Nicola Fuchs-Schundeln, Goethe University Frankfurt

“Forward-Looking Labor Supply Responses to Changes in Pension Wealth: Evidence from Germany”

Abstract

We provide new evidence of forward-looking labor supply responses to changes in pension wealth. We exploit a 2014 German reform that increased pension wealth for mothers by an average of 4.4% per child born before January 1, 1992. Using administrative data on the universe of working histories, we implement a difference-in-differences design comparing women who had their first child before versus after January 1, 1992. We document significant reductions in labor earnings, driven by intensive margin responses. Our estimates imply that, on average, an extra euro of pension wealth in a given period reduces unconditional labor earnings by 54 cents.

Nicola Fuchs-Schündeln is Professor of Macroeconomics and Development at Goethe University Frankfurt. Prior to joining Goethe University in 2009, she was an assistant professor at Harvard University. She received her PhD in economics from Yale University in 2004, and holds an honorary doctorate from Otto von Guericke University Magdeburg.

Nicola Fuchs-Schündeln is programme director of the macroeconomics and growth programme at the CEPR, chairwoman of the Review of Economic Studies, and elected fellow of the Econometric Society.

She received the 2018 Gottfried Wilhelm Leibniz Prize of the German Science Foundation, the highest scientific award in Germany, and the 2016 Gossen Prize of the German Economic Association. In 2018, she was also awarded an ERC Consolidator Grant, and in 2010 an ERC Starting Grant.
She is a member of the German National Academy of Sciences Leopoldina and of the Scientific Advisory Boards of the German Federal Ministry for Economic Affairs and Climate Action and the German Central Bank. She holds many affiliations in international research networks.

You can read more about Nicola Fuch-Schundeln here

CEBI contact: Søren Leth-Petersen