Main Research Interests

Economics of Education  |  Economics of Labor Market  |  Economics of Innovation  |  Experimental Economics

Most Recent Research

Causal Evidence on the Intergenerational Transmission of Cognitive Skills

Weitergabe von Kompetenzen

Parents influence their kids in many ways. But which family features actually cause these intergenerational linkages? In their new working paper, Prof. Simon Wiederhold and his co-authors provide the first causal evidence on the transmission of cognitive skills within the family. They estimate how math and language skills of parents affect skills of their children in similar tests. To do so, they constructed a unique database linking comprehensive Dutch survey data of about 25,000 parents to administrative school data of about 40,000 children. For identification, they exploit within-family between-subject variation in cognitive skills; that is, they relate differences in a child’s skills between math and language to the parent’s difference in the same skills. They find that cognitive skills of parents strongly affect the skills of their children: a one-standard-deviation increase in parent skills increases the skills of children by 0.1 standard deviations. An additional IV estimation that isolates the part of parent skills that is developed at school yields similar results. Finally, the paper suggests that policies that improve school quality not only enhance the cognitive skills of the current generation but also have lasting impact on family outcomes through the transmission of higher skills to children. Thus, evaluations of school programs that ignore achievement spillovers on future generations will understate the full program impact.

Information and Assistance for Families Reduce Inequality in Child Care Attendance

Treatment Eccects of Information on Application and Enrollment

Benefits from attending early child care (0-2 years) are particularly large for children from disadvantaged families. However, these same children are less likely to participate in early child care programs – and little is known about the reasons behind this puzzling discrepancy. Prof. Simon Wiederhold and his co-authors Henning Hermes, Philipp Lergetporer, and Frauke Peter investigate potential demand-side reasons for the socioeconomic inequality in child care enrollment in a new working paper. Specifically, they ask whether providing families with information and application support for child care reduces the inequality in child care attendance. In a randomized control trial (RCT) in Germany with highly subsidized child care (n > 600), treated families receive application information and personal assistance for applications. For families with a lower socio-economic status (SES), the treatment increases child care application rates by 21 percentage points and enrollment rates by 16 percentage points. Higher-SES families are not affected by the treatment. Thus, alleviating behavioral barriers by simply providing information and assistance closes half of the SES gap in early child care enrollment.

Mentoring Improves Equality of Opportunity

Rock Your Life - Effect of Mentoring on Labor-Market Prospects

One can’t choose one’s family – and yet family background has a huge impact on educational success and labor-market opportunities, particularly in Germany. While many traditional programs for adolescents to combat inequality of opportunity have shown little success, mentoring programs that provide disadvantaged youths with personal support from mentors may stand a better chance to succeed. Conducting a nationwide field experiment, the results of which were published in a recent study, Simon Wiederhold and his co-authors Sven Resnjanskij, Ludger Woessmann (both ifo Institute) and Jens Ruhose (University of Kiel) provide the first empirical evidence of large positive effects of mentoring on the labor-market prospects of highly disadvantaged adolescents. After one year, participation in the studied mentoring program “Rock Your Life!” significantly improves the labor-market prospects of adolescents from highly disadvantaged family backgrounds. In particular, the program has positive effects on academic performance – for example, on math grades – and on aspects such as patience and social skills, which are also important for future labor-market success. In addition, the adolescents’ focus on a good and realistic professional future increases significantly through program participation. For the highly disadvantaged youth, the expected income gain from program participation exceeds the costs of the program to a sizeable extent. In contrast, the program has no positive effects for youths from more favorable family backgrounds. The results thus suggest that the mentors succeed in supplementing parental support where it is particularly needed.

Bad Economic Conditions at the End of High School Have Positive Long-Term Effects

Effekt ökonomischer Bedingungen am Ende der Schulzeit auf späteren Kompetenzerwerb

A new study by Simon Wiederhold, together with Marc Piopiunik und Franziska Hampf (both ifo Institute), investigates the effects of economic conditions at high-school graduation on further educational decisions and labor-market outcomes. The analysis is based on international data for 28 OECD countries. The authors find that bad economic conditions at high-school graduation increase college enrollment and graduation, which has a long-term positive impact on individuals’ cognitive skills and labor-market success. Outcomes are affected only by the economic conditions at high-school graduation, but not by those during earlier or later years. This finding suggests that there is a considerable number of academically marginal students who do not plan their educational careers well in advance, but react to short-term economic conditions. Moreover, recessions at high-school graduation narrow the long-run gender gaps in numeracy skills and labor-market success, as women's educational and labor-market decisions are particularly responsive to the economic situation at the end of formal schooling.

