Editorial: Promising new scientific researchers at RWI Essen. Second-generation immigrants are often scarcely integrated into German society

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1 Editorial: Promising new scientific researchers at RWI Essen RWI : News Second-generation immigrants are often scarcely integrated into German society Opening ceremony of the Ruhr Graduate School Workshop The Significance of Networks in Enterprise Start-Ups by Women Project AquaSus Final workshop Second Energy Day in Bochum: CO 2 and Climate Protection: Interactions and Reduction Possibilities New publications: RWI: Discussion Papers; RWI: Materialien; RWI: Mitteilungen. Quarterly Interna: Following the traces of industrial culture No. 4/2004 RWI ESSEN

2 2 RWI : News 4/2004 Promising new scientific researchers at RWI Essen At the beginning of October, the RWI Essen increased in numbers: The eight scholarship holders from the first year of the Ruhr Graduate School in Economics (RGS Econ) have obtained jobs in the Institute. Their structured PhD program, which relates to the Anglo-Saxon standards of excellence, will last for three years. They will be at RWI Essen for the first year. The period leading to the official opening ceremony of the Ruhr Graduate School on September 20 (for more information on the opening ceremony, please refer to page 4) was not always easy. However, the result shows that it was worth the effort. The RGS Econ is, in its form as a joint initiative of three universities (Bochum, Dortmund and Duisburg-Essen) and an external research institute (the RWI Essen), so far unique. It is real progress in the regional location competition as it interlocks different research institutions with each other. It combines research on a regional level with international research demands. Therefore, the regional government of North Rhine- Westphalia (NRW) financially supports it, and it is the first NRW Graduate School outside of the sciences. A substantial amount of resources also stems from private partners, in particular, Alfried Krupp von Bohlen and Halbach-Stiftung and the Projekt Ruhr GmbH. For the future, I am confident that the local economy will also participate in the financing of the Ruhr Graduate School. Together, we can succeed in developing the competitive ability of the region. Finally, I warmly welcome the Krupp scholarship holders from the Ruhr Graduate School once more to the Institute. We will accompany you on your way through the PhD program with great expectations, certainly sometimes critical, but always supporting. Christoph M. Schmidt From the research Second-generation immigrants are often scarcely integrated into German society A current study of the RWI Essen shows that second-generation immigrants are scarcely rooted in Germany and tend to have a pessimistic, fatalistic and self-doubting view to life, although they, for example, in their leisure-time activities, tend to resemble native Germans more than their parents generation. However, ethnic German immigrants, for example, late repatriates, have a more optimistic attitude towards their future. A study from Michael Fertig, based on data from the 1999 wave of The Socio-Economic Panel (SOEP), reveals that second-generation immigrants in Germany have not integrated well into German society, and fatalism, pessimism and self-doubt often determine their attitude to life. The study compares the attitudes of ethnic Ger-

