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The Aggregate Effects of the Hartz Reforms in Germany

  • Matthias S. Hertweck

    ()

    (Department of Economics, University of Konstanz, Germany)

  • Oliver Sigrist

    ()

    (Faculty of Business and Economics, University of Basel, Switzerland)

This paper quantifies the impact of the Hartz reforms on matching efficiency, using monthly SOEP gross worker flows (1983-2009). We show that, until the early 2000s, close to 60% of changes in the unemployment rate are due to changes in the inflow rate (job separation). On the contrary, since the implementation of the reforms in the mid-2000s, the importance of the outflow rate (job finding) has been steadily increasing. This indicates that matching efficiency has improved substantially in recent years. Results from an estimated matching function — pointing to efficiency gains of more than 20% — corroborate this finding.

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Paper provided by Department of Economics, University of Konstanz in its series Working Paper Series of the Department of Economics, University of Konstanz with number 2012-38.

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Length: 41 pages
Date of creation: 21 Dec 2012
Date of revision:
Handle: RePEc:knz:dpteco:1238
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