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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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