3 RWI : News 4/ man immigrants (German citizenship, not born in Germany, arrived in Germany after 1990), first-generation (foreign) immigrants (without German citizenship, not born in Germany, mainly guest workers) and their children, the so-called second-generation (foreign) immigrants (without German citizenship, born in Germany, mainly descendants from guest workers) to the attitudes of respondents possessing the German citizenship who were born in Germany. Questions on leisure-time activities (e.g. visits to cultural events, sports, church attendance), attitudes (e.g. towards influence of political decisions, religion, career success) and immigrant specific questions (e.g. connection to their origin country, language skills, feelings of acceptance) examined the societal integration of the immigrant groups living in Germany. A multivariate analysis, which controls for observed heterogeneity between respondents, was used to prevent distorted results. Partially large differences between the groups A closer examination of the results reveals that ethnic German immigrants and Germans born in Germany tend to behave similarly to each other in terms of their leisure-time activities. The religious activities of the ethnic German immigrants are solely more distinctive. In contrast, there are significant differences evident between foreign immigrants and Germans. For example, foreign immigrants participate considerably less often than Germans in cultural events. Here, the difference between the second generation and Germans is smaller than that of the first generation. In addition, the differences between the second generation and the German comparison group are substantially larger than the differences between ethnic German immigrants and Germans. If one compares ethnic German immigrants with foreign immigrants of the second generation, large differences are also noticeable. The ethnic German immigrants often speak German at home, they feel more German and show the least connection to their native country. In contrast, the descendants of the guest workers speak less often German at home and they have a greater connection to their native country. Moreover, many of them perceive their lives as less self-determined and their prospects in life as determined by faith or luck rather than by their own endeavours. According to the study, the second-generation of immigrants is a deeply unsettled population group, which is plagued by self-doubts and a rather fatalistic and pessimistic view on life. It is yet to be examined to what extent this negative attitude is connected with the second-generation immigrant group s performance on the German labour market. Without a doubt, the gloomy orientation of the young generation of foreign immigrants should not be ignored. Otherwise, according to the assessment of the study, there is a risk of losing a sizeable fraction of around 1.5 million people as content and productive members of the future society. Michael Fertig,The Societal Integration of Immigrants in Germany. RWI : Discussion Papers 18. RWI, Essen. RWI ESSEN Michael Fertig No. 18 RWI : Discussion Papers

4 4 RWI : News 4/2004 Opening ceremony of the Ruhr Graduate School The Ruhr Graduate School in Economics (RGS Econ) opened with a small ceremony on September 20, The goal of the joint initiative of the Universities of Bochum, Dortmund and Duisburg-Essen and the RWI Essen is to strengthen the research and doctorate training in the region. Through the cooperation of university professors from different universities and an external economic research institute, the RGS Econ is a post-graduate initiative with a module basis. The doctorate program prepares the students for a PhD in economics, which meets international standards of excellence. The main emphasis of the research program is on additional affects and consequences of demographic change. RGS Econ is so far a unique initiative At the beginning of the opening ceremony, RWI president Prof. Dr. Christoph M. Schmidt welcomed the approx. 80 guests from politics and business. He emphasized that the RGS Econ is based on three pillars: good ideas and innovative concepts, political support as well as private financial support for the first doctoral candidates from Alfried Krupp von Bohlen and Halbach-Stiftung. The RGS Econ is so far unique in its form as a collaboration of three universities and an external research institute. Moreover, it is the first NRW Graduate School in the field of economics and one from only a total of seven NRW Graduate Schools. Professor Schmidt expressed special gratitude to the private sponsors, in particularly Alfried Krupp von Bohlen and Halbach-Stiftung and the Projekt Ruhr GmbH, as well as the North Rhine- Westphalia government. He emphasized that the RGS Econ was only possible through the united efforts of private and public sponsors. Signing the cooperation contract Prof. Dr. Jörg Winter, Ruhr-Universität Bochum; Prof. Dr. Eberhard Becker, Universität Dortmund; Prof. Dr.-Ing. Klaus Solbach, Universität Duisburg-Essen; Prof. Dr. Christoph M. Schmidt Ph.D., RWI Essen (sitting) A welcoming speech from Prof. Dr. Eberhard Becker, Rector of the University of Dortmund and representative of the principals of the universities involved, followed. Representatives of the institutions involved signed a cooperation agreement, which regulated organization, doctoral candidate education and financing of the RGS Econ. The following official opening speech was held by Hannelore Kraft MP from the Department of Science and Research for North Rhine-Westphalia in the presence of RGS-Student Annika Frohloff and Chairman of the Board of Trustees of the Alfried Krupp von Bohlen and Halbach-Stiftung, Professor Dr. h.c. mult. Berthold Beitz, discover the RGS-sign

