Reports (English)

Economic Determinants of Populism

DIW (2023), Roundup no. 145 / 2023, Berlin. [Roundup]
The rise of populism challenges numerous Western democracies and their institutions. In this round-up, we examine economic and societal conditions that are driving forces behind populism. We focus on five domains that are closely interlinked with populist support: globalization, financial crises, migration, inequality, and social mobility. Each domain offers unique insights into how societal shifts, economic disruptions, and perceived injustices can fuel anti-establishment sentiments. As these factors collectively shape the political landscape, understanding their interplay becomes crucial in devising strategies to sustain and strengthen the stability of democracies and institutions.

Chinese Loans to African Countries Differ from Western Development Loans

DIW (2023), Weekly Report no. 26: 353 - 361, Berlin. [Report] [German version]
Over the past 20 years, China has granted a conspicuous amount of loans to African countries. New loan data show that compared to Western multilateral loans, Chinese loans have relatively high interest rates and shorter maturities, tend to be highly collateralized, and are volatile over time. Thus, Western loans are generally more likely to be in the economic interest of the borrowing country. Furthermore, Chinese loans are focused on resource-rich countries that undertake fewer anti-corruption efforts, so local policymakers have more opportunities to feather their own nest. Finally, unlike Western loans, Chinese loans are not tied to any economic policy conditions. It seems worth considering for Western lenders to reduce the number and intensity of loan conditions to respect the sovereignty of the borrowing countries.

(Interview in German, June 2023)

Working from Home Facilitates Stock Ownership

DIW (2023), Weekly Report no. 13: 151 - 157, Berlin. [Report] [German version]
In 2020, there were simultaneous increases in the number of private persons participating on the stock market as well as in the number of employees working from home. Indeed, working from home is a robust determinant of stock ownership and partially explains the increase in 2020, with households without children benefiting the most in this manner. Furthermore, the effect of working from home on stock ownership is largest for low-income earners. Thus, working more from home has complex distributional consequences: It tends to expand the stock owner base by, in a broader sense, decreasing the stock market participation cost. While economic policy should not mandate working from home for the sole purpose of increasing stock ownership, it can facilitate stock market participation in other ways, such as by improving financial education.

(Interview in German, March 2023)

How Shocks Affect Stock Market Participation

DIW (2022), Roundup no. 142 / 2022, Berlin. [Roundup]
While there is a broad consensus in the literature that stock ownership is associated with individual characteristics, such as wealth, income, risk preferences, and financial literacy, less is known about the dynamics of stock market participation (SMP). Major fluctuations in SMP are oftentimes related to political events, economic shocks, and technological disruptions. We discuss the literature that investigates some of these shocks, as well as personal life circumstances that determine SMP across various demographic groups. Consolidating the literature allows us to identify systematic drivers into and out of stock ownership, along with its distributional consequences. Major forces behind SMP fluctuations are changes in participation costs and benefits, risk exposure, economic policy uncertainty, income uncertainty, peer effects, and windfall gains.

Providing Quality Early Childhood Education and Care: Results from the Starting Strong Survey 2018

OECD (2019), TALIS Report, OECD Publishing, Paris. [Report]For most children, early childhood education and care (ECEC) provides the first experience of life in a group away from their families. This experience plays a crucial role in children’s learning, development and well-being. The benefits of high-quality ECEC are not restricted to children’s first years of life. However, little is known about this first experience. What do children learn and do in ECEC settings? With which staff do children interact at their centres? Do all children face the same opportunities to enrol in high-quality settings? What are the main spending priorities to raise the quality of ECEC? These are key questions for parents, staff and policy makers. The OECD Starting Strong Teaching and Learning International Survey (TALIS Starting Strong) is the first international survey that focuses on the ECEC workforce. It offers an opportunity to learn about the characteristics of the workforce, the practices they use with children, their beliefs about children’s development and their views on the profession and on the sector. This first volume of findings, Providing Quality Early Childhood Education and Care, examines multiple factors that can affect the quality of ECEC and thereby can influence children’s learning, development and well-being.

Reports (German only)

Populismus: Warum es Grund zur Hoffnung gibt (Kommentar)

DIW (2023), Wochenbericht Nr. 44: 622, Berlin. [Kommentar]
Dass Populismus global auf dem Vormarsch ist, scheinen die Wahlen in Argentinien und der Schweiz jüngst zu bestätigen. Doch es gibt auch andere Tendenzen, die Hoffnung machen: In Polen hat sich die Wählerschaft mehrheitlich gegen die rechtspopulistische Regierungspartei PiS ausgesprochen. Wie ist der weltweite Vormarsch des Populismus zu erklären? Vor allem die ökonomischen Ursachen sind mittlerweile gut erforscht. Kennt man erstmal die Ursachen, kann man sie in der Regel bekämpfen.

© Lorenz Meister