We use administrative data on income and wealth of taxpayers in the canton of Bern to impute consumption based on the budget constraint. We validate the imputed consumption and use the panel data on consumption, income and wealth to provide stylized facts on consumption and saving patterns in Switzerland for the period 2002-2022. We document a large drop of the saving rate in the first ten years after retirement and show that 75
Abstract This paper examines figurative expressions, such as metaphors, and their association with emotional language in political rhetoric. We compare figurative and literal language employed by US governors by applying a deep learning-based model to their State of the State speeches from 1995 to 2022. Predictions are clustered into nine socioeconomic topics relevant to policy. We then document their use as part of strategic communication. Our results show that partisanship predicts the types of expressions used. Democratic governors are more likely to use highly figurative expressions when discussing environmental issues compared to their Republican counterparts. In contrast, Republicans use them relatively more when talking about moral values such as freedom and liberty. In addition, we show that figurative language on these topics is associated with more emotional language, with significant heterogeneity among them. These results suggest that figurative language may be used as emotional appeals to discuss key political issues.
Using data from the only large-scale randomized controlled trial promoting prolonged exclusive breastfeeding, we study how the intervention affected child health and why. The intervention increased weight-for-age in infancy, with effects persisting through adolescence. We show that treated infants were breastfed more and received less water, juice, and other liquids, resulting in a more calorie-dense diet. A mediation analysis indicates that increased caloric intake explains a large share of the early weight gain, while reduced illness explains little. These findings suggest that, in this setting, the main benefits of breastfeeding promotion for physical growth came from improved nutrition. More broadly, the results highlight that the effects of breastfeeding promotion depend on the local alternatives to breast milk and may differ in settings where infant formula or other more nutritious substitutes are the main alternative.
Abstract The proposed revision of the Swiss Banking Act introduces a public liquidity backstop (PLB) for distressed systemically important banks (SIBs), in part to facilitate resolution. We examine the impact of the PLB on fiscal balances, welfare, and the incentives of bank shareholders and management. A PLB, like too-big-to-fail (TBTF) status, acts as a subsidy for non-convertible bonds, which can create negative externalities. Corrective measures should be implemented before the PLB is activated to align incentives with societal interests. We conservatively estimate that UBS Group’s TBTF status results in funding cost reductions of at least USD 2.9 billion in 2022. The risk for Switzerland of hosting SIBs warrants additional precautionary savings.
Abstract This paper presents novel survey evidence on how firms set prices across the private-sector Swiss economy. The survey covers all stages of the price-setting process and reveals substantial heterogeneity by sector, firm size, customer type, and sales channel. Firms combine time- and state-dependent elements when reviewing prices. Competitor-based pricing dominates over markup rules, and price discrimination is multidimensional and widespread. Price changes occur far less frequently than reviews, are typically synchronized within firms, and exhibit a slightly upward-sloping hazard of adjustment. Cost pass-through is driven mainly by labor, supplier, and raw material costs, with asymmetric responses to cost versus demand shocks. Price rigidity arises primarily from implicit and explicit contracts and cost-based pricing, while operational frictions such as menu costs play only a minor role.
Abstract According to the WWF (Almond et al., 2022), 90 percent of the severe biodiversity loss observed over the past 50 years can be attributed to human—particularly economic—activity. We develop a parsimonious economic model that explains findings like this and allows us to discuss policy measures such as sustainable investing. In this general model, we show that sustainable investing can help to moderate the environmental problem. In particular, we make predictions about the impact of a further 10 percent loss of biodiversity in Switzerland on Swiss GDP and equity market returns.
This paper introduces a weighted output gap measure for Switzerland that combines univariate filters, multivariate filters, and production function approaches. Published quarterly by SECO since 2019:Q4, the series provides a historically consistent and robust indicator of cyclical conditions. Using an inflation forecasting framework, the weighted gap achieves forecasting performance comparable to leading individual methods; although it does not outperform them uniformly, it provides a balanced and reliable signal that mitigates method-specific weaknesses. These properties make it a useful benchmark for business cycle analysis and policy applications.