5 RWI : News 4/ The Ruhr Graduate School uncovered the panel, which will include the RGS Econ on the façade of the RWI Essen in the future. A small champagne reception followed in the foyer of the RWI Essen. In addition, those interested could visit the premises of the RGS Econ. On October 1, the first eight pupils began their post-graduate program in the RGS Econ. The graduates from German, English and Dutch universities will spend their first year together with RWI Essen and conclude their PhD within three years. Information: Hannelore Kraft, MP from the Department of Science and Research for North Rhine-Westphalia, during her speech the Chairman of the Board of Trustees of the Alfried Krupp von Bohlen and Halbach-Stiftung, Professor Dr. h.c. mult. Berthold Beitz. As a symbolic act, Professor Beitz and a scholarship holder from Students of RGS Econ Photos: Philipp Gallon Lectures and conferences Workshop The Significance of Networks in Enterprise Start-Ups by Women The workshop The Significance of Networks in Enterprise Start-Ups by Women in the Federal Ministry of Business and Labour (BMWA) has undertaken a study based on the theme of female entrepreneur networks. Women used the study primarily to exchange experiences. However, the networks themselves remain insufficiently networked to other consultancy facilities and scientific institutions. An action recommendation of the workshop was therefore a stronger cooperation of the enterprise start-up scene. Through this channel, the offers of single networks could be improved and made even more attractive for their members. What significance do networks have in enterprise start-ups by women? The workshop, which the RWI Essen and the

6 6 RWI : News 4/2004 Sozialforschungsstelle Dortmund (sfs) organized in the Federal Ministry of Business and Labour (BMWA) in Berlin on October 4, 2004, examined this question. The basis of the workshop was the results of the study, which the BMWA promoted, Networks and Launching of Enterprises by Women from Friederike Welter (RWI Essen), Ursula Ammon (SFS) and Lutz Trettin (RWI Essen; also published in RWI: Schriften 76). Participants in the workshops were representatives from networks, institutions and organisations, research institutions (among others, Institut für Mittelstandsforschung Bonn, FH Stralsund), Ministries (BMWA, BMBF) and promoters of economic development. First, Dr. PD Friederike Welter introduced the theoretical perspectives of the study. The aim was the analysis of typical networks for women interested in enterprise start-ups, female launchers of enterprises and young female entrepreneurs. Moreover, strengths and weaknesses in organization, management, structure and the location were examined, as well as the consideration of success factors and obstacles in an international comparison (USA, the Netherlands, Austria, UK). In addition, the researchers considered how female launchers of enterprises and female entrepreneurs used the networks, as well as how they assessed the networks. Using these aspects, business recommendations and policies were developed for network participants. Among other things, the study contained a network analysis, regional case studies, as well as an on-line questionnaire. Verband selbständiger Frauen, Connecta Das Frauennetzwerk, BJU Bundesverband Junger Unternehmer der ASU, Weiberwirtschaft, Frauenwirtschaftswunder Tübingen, webgrrls, querdenken Das Gründernetzwerk) were presented. The examples made clear that networks appear, primarily, in densely populated areas, there are generally fewer female entrepreneurs in older networks and virtual and mixed-sex networks have the most members. Moreover, structural-related, process-related and people-related strengths and weaknesses were analysed. Noticeably, it was found that networks are often supported by the individual commitment of separate individuals. Using the results of the on-line questionnaires from 264 women (245 businesswomen, 8 women currently launching an enterprise, 11 women with interest in launching an enterprise) as a basis, Ursula Ammon presented the networks from the perspective of the users. Among other things, the reasons for the networking, the user behaviour also with regard to the life cycle of the enterprise (interested in launching an enterprise or already self-employed) were signified, as well as the significance of the network for the launching and development of the enterprise. As the most frequent motivators for the networking, the factors mutual advice (76.5%) as well as special advice (54.2%) were indicated. The networks had the most significance for the interviewees by getting through difficult phases (37.1%) as well as by opening of new branches of business (31.4 %). Networks help primarily with advice and in crises In the second part, the results of case studies from eight different, nationally aimed networks (Verband mitteldeutscher Unternehmerinnen, Schöne Aussichten Interlinking networking should be further developed Dr. Lutz Trettin presented regional case studies for the networking in the regions of Mecklenburg-Vorpommern, Munich and the eastern Ruhr district. Here, it appeared

