Publications

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Does the provision of after-school care promote maternal employment and thus help to foster gender equality in labor supply? We address this question by exploiting variation in cantonal (state) regulations of after-school care provision in Switzerland. To establish exogeneity of cantonal regulations with respect to employment opportunities and preferences of the population, we restrict our analysis to confined regions along cantonal borders. While no impact of the after-school care provision on parental employment exists overall, we find a positive impact on the full-time employment of mothers.

We use German panel data to examine how fixed-term employment affects utility derived from working. In contrast to previous research, we present evidence that working on a temporary contract lowers current job satisfaction. We discover that the honeymoon effect of a new job must be considered to reveal this result. Job insecurity appears to be the source of dissatisfaction associated with fixed-term employment. We also consider regional unemployment and perceived employment security to shed light on the basic notion of flexicurity policies. Finally, we apply a life course perspective on employment careers to discuss the overall role of temporary employment for individual job satisfaction.

We study the out-of-sample performance of portfolio trading strategies used when an investor faces capital gain taxation and proportional transaction costs. Overlaying simple tax trading heuristics on trading strategies improves out-of-sample performance. For medium to large transaction costs, no trading strategy can outperform a 1/N trading strategy augmented with a tax heuristic, not even the most tax and transaction cost-efficient buy-and-hold strategy. Overall, the best strategy is 1/N augmented with a heuristic that allows for a fixed deviation in absolute portfolio weights. Our results thus show that the best trading strategies balance diversification considerations and tax considerations.

In this article, we introduce a new method of forecasting large-dimensional covariance matrices by exploiting the theoretical and empirical potential of mixing forecasts derived from different information sets. The main theoretical contribution of the article is to find the conditions under which a mixed approach (MA) provides a smaller mean squared forecast error than a standard one. The conditions are general and do not rely on distributional assumptions of the forecasting errors or on any particular model specification. The empirical contribution of the article regards a comprehensive comparative exercise of the new approach against standard ones when forecasting the covariance matrix of a portfolio of thirty stocks. The implemented MA uses volatility forecasts computed from high-frequency-based models and correlation forecasts using realized-volatility-adjusted dynamic conditional correlation models. The MA always outperforms the standard methods computed from daily returns and performs equally well to the ones using high-frequency-based specifications, however at a lower computational cost.

Sometimes experimentalists draw far-reaching policy conclusions from their findings. However, this is dangerous if there is ambiguity with respect to the right interpretation of the results. A good example for this danger is the well-known study by Falk and Szech (Science, 2013), who conclude that “markets erode moral values”. If this were true, economists, who have emphasized the efficiency enhancing effects of markets for centuries, would have to reconsider their judgments fundamentally. In this note we demonstrate that the claim made by Falk and Szech is unfounded for at least four reasons and that their experimental results can be (and should be) interpreted, if anything, in the opposite way.

Background
As teacher training plays a major role in the development of (prospective) teachers’ knowledge, differences between the professional knowledge of prospective teachers at Austrian and German universities were examined in the current study. The teacher training systems of business and economic education in both countries differ substantially regarding structure and content. The German system consists of two consecutive phases with different foci (university education with an emphasis on theories and domain-specific knowledge, followed by school-based practical training with the objective of acquiring practical experience). Thus, in Germany, opportunities to learn (OTL) mainly cover domain-specific knowledge with less focus on didactics and teaching experience. In contrast, Austrian universities offer an integrated approach that combines the two phases (i.e., theoretical input and practical teaching experiences are closely linked) at the university level.

Methods
A paper-and-pencil test was used to measure content knowledge (CK) and pedagogical content knowledge (PCK) in the domain of accounting of prospective teachers in Germany and Austria. The total sample consists of n = 1,401 prospective teachers from German and Austrian universities. Taking the structural differences in teacher education into account, differences in CK and PCK between German and Austrian prospective teachers were expected.

Results and conclusions
Accordingly, the results show that the Austrian sample outperformed the German one. In addition, for both the German and the Austrian sample, university-based OTL in accounting had a crucial impact on the CK score. Concerning PCK, however, the situation is different: none of the university-based OTL had an impact on Austrian prospective teachers’ PCK, and only small effects were found for the German sample. Possible reasons for the unexpected findings are discussed.

This empirical study investigates whether people's concerns about the Euro currency affect their life satisfaction. A minority of very concerned individuals appear to be unhappy, which cannot be explained by personality or other observable factors typically affecting well-being. As a novelty, this investigation exploits exogenous variation in reported concerns by using the intensity of media coverage on the euro crisis with its extraordinary events throughout the year 2011 as an instrument. Results from the application of several empirical approaches confirm that there is an effect from being concerned about the euro on people's satisfaction with life. A potential explanation is that political beliefs and euro-skeptic attitudes are at play and may trigger unhappiness as a consequence of a perceived lack of representation in German politics. In line with this argument, a regional analysis links the variation in unhappiness among concerned citizens to the actual votes for Germany's first major anti-euro party in the subsequent federal elections.

