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Did the Hartz Reforms Speed-Up the Matching Process? A Macro-Evaluation Using Empirical Matching Functions

  • René Fahr
  • Uwe Sunde

Starting in January 2003, Germany implemented the first two so-called Hartz reforms, followed by the third and fourth packages of Hartz reforms in January 2004 and January 2005, respectively. The aim of these reforms was to accelerate labor market flows and reduce unemployment duration. Without attempting to evaluate the specific components of these Hartz reforms, this paper provides a first attempt to evaluate the overall effectiveness of the first two reform waves, Hartz I/II and III, in speeding up the matching process between unemployed and vacant jobs. The analysis is conceptually rooted in the flow-based view underlying the reforms, estimating the structural features of the matching process. The results indicate that the reforms indeed had an impact in making the labor market more dynamic and accelerating the matching process. Copyright 2009 The Authors. Journal Compilation Verein für Socialpolitik and Blackwell Publishing Ltd.

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Article provided by Verein für Socialpolitik in its journal German Economic Review.

Volume (Year): 10 (2009)
Issue (Month): (08)
Pages: 284-316

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Handle: RePEc:bla:germec:v:10:y:2009:i::p:284-316
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  1. Fahr, Rene & Sunde, Uwe, 2006. "Spatial mobility and competition for jobs: Some theory and evidence for Western Germany," Regional Science and Urban Economics, Elsevier, vol. 36(6), pages 803-825, November.
  2. van Ours, J.C. & Gorter, C., 1994. "Matching Unemployment and Vacancies in Regional Labour Markets; an empirical analysis for the Netherlands," Other publications TiSEM 63318c4d-4008-4f29-94eb-a, School of Economics and Management.
  3. Hujer, Reinhard & Blien, Uwe & Caliendo, Marco & Zeiss, Christopher, 2002. "Macroeconometric Evaluation of Active Labour Market Policies in Germany – A Dynamic Panel Approach Using Regional Data," IZA Discussion Papers 616, Institute for the Study of Labor (IZA).
  4. Coles, Melvyn G & Smith, Eric, 1998. "Marketplaces and Matching," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 39(1), pages 239-54, February.
  5. Coles, Melvyn & Petrongolo, Barbara, 2003. "A Test between Unemployment Theories Using Matching Data," IZA Discussion Papers 723, Institute for the Study of Labor (IZA).
  6. Gross, Dominique M., 1997. "Aggregate job matching and returns to scale in Germany," Economics Letters, Elsevier, vol. 56(2), pages 243-248, October.
  7. Fahr, Rene & Sunde, Uwe, 2005. "Job and vacancy competition in empirical matching functions," Labour Economics, Elsevier, vol. 12(6), pages 773-780, December.
  8. René Fahr & Uwe Sunde, 2004. "Occupational job creation: patterns and implications," Oxford Economic Papers, Oxford University Press, vol. 56(3), pages 407-435, July.
  9. Fertig, Michael & Schmidt, Christoph M. & Schneider, Hilmar, 2002. "Active Labor Market Policy in Germany – Is There a Successful Policy Strategy?," IZA Discussion Papers 576, Institute for the Study of Labor (IZA).
  10. Fahr, René & Sunde, Uwe, 2006. "Regional dependencies in job creation: An efficiency analysis for Western Germany," Munich Reprints in Economics 20484, University of Munich, Department of Economics.
  11. Mumford, Karen & Smith, Peter N, 1999. " The Hiring Function Reconsidered: On Closing the Circle," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 61(3), pages 343-64, August.
  12. Bonin, Holger & Schneider, Hilmar, 2006. "Wirksamkeit der Förderung der beruflichen Weiterbildung vor und nach den Hartz-Reformen," IZA Discussion Papers 2069, Institute for the Study of Labor (IZA).
  13. Gregg, Paul & Petrongolo, Barbara, 2005. "Stock-flow matching and the performance of the labor market," European Economic Review, Elsevier, vol. 49(8), pages 1987-2011, November.
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