7 RWI : News 4/ Dilemma: Vicious circle of the network effort problem: financial and personal resources only few members result: limited supply problem: attractivity for new members In conclusion, Dr. PD Friederike Welter presented conclusions and business recommendations. Among other things, she advised the existing networks towards a stronger networking with each other, as well as with traditional consultancy facilities and research institutions. This would be a good opportunity to break the vicious circle of the network effort from reduced financial resources, limited offers and few members. that networks in the considered regions mostly derive from urban centres and often develop through personal contacts to experts/leaders of public institutions. Hereby, the cooperation possibilities between universities, on the one hand, and networks of entrepreneurs, as well as close supporting networks on the other hand, are far from exhausted. This factor is even more surprising, considering that primarily graduates are active in entrepreneur networks. The connections between long-standing existing nationwide female/businesswomen organizations, on the one hand, and entrepreneur networks, as well as close-standing supporting networks, on the other hand, are still partially weak. In addition, there is often a lack of contact with financial institutions. Friederike Welter, Ursula Ammon and Lutz Trettin, Networks and Launching of Enterprises by Women, RWI : Schriften, 76. RWI, Essen. Information: Lutz.Trettin@ rwi-essen.de RWI ESSEN Friederike Welter, Ursula Ammon und Lutz Trettin asdfghjk Heft 76 Duncker & Humblot Berlin RWI : Schriften Aqua us Final workshop Influencing Factors and Needs for Action on Innovations towards Sustainability Opportunities for and Limits to Sustainable Water Management, was the subject of the project AquaSus. This was also the title of the final workshop from the Federal Ministry of Education and Research s (BMBF) sponsored two-year research plan. Approximately 50 experts from science and the business world used this opportunity to participate in a final experience exchange. In four sessions, the main

8 8 RWI : News 4/2004 Participants at Aquasus-Final Workshop (from left): Dr. jur. Peter Nisipeanu and Prof. Dr.-Ing. Harro Bode, Ruhrverband Essen; Dr. Harald Tauchmann, RWI Essen subjects were system innovations in water management, the role of competition, general conditions for lasting innovations, as well as practical challenges in connecting demands and reality. for the theoretical perspective. For the empirical perspective, the determining factors of the innovative behaviour of water supply and waste water disposal were analysed based on two firm questionnaires. Finally, it was examined in the case study Media-Related Environmental Policy in Waste Water Disposal, whether German environmental law will hinder the frequent meaningful connection between waste water disposal and biological waste disposal. Apart from RWI Essen, other participants in the project AquaSus were the Gesellschaft für Arbeits-, Reorganisationsund ökologische Wirtschaftsberatung, Duisburg (Aröw), the Institut für angewandte Innovationsforschung, Bochum (iai), the Recherche Développement International, Le Creusot (RDI), the Ruhrverband Essen, as well as Prof. Dr.-Ing. Stein & Partner, Bochum. The project AquaSus examined innovations in the water management from a theoretical as well as an empirical perspective. An institutional economical model of the origin of lasting innovations was developed Information: Further information about the project AquaSus can be found on the project homepage or by writing to Harald.Tauchmann@rwi-essen.de Second Energy Day in Bochum at the Ruhr University: CO 2 and Climate Protection: Interactions and Reduction Possibilities Carbon dioxide (CO 2 ) is not the true cause for changes in the world climate. The climate protection debate follows more the up-to-date approach than compelling scientific knowledge. This provocative thesis from Professor Dr. mult. Ján Veizer from Bochum, who is a sediment and environment geologist, formed the discussion-worthy prelude to the Second Energy Day in Bochum. During this day, the Chair (represented through the Ruhr University Bochum in cooperation with the Energieforschung Ruhr (ef.ruhr) GmbH and the RWI Essen) presented results of the interdisciplinary energy research towards a wider public. This year, the event concentrated on the theme CO 2 and Climate Protection: Interactions and Reduction Possibilities. Approximately 150 interested people from the business world, politics and science gathered in the Turbine Hall of the Engineering and Information Science faculties of the Ruhr University of Bochum. In the first part of the event, scientists of different disciplines introduced the topic. For example, Professor Dr. Joh.-Christian Pielow from the Institut für Berg- und Energierecht and Professor Dr. Hermann-Josef Wagner (Chair of Energy Systems and Energy Industry). Bernhard

