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The German unemployment since the Hartz reforms: Permanent or transitory fall?

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  • Stephan, Gaëtan
  • Lecumberry, Julien

Abstract

The Hartz reforms were designed to make the German labor market more flexible in order to reverse the increasing trend of unemployment. This paper employs unobserved components models in order to distinguish permanent from transitory movements in the German unemployment rate. Our results show that the permanent component of the German unemployment was reduced in the range of 1.1 and 2.6 percentage points after the Hartz reforms.

Suggested Citation

  • Stephan, Gaëtan & Lecumberry, Julien, 2015. "The German unemployment since the Hartz reforms: Permanent or transitory fall?," Economics Letters, Elsevier, vol. 136(C), pages 49-54.
    • Handle: RePEc:eee:ecolet:v:136:y:2015:i:c:p:49-54
    DOI: 10.1016/j.econlet.2015.08.003
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    References listed on IDEAS

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    1. James C. Morley, 2007. "The Slow Adjustment of Aggregate Consumption to Permanent Income," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 39(2‐3), pages 615-638, March.
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    Cited by:

    1. Ehrich, Malte & Munasib, Abdul & Roy, Devesh, 2018. "The Hartz reforms and the German labor force," European Journal of Political Economy, Elsevier, vol. 55(C), pages 284-300.
    2. Masuch, Klaus & Anderton, Robert & Setzer, Ralph & Benalal, Nicholai, 2018. "Structural policies in the euro area," Occasional Paper Series 210, European Central Bank.

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    More about this item

    Keywords

    Business cycle; Unobserved components; Hartz reforms;
    All these keywords.

    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles

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