Background
Descriptive accounts of instruction in German vocational schools consistently indicate whole-class dialogue to be prevalent. We aim to extend previous research by elucidating pedagogically valuable dialogic practices that facilitate conceptual understanding, and by empirically investigating factors that promote or hinder student engagement in these practices. We focus on prior knowledge in the domain discussed, because knowledge differences count among the prime sources of heterogeneity among vocational students in Germany. However, with survey studies suggesting a decisive role of communication apprehension, we also intend to explore if feelings of uncertainty in ongoing verbal interactions moderate the knowledge–engagement relationship, while controlling for potential confounding and competing influences.

Methods
The study employs a longitudinal, multi-method design. It combines video recordings of nine consecutive lessons about Economic Business Processes in two classes, preceding tests on intellectual abilities and economic literacy, questionnaire reports of teacher–student relations and instructional clarity, and Continuous State Sampling during instructional activities. Interactional features were classified by applying a fine-grained category system that distinguishes coordinating gestures as well as types and qualities of dialogic exchanges.

Results and discussion
Hierarchical regression analyses provide some evidence that getting opportunities to engage in valuable components of classroom dialogue depend on domain-specific prior knowledge. Differential teacher treatment exists in cold calling strategies and demanding follow-up techniques, even after controlling for students’ gender. Moderated regressions for effects of prior knowledge and situational uncertainty on students’ communicative behaviours indicate that advanced knowledge structures do not affect the mere quantity of a student’s verbal contributions. But they robustly predict the degree of elaboration in given answers, together with positive teacher–student-relations, and net of the influences of student gender and instructional clarity. Feelings of uncertainty neither keep students from participating in classroom dialogue nor impair the quality of their contributions.

Conclusions
Results suggest that domain-specific prior knowledge is not an indispensable prerequisite to contribute ‘somehow’ to classroom dialogue. However, it is a decisive factor for participation and involvement in those dialogic practices that promote cognitive elaboration. Thus, when researching Matthew effects, differences concerning student engagement in pedagogically valuable features of classroom dialogue might aid in identifying how instructional communication enhances or reduces differences in learning gains.

This paper analyzes the short- and long-run consequences of a natural disaster on children׳s education and health. The particular focus lies on variation in idiosyncratic shocks to households using housing damages caused by a super typhoon as a proxy. Relying on individual panel data and a setting in which typhoons are a relatively rare event, we find negative and persistent effects on children׳s education but no effects on children׳s health. Effects on education are likely driven by a shift in parental investments made to cope with the economic consequences of typhoon damages. Subgroup analysis suggests that results are stronger for girls, children with no older siblings, children from poor families, and families with no strong family or social network.

Teacher competence is crucial for quality of teaching and learner achievement. Competency models and competence measurement are prevalent in domains such as the natural sciences and lacking in others. We conducted our research in the field of business and economics education by focusing on the accounting domain because it is key to a deep understanding of the economic context and the development of economics competence. To teach well, teachers require professional knowledge, which is mainly composed of content knowledge (CK), pedagogical content knowledge (PCK), and pedagogical knowledge (PK). Our competence model comprises the cognitive component of professional knowledge and the noncognitive components of beliefs, self-efficacy, and self-regulation. To measure competence in competence of prospective teachers, we employed novel instruments to test for professional knowledge and beliefs as well as established ones to test for self-regulation and self-efficacy. The sample consists of 1,152 students at 24 German universities. The structure of the competence model was tested. Results suggest that professional competence in accounting has at least four distinct dimensions (CK, PCK, beliefs, and self-regulation aspects).

Purpose – The purpose of this paper is to consider the influence of individual risk preferences on the effectiveness of incentive pay schemes, by examining the link between individual effort and risk aversion in situations where outcome uncertainty multiplies with effort. Such “multiplicative noise” situations are common, occurring whenever payment is awarded per success rather than per attempt.

Design/methodology/approach – The paper develops a theoretical model which predicts a negative risk aversion-effort link under multiplicative noise without a performance target (PT), and a weaker negative link once the target is introduced. This model is then taken to the data from a lab experiment where participants were randomly assigned to a control group, which received fixed pay, and a treatment group, which received a piece rate awarded with a certain probability, with and without a PT. Risk aversion is measured with a menu of lottery choices offered at the end of the experiment.

Findings – Compared to their peers in the control group, the more risk-averse participants in the treatment group put in progressively less effort in the absence of a PT. The introduction of a PT substantially weakens this negative risk aversion-effort link, so that there are no more significant differences in performance between the more and the less risk averse.

Research limitations/implications – The paper’s findings speak to the empirical puzzles of incentive pay schemes backfiring and of the proliferation of PTs. The negative risk aversion-effort link may be one reason behind the failure of incentive schemes to deliver improved performance, whereas the weakening of this link may be one justification for the existence of PTs.

Practical implications – In the multiplicative noise environments, managers should take their workers’ risk preferences into account when designing incentive pay schemes. A PT may be a useful motivational tool for the risk-averse workers who are more likely to under-perform.

Originality/value – The multiplicative noise environment has been largely overlooked by the existing literature, yet it is common in practice. An example is the work of a sales agent who receives a bonus per sales which succeeds with a certain probability after each customer contact. This paper is one of the first to model, and test experimentally, worker performance in this environment.