The determinants and labour market effects of lifelong learning

Despite the policy importance of lifelong learning, there is very little hard evidence from the UK on (a) who undertakes lifelong learning and why, and (b) the economic benefits of lifelong learning. This paper uses a rich longitudinal panel data set to look at key factors that determine whether someone undertakes lifelong learning and then models the effect of the different qualifications acquired via lifelong learning on individuals’ economic outcomes, namely wages and the likelihood of being employed. Those who left school with O-level qualifications or above were much more likely to undertake lifelong learning. Undertaking one episode of lifelong learning also increased the probability of undertaking more lifelong learning. We found little evidence of positive wage effects from lifelong learning. However, males who left school with only low-level qualifications do earn substantially more if they undertake a degree via lifelong learning. We also found important positive employment effects from lifelong learning.     

Rational Choice in Strategic Environments: Further Observations

This note clarifies some aspects of Bernheim's (1986) characterization of Nash and correlated equilibria.     

The liquidity of bank assets and banking stability

This paper shows that an increased liquidity of bank assets, paradoxically, increases banking instability and the externalities associated with banking failures. This is because even though higher asset liquidity directly benefits stability by encouraging banks to reduce the risks on their balance sheets and by facilitating the liquidation of assets in a crisis, it also makes crises less costly for banks. As a result, banks have an incentive to take on an amount of new risk that more than offsets the positive direct impact on stability.     

Do Lower Caseloads Improve the Performance of Public Employment Services? New Evidence from German Employment Offices

The caseworker‐to‐clients ratio is an important, but understudied, policy parameter that affects both the quality and cost of public employment services that help job seekers find employment. We exploit a large‐scale pilot by Germany's employment agency, which hired 490 additional caseworkers in 14 of its 779 offices. We find that lowering caseloads caused a decrease in the rate and duration of local unemployment as well as a higher re‐employment rate. Disentangling the mechanisms that contributed to this improvement, we find that offices with lowered caseloads increased monitoring and imposed more sanctions but also intensified search efforts and registered additional vacancies.     

Same Same But Different: Dialects and Trade

Language is a strong and robust determinant of international trade patterns: Countries sharing a common language trade significantly more with each other than countries using different languages, holding other factors constant. In this article we present the first analysis of the effect of language on trade in an intra‐national context. Analyzing unique data for a single‐language country, Germany, we find that similarities in the local dialect have a significantly positive impact on regional trade. We interpret this finding as evidence for the trade‐promoting effect of culture, because linguistic similarities likely reflect cultural ties across regions, rather than lower costs of communication or similar institutions.     

Subsidiarity in the European Union

Against the backdrop of the highly controversial debate on the future competences of the different European institutions, the principle of subsidiarity, a fundamental principle of European Union law, has recently met with renewed interest. The contributions to this Forum discuss a number of pertinent issues.

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*A longer version of this article is to be found in H. Tomann (ed.): Die Rolle der europ?ischen Institutionen in der Wirtschaftspolitik, Baden-Baden 2006, Nomos, pp. 59-76.