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Distributional and Behavioural Effects of the German Labour Market Reform

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  • Clauss, Markus
  • Schnabel, Reinhold

Abstract

We estimate the effects of the reform of the German Unemployment Insurance that replaced the wage related Unemployment Assistance with an income maintenance program and stronger means testing. We model the tax-benefit system and use the Socio-Economic Panel. We estimate a discrete labour supply model and simulate the behavioural and distributional effects using the pseudo-distribution method. Poverty and inequality decline overall, since households with children and low income gain, while those who used to earn high wages and received high unemployment transfers lose most. The behavioural responses mitigate the redistributive impact of the reform. --

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Bibliographic Info

Paper provided by ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research in its series ZEW Discussion Papers with number 08-006.

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Date of creation: 2008
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Handle: RePEc:zbw:zewdip:7017

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Keywords: distribution analysis; household labour supply; microsimulation; poverty; Germany;

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Cited by:
  1. Michael Bräuninger & Jochen Michaelis & Madlen Sode, 2013. "10 Jahre Hartz-Reformen," MAGKS Papers on Economics 201318, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
  2. Norbert Berthold & Mustafa Coban, 2014. "Kombilöhne gegen Erwerbsarmut: Warum die USA erfolgreicher sind als Deutschland," Wirtschaftsdienst, Springer, vol. 94(2), pages 118-124, February.

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