Do Digital Skills Pay off on the Labor Market?

Bild digitale Kompetenzen am Arbeitsmarkt

Despite the general conviction that skills in the mastery of information and communication technologies (ICT) pay off in the workplace, there is little robust evidence to support this. In a new study, Simon Wiederhold, together with Oliver Falck (ifo Institute) and Alexandra Heimisch-Roecker (acatech), shows that higher ICT skills as measured in the “Adult PISA” do indeed lead to higher wages in the labor market. For the analysis, they use the fact that, regardless of their other skills, people in some areas of Germany have more ICT skills due to the increased availability of broadband Internet. The study  is forthcoming in Research Policy, the leading journal in the field of innovation economics.

Migrants' Occupational Skills

Bild zu den beruflichen Fähigkeiten von Migranten

How do migrants differ from the population that remains in their country of origin? A new paper by Simon Wiederhold, together with Alexander Patt (formerly KU Eichstätt-Ingolstadt), Jens Ruhose (University of Kiel) and Miguel Flores (ITESM), addresses this question for the case of Mexicans migrating to the US. They find that the migrant Mexicans have better manual skills but lower cognitive skills than those who remain in Mexico. These results can be explained by the fact that the economic returns to manual skills for Mexicans are higher in the US than in Mexico; the opposite holds for cognitive skills. The selection of migrants is much better described by their occupational skills than by their formal education level or income. The paper was published in the renowned Journal of the European Economic Association. The paper was also awarded the prestigious CESifo Young Affiliate Award.

Skilled Teachers Important for Student Performance

Bild Kompetente Lehrkräfte für Schülerleistungen

The cognitive skills of teachers are an important determinant of international differences in student performance. This is the conclusion reached by Simon Wiederhold together with Eric A. Hanushek (Stanford University) and Marc Piopiunik (ifo Institute) in a study in which they combine math and reading skills of teachers in more than 30 countries from the PIAAC study with individual student data from the PISA test. The paper has just been published in the Journal of Human Resources, the leading journal in education economics.

The Cognitive Skills of Teachers and the Tragedy of African Education

Bild Lehrerkompetenzen und die afrikanische Bildungstragödie

Despite attending school for years, most pupils in Sub-Sahara are still learning remarkably little in school. Are there any possibilities to change this? Together with his co-authors Marc Piopiunik (ifo Institute) and Jan Bietenbeck (Lund University), Simon Wiederhold shows that better knowledge of teachers improves the performance of students, especially if textbooks are available in class. The paper has been published in the prestigious Journal of Human Resources.

Public Procurement Influences Innovativeness of the Economy

Bild Staatliche Beschaffung und Innovationskraft

Governments purchase everything from airplanes to zucchini. Does the technological content of government procurement play a role for innovation in the private sector? In a recent study, Simon Wiederhold and Viktor Slavtchev (IWH Halle) show that governments buying more high-tech products induce higher research and development spending in the private sector. This effect appears even without an increase in total procurement spending. To reach this conclusion, they make use of microeconometric methods on extensive data of US states.The paper has been published in the American Economic Journal: Macroeconomics, one of the leading journals in macroeconomics.

Returns to Skills on the Labor Market

Bild Erträge von Kompetenzen am Arbeitsmarkt

Not only the economy at large, but also individuals benefit from improved educational achievement. To show this, Simon Wiederhold and his co-authors Eric Hanushek (Stanford University), Guido Schwerdt (University of Konstanz), and Ludger Woessmann (ifo Institute) use data from the PIAAC adult achievement test. In their study, published in the European Economic Review, they find that higher skills pay off on the labor markets of all 23 participating countries: an increase by one (out of five) skill levels is associated with 18 percent higher earnings on average. Countries with the highest returns to skills are the United States, Ireland, and Germany.