Volume 68, Issue 2

The individual pay level is an emotionally discussed subject. Some pay differentials evince significant characteristics which are analysed in scientific literature. There are three significant pay gaps of particular significance to Germany: the gender pay gap between women and men of more than 20 percent, the regional pay gap especially between West and East Germany caused by differences in productivity and the pay gap between the private and public sector. This article investigates a previously unobserved pay gap within the public sector. By analysing a data collection, specific pay differentials in municipal administrations are determined. These differentials exist despite identical labour output in administration services in German municipalities and are caused by specific regional and economic determinants. So, the municipalities of East German Federal States and financially weak West German Federal States evince a pay level of municipal employees below average. Generally, there is a significant pay gap between East and West German municipalities. In addition, this article analyses the structure of the identified pay differences by separating the municipal employees according to their specific pay and qualification categories. As a result, East German municipalities have a smaller number of staff in the higher grade of the civil service and their pay level is below average. This effect is compensated by a higher number of staff in the middle grade of the civil service. The pay level of municipal employees in the middle grade of the civil service does not indicate significant difference among German municipalities. There are similar results in municipalities of financially weak West German Federal States. Despite identical administration services in municipalities, the pay level and pay structure evince interjurisdictional differentials. The results suggest that equal pay for equal work is not even in public service.

The discussion of climate policy received new impetus in the spring of 2019. Since then the topic has dominated the public discourse in Germany. The Fridays for Future movement continues to generate considerable pressure on policy makers. In addition, scientists emphasize in rare interdisciplinary unanimity both how urgent a radical renewal in climate policy would be, and that a uniform price for greenhouse gas emissions is the indispensable core element of the necessary reforms in Germany and Europe. One central aspect of climate policy is, however, often overlooked in all this: climate protection is essentially an international problem of cooperation. For climate change, it does not matter where greenhouse gases are emitted. The success of national climate policy must therefore be judged by whether it contributes to establishing international cooperation to reduce global greenhouse gas emissions.

A CO 2 price is a central instrument to enable and facilitate a comprehensive decarbonisation of the economy. It can be implemented by different instruments, particularly in the form of a CO 2 tax. It is important, however, that a CO 2 price alone – due to the manifold obstacles (including non-economic barriers) – cannot replace sectoral goals and instruments. Rather, it must be implemented as a complement to sector-specific climate protection instruments. The article provides information on how a CO 2 price can be shaped in a concrete and appropriate form.

The urgency of effective climate action measures and the practical experience in the context of the existing European Emissions Trading Scheme (ETS) are striking arguments for the introduction of uniform prices on CO ₂ emissions: as a minimum price in the ETS and as a reform of existing tax rates on fossil fuels (CO ₂ tax) for heating and transport (Non-ETS). In order for CO ₂ pricing not to become a mere instrument of rising government revenues, the options currently under consideration are the counter-financing of existing taxes and levies that reduces electricity prices or a per capita refund (climate bonus) for households. Both result initially in very similar distributional effects: the lower the household income, the higher the initial financial relief. Compared to the counter-financing of the EEG levy, climate bonuses are expected to have stronger rebound effects and the reduction of bureaucracy and promotion of the efficient use of renewable energy in heating and transport (sector coupling) would be waived. Thus a counter-financing, in particular the EEG levy in order to lower electricity costs, is a priority. In order to adequately address social hardships, only few socio-political accompanying measures would be needed that are largely independent of the pricing mechanism.

The code of craft regulation constitutes the legal base for craft and trade occupations in Germany. Resulting from a deregulation in 2004, the requirement to obtain a degree of higher occupational training, which used to be obligatory for founding a business, was dropped for about half of the occupations regulated by this code. While this deregulation has been frequently analyzed from a competition economics’ perspective, evidence regarding the information economics’ aspect of this deregulation is lacking. It is of particular relevance whether the deregulation fostered market failures due to “market-for-lemons” issues or, to the contrary, whether market-endogenous information instruments have emerged – a question located at the pivot of the economic discussion of the craft regulation. This study uses a qualitative research approach and analyzes 268 interviews with firms and customers on craft fairs to examine informational asymmetries on the market for craft services as well as market instruments for their compensation. We find evidence that strong informational asymmetries exist and are compensated by regional reputation building of firms. Further, we show that no formal informational mechanisms have emerged that could determine service quality ex ante. Based upon those results, suggestions for the further study of the informational properties of the craft market are presented.

The Fiscal Compact had seemed to be one of the lessons learned from the Euro crisis. It was supposed to ensure that member states follow more ambitious fiscal targets. First results however show that fiscal indicators have not substantially improved. Public debt is higher than at the beginning of the crisis and consolidation efforts were limited. The outook for European public debt and the stability of the Eurozone is thereby not promising.