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The Effect of the Hartz Reform on Unemployment Duration and Post-Unemployment Outcomes. A Difference-in-Differences Approach

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  • Bruno Amable

    (IUF - Institut Universitaire de France - M.E.N.E.S.R. - Ministère de l'Education nationale, de l’Enseignement supérieur et de la Recherche, CEPREMAP - Centre pour la recherche économique et ses applications - ECO ENS-PSL - Département d'économie de l'ENS-PSL - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres, CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)

  • Baptiste Françon

    (CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique)

Abstract

In this paper, we investigate the microeconomic effects of one major feature of the German Hartz Reforms (2003-2005), namely the reduction in compensation duration for older unemployed above 45 years of age. We look at two potential effects of this measure: on job take-up rates, but also on post-unemployment outcomes, through various indicators of matching quality (job stability, skill adequacy) and job quality (type of job contract). Applying difference-in-differences estimators, we show that the effects of this specific feature were rather scant. Regarding unemployment duration, only unemployed within a specific age group (55 to 59 years old) were affected by the reform. Evidence suggests that this is because they previously used unemployment schemes as a bridge to early retirement. In addition, there is some evidence of detrimental effects on job or matching quality.

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  • Bruno Amable & Baptiste Françon, 2014. "The Effect of the Hartz Reform on Unemployment Duration and Post-Unemployment Outcomes. A Difference-in-Differences Approach," Post-Print halshs-00973884, HAL.
    • Handle: RePEc:hal:journl:halshs-00973884
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00973884
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    1. Rothe, Thomas & Wälde, Klaus, 2017. "Where did all the unemployed go? : Non-standard work in Germany after the Hartz reforms," IAB-Discussion Paper 201718, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].

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    More about this item

    Keywords

    Assurance chômage; durée de chômage; appariement sur le marché du travail; qualité de l'emploi; dispositifs de pré-retraite; différence-de-différences; Unemployment benefits; unemployment duration; job matching; job quality; early retirement; difference-in-differences;
    All these keywords.

    JEL classification:

    • C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies

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