Economy: Why scientists are turning their backs on Germany

Johannes Stroebel knows the answers to questions that are relevant to many Germans. How well have the people who had fled Syria become integrated into German society today? Did Bavaria do a better job than Lower Saxony? And what determines success in this context? The 37-year-old researcher knows the answers because he was able to use data available on Facebook to find out how many German contacts Syrians now have. His key findings: in rural areas — such as in parts of Mecklenburg-Western Pomerania and Lower Saxony — social integration works better than in cities. One determinant is the people’s readiness to participate in social integration courses. In areas where those courses are easily available Syrians have actually made more contacts with Germans and learned to speak the German language better. Stroebel — who grew up in Darmstadt and is a professor at New York University — has just won the Fischer Black Prize for his body of work. The award is given every two years by the world's most important association of financial economists, the American Finance Association, to the best financial researcher under the age of 40. Being awarded this prize Stroebel made it into the group of winners such as Raghuram Rajan, the former chief economist of the International Monetary Fund and 2003 prize winner. Go to the original text in German Inspiration for the next generation Stroebel is not the only German currently playing in the top league of economists in the United States. In fact, rarely has the success of German economists been so concentrated there as it is today. This is particularly noticeable among finance scholars. Markus Bunnermeier from Princeton University recently became president of the American Finance Association which gives the native of Landshut clout in his academic field. Next year, he will deliver the “Presidential Address”, a highly regarded research lecture, in front of hundreds of researchers at the world's most important economists’ conference. His two successors have already been nominated. And both will be German: Monika Piazzesi from Stanford University and Ulrike Malmendier from University of California, Berkeley, will certainly fill the coveted post in the years to come. Until last summer, the editor of the “Journal of Finance,” the top journal in financial economics, was also German: Stefan Nagel from University of Chicago. He handed the job over to Antoinette Schoar, a fellow countrywoman who does research at MIT. But the success story of German economists has a flaw. At least that is how Berkeley researcher Malmendier sees it. “Germany benefits far too little from all these top researchers because there is no incentive for them to return home.” Despite living so far away she became one of Germany’s five “Wirtschaftsweise” by joining the German Council of Economic Experts last year. A return to Germany, however, is currently out of the question for her.+ So, why is the absence of these bright minds a loss for Germany? The studies carried out by researchers in the U.S. are publicly accessible and can therefore also be used in Germany, says Malmendier. But it still makes a big difference whether the best researchers are active at German universities or not. "It is especially important for the next generation to learn from these researchers and to be inspired by them," says the economist. She benefited from relevant role models during her studies in Bonn herself and was only able to grasp what economics is really about thanks to them. According to her, potential returnees to Germany are in a position to change the country’s research landscape and have the potential to influence political decisions and measures. She cites Simon Jäger as an example. He dared to return to Bonn last year, leaving his career at MIT behind to take over at the age of 36 as director of the Institute for the Study of Labor (IZA). Why labour market economist Jäger is an exception to the rule becomes clear when you talk to prize winner Stroebel. He follows German media and debates, and is considering the possibility of returning home. Currently, he is even living in Munich for a year because he has taken a leave of absence from teaching at New York University. The plan was to devote himself fully to his research at Munich University — but this has turned out to be difficult. Stroebel and his wife, who is also an economist, have three children, aged one, four and seven, and they all have to go to different childcare facilities. “Even the all-day school only looks after them for half the afternoon at best,” says Stroebel. “Out of twenty kindergartens which we checked out only one offered us a place but it is about half an hour away. There is no such thing like a marketplace for nanny services like in America." To him childcare matters when he decides whether he wants to stay in Germany. "Something definitely needs to be done about that," he says. Poor childcare He does not buy the argument that childcare in Germany is often for free. Firstly, he would have to pay a lot of money in Germany if he wanted to benefit from childcare times similar to those offered in the U.S., he argues. Secondly, the salaries in America were correspondingly higher. Because of the rigid civil service system, Stroebel estimates that a professor in Germany earns about two-thirds less than his counterpart on the other side of the Atlantic. Other researchers say that professors in the U.S. are paid twice as much. Just to get an idea: In Germany the monthly basic salary for W3 professors who rank the highest in the salary scale ranges between 6700 euros in Lower Saxony and just under 7600 euros in Bavaria, according to figures from the German University Association. However, money is not the main reason why most top researchers prefer to stay at an American elite university — at least not when it comes to their personal income. Markus Brunnermeier, for example, describes how he received several offers from Germany but ultimately stayed at Princeton because of the better research conditions. "Sixty top people do research in the department here — you won't find anything like this anywhere in Europe." The close collaboration with fellow researchers and good facilities were inspiring and helped him with his own work, he says. "If you are academically ambitious and want to leave your footprint in the economy textbook, you can practically only do it when you work in America," Brunnermeier says. The most renowned universities try to steal the top staff from each other. This competition stimulates the academic community and motivates researchers. In addition to this, even top researchers in Germany have to invest a lot of time in teaching. "Eight or nine semester hours per week are normal here in Germany," says Regina Riphahn, professor at the Friedrich Alexander University of Erlangen-Nuremberg. In the U.S., where she has spent part of her career, it is often only half as many hours, and in some cases only two courses a year. Things are changing Moreover, in Germany there is not only a lack of time for research but often also a lack of useful data. Riphahn elaborates on this topic and gives an example: In the Netherlands it is possible to track the effects of a pension reform over three generations because the data of grandmothers can be linked to those of their grandchildren. In Germany, a grandmother's administrative data could not even be linked to that of her husband. "In our country, data protection is the priority, not an interest in knowledge," she says. For all these reasons, Riphahn, who is currently chairwoman of the Verein für Socialpolitik, the largest German-speaking association of economists, sees Germany at a disadvantage as a research location. At the same time, however, she emphasises that positive things have also happened here. For example, German universities have now also created so-called tenure-track positions, which give young researchers with good performance a more secure job perspective in academia than in the past. Also, universities offer graduate programs that are based on the American model, without one-to-one supervision between professor and doctoral student. Students from other countries are also flocking to Master's programmes. And the Excellence Initiative has created academic beacons, such as the joint Cluster of Excellence in Economics at the Universities of Cologne and Bonn, which brings together many economists with strong research skills. Much of this is still in its infancy, and success does not happen overnight but you cannot deny that things have changed. On the positive side, top researchers are increasingly being heard in important places in Germany, irrespective of their geographical location. Princeton economist Brunnermeier reports that he has been involved in consulting politicians since the financial crisis and has good access to politicians and ministries. And economist Malmendier is even surprised that there are "more opportunities for face-to-face conversations than I had dared to hope for.” Social media has also reduced geographical distance: During the pandemic and the energy crisis Rüdiger Bachmann from the University of Notre Dame explained the most important economic issues to many Germans via Twitter and podcast. In the lecture halls, however, these voices are mostly missing. "The federal government, the states and the universities are being called upon to address this," says economist Riphahn. © Frankfurter Allgemeine Zeitung GmbH, Frankfurt. All rights reserved. Translation provided by kompreno –analysis, opinion and reporting from all over the world translated into your language.