New Proposed Law in German Bundestag to Damage Economic Research.

If you are an economist, think that the German Statistical Agency holds several micro-census datasets, in particular the Official Firm Data for Germany (AFiD). The AFiD is a panel dataset that includes administrative data on a broad range of business-related information combined with detailed environmental statistics at the firm level. Currently it covers the period 1995-2014. Imagine that the German legislator would pass a law that limits the length of retention of such business data to only few years. That would destroy a piece of scientific treasure!

If you are not an economist, just think that official firm-level datasets are the most reliable data sources to carry out economic research on the determinants of productivity growth, employment, innovation and many other factors related to the economy of a country. There are researchers and doctoral students out there that have spent years of their life working on these datasets and are hoping to turn their sacrifice into well published scientific articles. Just realize that a new bill discussed in the German Parliament will turn their impressive effort into a useless endeavour, if nothing is done.

The Bundestag, the German Parliament, is discussing in these days an amendment to the Bundesstatistikgesetzes (Statistics Act) that for privacy concerns will require company identification numbers to be deleted after ten years.

The datasets affected by the bill are mostly about firms, not households, and they are already hardly accessible to safeguard privacy. You can find some examples of these datasets here. They contain general information on the balance sheet and income statement of firms, as well as data on their use of labour and energy. Privacy is already well protected. Researchers never have access to real firm identifiers but only to non-systematic firm numbers. Researchers cannot get information on a single firm – not even a small group of firms – but only run analysis on large samples, but it is very important that the firm numbers stay the same and are not deleted! Currently, such data cannot be copied and the only possible way to access them is to go to the Statistical Agency and work on a PC disconnected from the rest of the world. Apparently this good balance between privacy (of firms!) and open access for scientific discovery is not enough for a group of companies that have triggered this initiative in the Bundestag.

The Science Minister of Baden Württemberg, Theresia Bauer, has recently spoke out and warned of the great damage this measure will do to economic research, not only in Germany  (read here, in German). The Verein für Socialpolitik (German Economics Association) has prepared an open letter to protest against this bill (in German). If the bill passes, not only many interesting economic questions cannot be investigated with a time frame of barely a decade – for procedural reasons it will be, de facto, up to 6 years – but it also means that the results of a paper will not be replicable after some years because the identifiers are deleted.

As an economist, I am touched by this silent drama even if I have not worked with such datasets so far. I know how important they are for advancing our knowledge on several important economic topics and I am honestly horrified by knowing that such bill will be passed by the German parliament. Nobody is aware of this problem, probably not even the members of the Bundestag that are discussing the amendment. The media coverage has been completely absent and policymakers are going to decide soon. Social media can help to raise awareness on that, so my call is to you to spread the news through your contacts!

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