There is a concern that citizens with different political positions and party affiliations increasingly dislike each other. We examine this affective polarization, which is often associated with a weakening of democracy, in the context of Switzerland’s multiparty landscape with proportional governmental representation. Evaluating the long-term development of affective polarization in Switzerland with both historical and newly gathered data for 2023, we find an increase between 1999 and 2003 but hardly any change over the last two decades. In a complementary perspective based on voters’ revealed preferences, our analysis of straight- vs. split-ticket voting behavior in national parliamentary elections with continuous data back to 1983 does not support any trend in partisan polarization. We further find that more affectively polarized individuals report, on average, lower satisfaction with democracy but show a higher willingness to participate in politics across a wide range of different forms of political engagement, even when controlling for individuals’ general sympathy toward political parties.
We analyse the historical relationship between consumer prices and wages in Switzerland. Our results show that, between 1980 and 2019, the pass-through from prices to wages was substantial. At the same time, nominal wage increases only had a modest effect on prices. Other factors—such as imported inflation, inflation expectations and economic slack—clearly dominate wages in explaining price movements in Switzerland. Second-round effects of inflation, in turn, are mainly explained by inflation expectations. Our results suggest that the pass-through from wages to prices could be higher in an environment of elevated inflation. However, even in the 1980s and 1990s, the pass-through was only modest. It follows that periods of simultaneously high inflation and high wage growth were not the result of a wage-price spiral. Instead, the long-term comovement of the two variables can mostly be explained by common drivers (e.g. inflation expectations, economic slack) and by the gradual adjustment of wages to prices.
This paper examines the unintended effects of public policy measures and social dynamics on e-commerce adoption, using a comprehensive dataset of household level transactions at Switzerland’s largest retailer matched to administrative registers. First, we study how the COVID-19 pandemic and temporary policy measures impacted the adoption of online grocery shopping in Switzerland, and we document a substantial increase in online expenditures. This shift is heterogeneous, with younger, larger, and richer households, as well as those with limited local store access, being particularly responsive. Moreover, we find that stricter mitigation policies intensify online usage. Second, we examine the role of social networks in accelerating the diffusion of e-commerce. We highlight strong peer effects: within multi-generational families and among neighbors, the adoption of online shopping by one household significantly raises the likelihood of adoption by others. These findings reveal the impact of policy measures and the importance of social networks in shaping digital consumption behavior.
We analyze transactional payment data to study consumption expenditure patterns in Switzerland. The high-frequency nature of the data enables credible identification of expenditure changes both across and within weeks, which is essential for business decisions and economic policy analysis. We construct a consumer spending index that is granular across regions and broad product categories, allowing for consistent analysis over multiple years. Using data starting in 2018, we demonstrate the index’s potential to (i) reveal expenditure patterns relevant for strategic decisions by businesses and consumers across weekdays and categories, and (ii) identify economically and statistically significant short-term effects of monetary policy shocks.
This paper quantifies the consequences of a better match between decision-making and cost-bearing responsibilities in the provision of compulsory schooling in Switzerland. Specifically, I investigate whether the elimination of cost-sharing based on effective local expenditures for teachers sets incentives for cost-savings among municipalities. This hypothesis is tested through two local-level panel analyses in the Swiss cantons of Luzern and St.Gallen. The results provide empirical evidence that a substantial increase in the local cost share of teacher expenditures does, on average, not lead to an economically relevant and statistically significant reduction in municipal spending on teachers per student. However, the larger the municipality, the higher the estimated savings, which is evidence that small municipalities face only little scope for cost reductions because they are severely constrained by cantonal policies on class formation. I discuss several residual reasons that might account for limited consequences, including imperfect labor markets for teachers and the political economy of teacher employment.
The costs and speed of the energy transition are closely linked to the elasticity of substitution between fossil fuels and clean energy sources. Yet, despite its central role, this parameter has been treated as exogenous and constant in numerical studies of climate policy. Drawing on recent empirical evidence, this paper incorporates an endogenous elasticity of substitution that flexibly interacts with the relative share of clean energy in the economy into the CITE model—a dynamic CGE model of Switzerland featuring endogenous growth and heterogeneous households. Using this refined approach, I compare the equity and efficiency implications of carbon taxation under endogenous versus exogenous energy substitution and explore alternative revenue recycling schemes, including lump-sum transfers to households and output subsidies for clean energy. Although beneficial to the economy as a whole, the dynamic feedback effect arising from endogenous energy substitution has distributional impacts favoring high-income households, challenging its presumed progressivity. Redistributing carbon tax revenues as output subsidies for clean energy is most efficient in terms of aggregate welfare under low-to-moderate climate targets. However, due to the absence of direct household transfers, this policy option leads to the most regressive outcome, highlighting an equity–efficiency trade-off in the design of tax-based climate policy.