9 RWI : News 4/ Hillebrand from RWI Essen supplied the economical consideration. It is feared that the current foreseeable costs of emission trading will not lead to the planned success, namely a reduction in the emission of carbon dioxide. Instead, there is the threat of substantial additional burdens to the energy industry, as well as a sell-out of German emission certificates abroad. The second, engineering and information science part of the Energy Day in Bochum was primarily concerned with the state of the technology with regard to CO 2 reduction possibilities in industrial production processes, especially in energy production. Publications RWI : Discussion Papers Download the RWI: Discussion Papers under (17) Harald Tauchmann, Firing the Furnace? - An Econometric Analysis of Utilities Fuel Choice This paper attempts to predict the potential effects of CO 2 emissions trading on fuel choice in the German electric power industry. An analysis of panel data ( ) shows that the fuel mix of electric utilities is price inelastic. Consequently, the implementation of a CO 2 trading scheme will, if anything, only slightly induce interfuel substitution. Accordingly, low-carbon fuels will hardly replace lignite and hard coal through CO 2 emissions trading, as long as abatement targets are not too ambitious. However, one cannot rule out that fuel prices may become more important for the utilities fuel mix as a result of deregulation in the German power sector. (18) Michael Fertig, The Societal Integration of Immigrants in Germany This paper investigates to what extent immigrants are integrated into German society by using data collected in The German Socio-Economic Panel (SOEP). It reveals that especially the attitudes of second-generation immigrants tend to be characterised by a larger degree of fatalism, pessimism and self-doubt. Further information can be found on page 2. (19) Michael Fertig, Shot Across the Bow, Stigma or Selection? The Effect of Repeating a Class on Educational Attainment The discussion paper examines the effect of class repetition on individual educational attainment. The estimation results suggest that a negative association between repeating a class and educational attainment. However, considering unobserved heterogeneity yields a statistically significant and quantitatively substantial positive effect of class repetition on educational outcomes. (20) Thomas K. Bauer, John P. Haisken-DeNew and Christoph M. Schmidt, International Labor Migration, Economic Growth and Labor Markets The Current State of Affairs Even though European labour markets are characterised by high average unemployment, there is a shortage of high-skilled labour, leading many European economists to argue for an immigration policy directed at actively recruiting highly qualified workers from abroad. The paper embeds this discussion into a systematic classification of economic mi-

10 10 RWI : News 4/2004 gration research according to its major conceptual and applied questions. The paper reviews the state of theoretical and empirical research on the migration decision and the literature on the economic performance of immigrants and their economic impact. In addition, the paper discusses expectations on future migration flows and the policy options of immigration countries for dealing with these flows. (21) Boris Augurzky and Jochen Kluve, Assessing the performance of matching algorithms when selection into treatment is strong This paper investigates the method of matching regarding two crucial implementation choices: the distance measure and the type of algorithm. It reveals that decisions regarding the matching algorithm depend on the structure of the data: in the case of strong selection into treatment and treatment effect heterogeneity a full matching seems preferable. If heterogeneity is weak, pair matching suffices. RWI : Materialien (14) Bernhard Lageman, Wolfgang Dürig, Michael Rothgang, Lutz Trettin and Friederike Welter, Determinanten des Strukturwandels im Handwerk Zusammenfassung der Ergebnisse eines Forschungsprojekts (Factors of Structural Change in Small Businesses Summary of the Results of a Research Project) The publication summarizes the results of the study Structural Change in German Small Businesses, which RWI Essen carried out on behalf of the Federal Ministry of Business and Labour. One result received special public attention: the recommendation to abolish the obligation to become a master craftsman in many small business trades, in which no balanced arguments (e.g. the danger for the trade) speak for a modified retention of the previous regulation. Hereby, more freedom for the individuals and more competition exist. The amendment in the small business law, which came into effect on January 1, 2004, and its accompanying path are to be greeted as a step towards the restoration of the freedom of trade in small businesses, although the employment profits could be limited by this measure. The associations should have the opportunity under this liberalized law, in institutional competition with the industry and non-small businesses, to also offer the title of master craftsman as a quality seal for other activities, which do not belong to the previous definition of small business. RWI : Mitteilungen. Quarterly Vol. 54/55 (2003/04) 1 Thomas K. Bauer, High Performance Workplace Practices and Job Satisfaction: Evidence from Europe This study is concerned with the effects of High Performance Workplace Organization on job satisfaction. The results show that a higher involvement of employees in flexible organizations is associated with higher job satisfaction. Being involved in team work and job rotation appear to contribute relatively little effect.

