Professorship of the Cluster of Excellence – Macroeconomics and Development (Prof. Dr. Nicola Fuchs-Schündeln)

The focus of the research of the chair of “Macroeconomics and Development” is on the analysis of the endogeny of economic and political preferences, as well as on the analysis of the labor supply behavior of households across the world.

Economists typically treat preferences as exogenous factors. The chair investigates whether and how individual experiences gathered in living under a particular economic or political regime influence individual preferences. The malleability of individual preferences is an important factor in the genesis of normative orders. Moreover, the chair investigates labor supply behavior of private households worldwide and traces implications for differences in welfare between rich and poor countries. These welfare differences influence the formation of normative orders and, on the other hand, the labor supply behavior is itself influenced in part by normative factors (especially in the case of women).

The chair investigates two broad topics, namely the formation of economic and political preferences and the labor supply behavior of private households. Regarding the first topic, a research project analyzed whether living under a democratic regime leads to increased support for democracy over time. The second topic is covered in different research projects. The broad research question is to document international differences in the labor supply behavior of private households and to analyze their causes and their consequences for measurements of differences in welfare.

Regarding the first topic, the research project showed that individual support for democracy does indeed increase the longer an individual has lived under a democratic regime, irrespective of the quality of the regime or other factors. Importantly, the study establishes a causal link, thus demonstrating that political preferences are endogenous and are influenced by individual experiences.

Regarding the second topic, based on a broad international data collection effort we document that individuals in poor countries work on average substantially more hours than individuals in rich countries. This implies that international differences in labor productivity and welfare are larger than previously thought. We also found that taxation plays an important role in driving the labor supply behavior of married women in Europe and the United States.

The most important publications of this professorship of the Cluster of Excellence:

Fuchs-Schündeln, Nicola & Alexander Blick: “Quantifying the Disincentive Effects of Joint Taxation on Married Women’s Labor Supply”, in: American Economic Review Papers & Proceedings, forthcoming, May 2017.

Fuchs-Schündeln, Nicola & Tarek Hassan: “Natural Experiments in Macroeconomics”, in: Taylor, John B. and Harald Uhlig (eds.): Handbook of Macroeconomics, Elsevier, Vol. 2a, 2016, pp. 923-1012.

Fuchs-Schündeln, Nicola & Paolo Masella: “Long-Lasting Effects of Socialist Education”, in: Review of Economics and Statistics, 98(3), 2016, pp. 428-441.

Fuchs-Schündeln, Nicola & Matthias Schündeln: “On the Endogeneity of Political Preferences: Evidence from Individual Experience with Democracy”, in: Science, 347(6226), 2015, pp. 1145-1148.

Fuchs-Schündeln, Nicola & Kevin Bartz: “The Role of Borders, Languages, and Currencies as Obstacles to Labor Market Integration”, in: European Economic Review, 56(6), 2012, pp. 1148-1163.


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