This paper uses novel linked survey and administrative data for jobseekers in Switzerland to study jobseekers’ skills, potential skill gaps, and their job search behaviour. Based on a realized sample of survey participants that is better educated and has better employment prospect than the overall population of jobseekers, we find that women and older jobseekers are most at risk of lacking digital skills, while low education and little work experience are risk factors associated with lacking professional and interdisciplinary skills. We further document that the willingness of jobseekers to deviate from their last job in terms of skill requirements is relatively low and that they are reluctant to accept wage losses. However, jobseekers with potential skill gaps do tailor their search strategy to their skill profile. Our results provide interesting insights for policy makers and practitioners in the public employment service who seek to support jobseekers in navigating modern labour markets with rapidly changing skill requirements.
Different consumption patterns have been linked to different levels of responsibility for current greenhouse gas (ghg) emissions, and it is well established that the affluent are responsible for higher levels of global ghg emission than are the poor. Here I couple a life cycle assessment of consumer goods with household survey data about consumption patterns to arrive at household level responsibility for global ghg emissions by consumption category. This allows me to provide a detailed analysis of how different consumption categories contribute to this responsibility. From this, I offer insights into how this information can be used for designing policies that create equitable outcomes. I conclude that the distributional impacts of ghg pricing with revenue recycling will remain unproblematic as climate policy continues to cover more ghgs from more regions. If it is desired that high-income households make a bigger contribution to the emissions reduction effort than others, focusing climate policy on transport (high confidence), eating out, and clothing (both with lower confidence) may provide avenues for achieving that. This is the case, since responsibility for ghg emissions from these consumption categories increases faster with income than it does for other goods.
The restaurant industry has a high failure rate and predicting restaurant bankruptcy is an important task to mitigate economic losses. Restaurant consumer review data contains rich information and influences future restaurant demand. We investigate the value of publicly available data for predicting bankruptcies of individual restaurants. Our unique data set includes alternative consumer data from the two most frequently used online restaurant platforms in Switzerland and official business data from Swiss government websites. In evaluating the accuracy of predictive bankruptcy probabilities, we quantify the potential of the alternative data sources and we analyze the relevance of novel predictor variables. We find that alternative consumer data is relevant for restaurant bankruptcy prediction and the highest prediction accuracy is achieved when alternative data and traditional business data are combined.
Using granular customs data, we construct a counterfactual of the evolution of Swiss goods exports under the premise that the minimum exchange rate policy would have been continued. We study the adjustment dynamics of aggregate and sectoral goods exports due to the exchange rate shock in January 2015 and examine potential differences between sectors. While Swiss total nominal exports drop in Swiss Franc, they increase in Euro. In real quantities, total exports remain largely unaffected indicating a high degree of resilience of the Swiss export industry. At the sectoral level, we observe a heterogeneous adjustment of exports consistent with varying degrees of supply-side adjustment flexibility.
The Swiss COVID-19 fiscal policy dataset includes detailed information on all fiscal support policies adopted in Switzerland in response to the COVID-19 pandemic. Covering the period from February 2020 to February 2021, the dataset includes both quantitative and textual information about nine types of fiscal policy instruments announced by local governments in one of Switzerland’s 26 cantons (regional jurisdictions) or at the national level. The data has been hand-coded and primarily collected from official sources, including government decrees, minutes from ministerial meetings, and press releases. The dataset contains 1330 policy observations, with data coded into up to 23 variables. It allows for the analysis of differences in COVID-19 fiscal support measures across regions, their timing, the political decision-makers, the types of policies, and further characteristics. This data offers valuable insights for answering research questions related to fiscal policy and its links to various social and economic phenomena.
There is an increasing demand for understanding how international shocks affect regions within a country differently. We study the short-term effects of a global energy price shock on output and inflation in the Swiss cantons using input–output techniques. Our results show that the induced inflation and contraction of output are small compared to other countries, indicating that Switzerland is generally resilient to price changes of fossil fuels. This is due to the low dependence of Switzerland on oil and gas and because of the large value added share of other activities. The responses of the cantons are heterogeneous, with Ticino, Neuchâtel and Basel-Country being most affected owing to their specialization in fossil fuel-dependent sectors with strong reliance on international inputs. Although the source of the responses to the shock relates to the energy sector, the contribution of other sectors through regional international linkages is larger as a result of an intermediates’ price spiral in all cantons. The results emphasize the informational gains from data on sectoral structures and global value chain integration at the regional level.