11 RWI : News 4/ Hans Georg Buttermann, Die zukünftige Energieund Rohstoffeffizienz in der Papierindustrie Möglichkeiten und Grenzen (The Future of Energy and Raw Material Efficiency in the Paper Industry Opportunities and Limits) The paper industry is one of the most energy and raw material intensive industries. Furthermore, it faces outstanding growth rates. This study analyses how improvements in energy efficiency and raw material intensity, substitution processes (e.g. waste paper) and the structural change of paper consumption could have a long-term effect on the economic growth for the paper industry. Bernd Fritzsche, Verteilungspolitische Aspekte einer Umstellung der Beiträge zur Gesetzlichen Krankenversicherung auf Pauschalprämien in Verbindung mit Ausgleichszahlungen (Redistributive Effects of a Switch from the Wage-Related Contributions to the German Public Health-Insurance to a Fixed Fee Coupled with Transfer Payments) The paper focuses on the distributional gains and losses resulting from switching from wage-related contributions (GKV) to the proposed scheme of a fixed per person fee coupled RWI ESSEN Vol. 54/55 (2003/04) 1 asdfghjk Duncker & Humblot Berlin with transfer payments depending on the income, size and employment status of the household. RWI : Mitteilungen. Quarterly Interna Company outing 2004: Following the traces of the industrial culture RWI Essen s company outing 2004 characterised the industry (culture). It began with a guide around the Landshaftspark Nord in Duisburg, where the former metallurgical plant Duisburg-Meiderich also lies. Between 1903 and 1985, the plant produced around 37 million metric tons of steel. To- Defying wind and rain: RWI Essen staff members at Duisburger harbour

12 12 day, visitors can climb the old blast furnaces and obtain an impression on the difficult work of the steel workers. In the afternoon, a boat trip around the Duisburg harbour was on the program. The world s largest inland harbour offered views of high cranes and enormous warehouses. However, the cold and damp weather meant that only the very hardy colleagues ventured for a long time to the upper deck of the boat. 300 Euros donated to an initiative in Essen for parents of children with cancer 300 Euros were collected at RWI Essen s Christmas party in 2003 through sales of homemade cakes and employee donations. This was recently donated to the Initiative in Essen for Parents of Children with Cancer. The charity was formed in 1983 and, among other things, runs a house with 18 rooms for parents, in which parents of children with cancer can live during the children s treatment in the University of Essen s paediatric clinic and can, therefore, be near their children. In addition, the charity offers meetings for parents, helps needy families and supports the acquisition of games, play material and medical equipment. Information: RWI : News No. 4/2004 (October 2004) Publisher: Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Hohenzollernstraße 1/3, Essen, Phone +49 (0) 201/ , Fax -200, mail rwi@rwi-essen.de All Rights Reserved Editor: Prof. Dr. Christoph M. Schmidt, Ph.D. Editorial office: Sabine Weiler (Phone -213), Joachim Schmidt ISSN