment, this would confirm the importance of social norms for life satisfaction.
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The German labour market is characterized by increasing wage inequality. The clearest sign of this development is the increase in low wages. Empirical studies investigate the significance of low wages for employment histories. The studies focus on the question of whether low-wage earners have better chances of finding regular employment in the future than the unemployed. These results are compared intertemporally and with other countries.
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In the recent past, there have been numerous legal interventions in the flexibility of the German labor market. These include, for example, changes to protection against dismissal. The dissertation examines the effect of a change in dismissal protection on labor market policy variables such as the level of unemployment. Panel data at micro and macro level are used for the empirical analysis.
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In diesem gemeinsamen Forschungsprojekt mit Mark Schopf (Universität Paderborn, Master-Absolvent der FWW) werden Aspekte des sogenannten „Grünen Paradoxons“ näher beleuchtet. Das Grüne Paradoxon beschreibt einen Effekt in der Umwelt- und Ressourcenökonomik, der von Hans-Werner Sinn (2009) so benannt und von ihm folgendermaßen beschrieben wird: „Wenn die Ressourceneigentümer erwarten, dass die grüne Politik im Laufe der Zeit immer grüner wird, wie es bislang der Fall war, dann wird die Rendite der im Boden belassenen Ressourcen verringert, und es entsteht ein Anreiz, diese Ressourcen möglichst schnell zu versilbern. Es kommt heute mehr CO2 in die Atmosphäre, die Erderwärmung beschleunigt sich. Das ist das grüne Paradoxon.“

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