This paper analyzes the local economic impacts of troop deployments. We exploit variation from the historic large-scale US troop withdrawal from Germany triggered by the end of the Cold War, to estimate the effect on local labor markets and public finances. We use administrative data provided by the US Department of Defense to quantify the size of the troop withdrawal at the municipal level. Using a synthetic difference-in-differences estimator, we find negative effects on local labor markets: for each withdrawn US soldier, the number of local jobs decreases by 0.53. The decrease in economic activity results in a reduction of revenues which municipalities balance by lowering their expenditures, while increasing business and property tax multipliers. In individual-level analyses, we document that workers displaced by the closure of a US military base have persistently lower employment rates. Moreover, their daily wages remain around 9.2 percent lower fifteen years after the layoff. The negative impact on labor outcomes is particularly pronounced for women, older workers, and those employed in regions with more unfavorable initial labor market conditions.

When third parties oppose repugnant transactions, legal bans often prevent welfare-improving trades. We provide the first causal evidence that financial inequality between transacting parties drives such opposition. In a pre-registered vignette experiment (N = 1,073), we alter the income levels of buyer and seller across five vignettes describing repugnant transactions. We test the effect in two independent samples (a U.S. sample and a sample drawn from selected European countries) and find that inequality increases willingness to prevent transactions by 21%. The effect goes beyond the effect of low income: opposition rises substantially more when a low-income seller faces a richer buyer than when both parties have equally low incomes. Inequality also affects repugnance norms, suggesting it strengthens the collectively enforced character of repugnance. Moreover, we show that the same market can be contested for opposing reasons depending on the relational context: under equal incomes, high prices increase opposition (coercion); under inequality, low prices increase opposition (exploitation). Our findings suggest that market design addressing socioeconomic asymmetry between parties may reduce resistance to repugnant markets.

This article describes ZEW-EviSTA, the microsimulation model developed and used at ZEW - Centre for European Economic Research in Mannheim. The model simulates the German tax and transfer system using household micro level data. By estimating fiscal effects, labor market outcomes as well as distributional impacts the model allows for a comprehensive ex ante analysis of reform proposals. Heterogeneity analyses targeting specific subgroups of the population are feasible, too. The present article describes which data sources are used for the simulation, how key features of the German tax and transfer system are implemented, which simulation methods are employed to analyze policy changes and how the model is validated against official statistics. Moreover, by providing examples of the outputs which ZEW-EviSTA generates the paper gives an idea of the questions that can be answered using the model.