Third-party funding

Joscha Beckmann, Robinson Kruse‐Becher (both FernUni Hagen) and Robert Czudaj (TU Freiberg) have jointly submitted an application for third-party funding to the internationally refereed journal Energy Economics.

The academic literature on the relationship between exchange rates and oil prices attracts great interest from policymakers. The relevant literature is very comprehensive and covers a variety of data, methods and models.

The project has two goals: On the one hand, the project provides rich information that allows researchers to identify relevant data sources and econometric methods for estimations which contribute to understanding the relationship between exchange rates and oil prices. This part of the project will reflect the current state of the broader literature. The second part of the project will provide new datasets based on news coverage on oil and foreign exchange markets. The idea is to allow practitioners and researchers to recognize the intensity and nature of the news coverage that relates to both markets. Such information is useful for both researchers and practitioners, given that reporting has the potential to influence expectations and provide future signals about price movements.

The share of funding at the FernUniversität amounts to 35,000 euros.

The question of how education changes individual productivity in the labor market remains a key and classic question in economic research. Matthias Westphal explores it in an ongoing DFG project [Link] (together with Anna Krumme) by going beyond whether education has effects. The specific focus is on the choices of different tracks in the German educational system, the role of university education in shaping returns to high school education, and the evolution of monetary returns to education after entering the labor market to learn about the underlying causes of monetary returns to education.

For this endeavor, a purpose-built data set on track-specific school openings in Germany is assembled to instrument educational choices to assess track-specific returns to education in Germany. By combining survey data with high-quality administrative data on individual earnings trajectories, the project can assess the evolution of the unobserved heterogeneity in the returns to high school education after entering the labor market. This analysis allows an understanding of whether educational returns are primarily driven by human capital or the signaling model – the two workhorse models in education economics. Finally, a causal mediation analysis will be conducted that decomposes the return to academic track education into a specific component caused by university education.

Hence, this project's contribution is threefold. The first is identifying returns to secondary schooling, which is scarce beyond the compulsory level. The second is assessing and interpreting the evolution of unobserved heterogeneity after labor market entry and possible novel insights into human capital or the signaling model through employer learning. The third is to separate the specific returns for high school from university education, which has not been done before.

The share of funding at the FernUniversität amounts to 68.252 euros (the project started at the TU Dortmund University).

In an ongoing DFG-funded research project [Link] with Hendrik Schmitz from the RWI in Essen, Matthias Westphal assesses the determinants of cognitive abilities, health, and mortality at older ages. This project builds on and extends an earlier one (entitled “Socio-economic determinants of cognitive decline in older ages”) by focusing on health and mortality using administrative and biomedical data.

This project aims to extend our understanding of old-age cognitive decline, particularly whether and to which extent the decline is malleable through individual decisions such as education, unemployment, and retirement.

The focus is on dynamic treatment effects, the moderating role of genetic predisposition, and how retirement behavior mediates the effects of education on cognitive decline. As all these issues are complicated when treatment effects are heterogeneous, the project aims to develop and extend specific estimators to reach our conclusions.

Hence, this project's contribution is the combination of novel data and cutting-edge estimation techniques to learn about the mechanisms of cognitive decline.

The share of funding at the FernUniversität amounts to 197.635 euros.