The overarching objective of the research performed at the Chair of Prof. Schöb is to produce concrete and scientifically sound policy recommendations based on theoretical and econometrical economic research. One of our main research areas is the analysis of the negative well-being effects of unemployment that cannot be attributed to the loss in income. Such non-monetary effects can be explained by the loss of identity utility resulting from the drop in social status and lower self-esteem.^[1],[2] We compare and study different unemployment effects on various well-being indicators within a standardized analytical framework. We find, e.g., that the unemployed, regarding their affective well-being, adapt well to being unemployed (hedonic adaptation), while their cognitive well-being – e.g. due to a loss of identity utility – continuously remains at a low level throughout unemployment.^[3] We also use the combined analysis of affective and cognitive well-being to study the effects of labor policy measures, such as workfare or wage subsidies, on the individual welfare^[4] and to reveal gender-specific differences in identity utility loss.^[5]

In closely related research projects we analyze the effects of unemployment on individual behavior and personality traits and depict the role of unemployment and job insecurity for the well-being effects of flexible employment forms, such as temporary employment and self-employment.^[6] The assessment of flexible labor markets further motivates the analysis of satisfaction effects of voluntary and involuntary job changes. ^[7],[8]

Another research topic is the development and evaluation of labor market and social policy instruments. After many years of studying wage subsidy systems to fight unemployment, the focus has now turned to the evaluation of minimum wages.^[9],10],[11] In view of the Europeanization of social policy, we research the optimal design of a European unemployment insurance.^[12]

Finally, our research includes general topics of public finance, with a strong emphasis on environmental issues. We show in how far an optimal fiscal policy should consider adaptation as well as the under- or overestimation of one’s own adaptability in the provision of public goods. We thereby tackle both positive and normative aspects. ^{[13],[14],[15]} As to climate change, we research the optimal climate policy in the context of potential offshoring (carbon leakage). In the field of resource economics, we examine the effects of climate policy on the supply decisions of resource owners, including learning effects, in the renewable energy sector.^[16]