The chair conducts research in the areas of Social Policy, Public Economics, and Regional and Urban Economics.
On the one hand, general equilibrium models and game theory models are used to analyze interdependencies of individual actions, for example in connection with the use of state instruments or in the choice of place of residence and work. On the other hand, hypotheses developed on the basis of theory are tested with the help of laboratory experiments, survey experiments and microeconometric analysis of secondary data.
Selected Research Projects
Project Title: Access to Jobs and Individual Labor Market Outcomes
- Participants: Andreas Mense (IAB), Wolfgang Dauth (IAB und Universität Bamberg), Matthias Wrede (FAU)
- Abstract: We investigate the employment effects of job access within cities. To overcome the endogeneity of residential location choices, we exploit the quasi-random allocation of applicants across affordable housing units in five German cities and propose a novel IV strategy. Our job access measure combines proximity to jobs in both geographical and skill space, taking into account potential competition from other workers. We compile a unique administrative dataset comprising the complete labor market biographies of individuals who moved into affordable housing. A one-standard-deviation increase in job access reduces the unemployment hazard of unskilled workers by 3.4 percentage points. We do not find similar effects for skilled workers, who are more likely to own a car and are therefore less geographically constrained. Simulations show that full segregation, with all unskilled allocated to central neighborhoods, would reduce the city-wide unemployment rate of the largest city in our sample, Munich, by 1.3 percentage points.
- Working Paper: Access to Jobs and Individual Labor Market Outcomes [with Andreas Mense and Wolfgang Dauth]. CESifo Working Paper No. 13040. 2026.
Project Title: Housing Cooperatives in a Regulated Rental Housing Market
- Participant: Matthias Wrede (FAU)
- Abstract: Housing cooperatives have a significant share in some countries, particularly in urban housing markets, and are supported by municipalities through tax breaks and preferential access to land. We examine the contribution of housing cooperatives to the provision of affordable housing and how they are affected by rent control. For Germany, we find that residents of cooperative housing pay lower rents than for-profit owners, but are still affected by rent control. In particular, we show that stricter limits on rent increases for existing residential leases in tight housing markets have the effect of lowering rents for housing cooperatives, while we find no such effect of rent regulation for for-profit landlords.
- Data/Daten: Sozio-oekonomisches Panel (SOEP)
- Working Paper: Housing Cooperatives, Housing Affordability, and Rent Control. CESifo Working Paper No. 11452. 2024.
Project Title: Local Voting Rights of EU Citizens
- Participants/Beteiligte: Sebastian Ach (FAU), Elisa Poletto (FAU), Matthias Wrede (FAU)
- Abstract: Since the 1970s, the right of foreigners to vote at the municipality level has been the subject of an ongoing political and social debate, the background to which often reflects party-political expectations regarding the voting preferences of foreigners. Based on the introduction of municipality voting rights for EU foreigners, which has been introduced in the Basic Law (“Grundgesetz”) since 1992, we examine the actual influence of the extension of voting rights. We work with data from Bavaria, which we analyze with longitudinal analyses at the municipality level.
- Zusammenfassung: Seit den 70er Jahren ist das Ausländerwahlrecht auf kommunaler Ebene Gegenstand einer anhaltenden, politischen und gesellschaftlichen Debatte, deren Hintergründe oftmals auch parteipolitischen Erwartungen bzgl. der Wahlpräferenz von Ausländern widerspiegeln. Anhand der Einführung des kommunalen Wahlrechts für EU-Ausländer, welches seit 1992 im Grundgesetz verankert ist, untersuchen wir, welchen Einfluss die Ausweitung des Wahlrechts tatsächlich besitzt. Dabei arbeiten wir mit Daten aus Bayern, welche wir mit Längsschnittanalysen auf Gemeinde-Ebene analysieren.
Project Title: Political Incentives in Local Tax Setting: Evidence from the German Property Tax Reform
- Participants: Ramona Müller (FAU), Matthias Wrede (FAU)
- Abstract: Local governments’ discretion over tax rates may be used strategically when politicians perceive that a tax burden falls differently across voter groups. We study this mechanism in the context of Germany’s property tax reform, which created exogenous variation in the tax across voter groups and municipalities by allowing states to adopt different property valuation models. Some federal states implicitly set a higher tax for rental properties than for comparable owner-occupied units. We show that, over an average post-announcement period of 3.6 years, municipal tax multipliers increased by 15 percentage points more when two conditions were met: municipalities were governed by homeowner-friendly parties and were located in states where tenants will face a higher tax base per square meter. By identifying political drivers behind sharp increases in German property tax multipliers in recent years, we provide causal evidence that higher-level governments’ tax-base choices change the electoral incentives governing local tax rates.
- Working Paper: Political Incentives in Local Tax Setting: Evidence from the German Property Tax Reform. CESifo Working Paper No. 13067. 2026. DOI: https://doi.org/10.65864/4vgkrlimtj