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Fixing the leak: Unemployment incidence before and after the 2006 reform of unemployment benefits in Germany

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  • Stephan Dlugosz
  • Gesine Stephan
  • Ralf A. Wilke

Abstract

From 2002–2004, the German government passed several laws that curtailed the generosity of the unemployment compensation system. One of the most ambitious changes was a considerable reduction in unemployment benefit entitlement lengths for older unemployed, which was effective during 2006 and 2007. We apply a difference-in-differences approach to show that the highly disputed reform induced a considerable decline in unemployment incidence among older workers. It thus sealed an important leak in the unemployment insurance system. Furthermore, we find a strong anticipation effect; unemployment entries of elderly workers peaked during the months preceding the reform.

Suggested Citation

  • Stephan Dlugosz & Gesine Stephan & Ralf A. Wilke, "undated". "Fixing the leak: Unemployment incidence before and after the 2006 reform of unemployment benefits in Germany," Discussion Papers 09/10, University of Nottingham, School of Economics.
  • Handle: RePEc:not:notecp:09/10
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    References listed on IDEAS

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    Cited by:

    1. Barbara Hanel, 2010. "Disability Pensions and Labor Supply," Working Papers 086, Bavarian Graduate Program in Economics (BGPE).
    2. Lo, Simon M.S. & Stephan, Gesine & Wilke, Ralf, 2012. "Estimating the Latent Effect of Unemployment Benefits on Unemployment Duration," IZA Discussion Papers 6650, Institute for the Study of Labor (IZA).
    3. Kloß, Michael & Nagl, Wolfgang, 2013. "Unemployment compensation and unemployment duration - Evidence from the German Hartz IV reform," Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 79711, Verein für Socialpolitik / German Economic Association.
    4. Tominey, Emma, 2013. "Maternity Leave and the Responsiveness of Female Labor Supply to a Household Shock," IZA Discussion Papers 7462, Institute for the Study of Labor (IZA).
    5. Dlugosz, Stephan & Stephan, Gesine & Wilke, Ralf A., 2011. "Kürzere Bezugshöchstdauern von ALG und Effekte auf die Eintritte in Arbeitslosigkeit," ZEW Wachstums- und Konjunkturanalysen, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research, vol. 14(2), pages 8-9.
    6. Goerke Laszlo & Pannenberg Markus, 2011. "'Take It or Go to Court': The Impact of Sec. 1a of the German Protection Against Dismissal Act on Severance Payments," Review of Law & Economics, De Gruyter, vol. 7(2), pages 377-404, December.
    7. Boockmann, Bernhard & Fries, Jan & Göbel, Christian, 2012. "Specific measures for older employees and late career employment," ZEW Discussion Papers 12-059, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    8. Hanel, Barbara, 2012. "The effect of disability pension incentives on early retirement decisions," Labour Economics, Elsevier, vol. 19(4), pages 595-607.
    9. Felix Hüfner & Caroline Klein, 2012. "The German Labour Market: Preparing for the Future," OECD Economics Department Working Papers 983, OECD Publishing.
    10. Bruno Amable & Baptiste Françon, 2014. "The Effect of the Hartz Reform on Unemployment Duration and Post-Unemployment Outcomes. A Difference-in-Differences Approach," Documents de travail du Centre d'Economie de la Sorbonne 14020, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
    11. repec:spr:jlabrs:v:50:y:2017:i:1:d:10.1007_s12651-017-0221-9 is not listed on IDEAS
    12. Dietz, Martin & Walwei, Ulrich, 2011. "Germany - no country for old workers?," Zeitschrift für ArbeitsmarktForschung - Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 44(4), pages 363-376.
    13. Wolfgang Nagl & Michael Weber, 2014. "Unemployment compensation and unemployment duration before and after the German Hartz IV reform," ifo Working Paper Series 186, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.
    14. Christl, Michael & Kucsera, Dénes & Lorenz, Hanno, 2015. "Jung, älter, arbeitslos? Wie Ältere länger in Beschäftigung gehalten werden können, ohne die Jungen in die Arbeitslosigkeit zu treiben," EconStor Research Reports 119605, ZBW - German National Library of Economics.
    15. Stephan, Gesine & van den Berg, Gerard & Homrighausen, Pia, 2016. "Randomizing information on a targeted wage support program for older workers: A field experiment," Annual Conference 2016 (Augsburg): Demographic Change 145487, Verein für Socialpolitik / German Economic Association.

    More about this item

    Keywords

    unemployment incidence; policy evaluation; administrative data;

    JEL classification:

    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • J65 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment Insurance; Severance Pay; Plant Closings

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