IDEAS home Printed from https://ideas.repec.org/p/ucn/wpaper/201030.html
   My bibliography  Save this paper

Distributional consequences of labor demand adjustments to a downturn : a model-based approach with application to Germany 2008-09

Author

Listed:
  • Olivier Bargain
  • Herwig Immervoll
  • Andreas Peichl
  • Sebastian Siegloch

Abstract

Macro-level changes can have substantial effects on the distribution of resources at the household level. While it is possible to speculate about which groups are likely to be hardest-hit, detailed distributional studies are still largely backward-looking. This paper suggests a straightforward approach to gauge the distributional and fiscal implications of large output changes at an early stage. We illustrate the method with an evaluation of the impact of the 2008-2009 crisis in Germany. We take as a starting point a very detailed administrative matched employer-employee dataset to estimate labor demand and predict the effects of output shocks at a disaggregated level. The predicted employment effects are then transposed to household-level microdata, in order to analyze the incidence of rising unemployment and reduced working hours on poverty and inequality. We focus on two alternative scenarios of the labor demand adjustment process, one based on reductions in hours (intensive margin) and close to the German experience, and the other assuming extensive margin adjustments that take place through layoffs (close to the US situation). Our results suggest that the distributional and fiscal consequences are less severe when labor demand reacts along the intensive margin.

Suggested Citation

  • Olivier Bargain & Herwig Immervoll & Andreas Peichl & Sebastian Siegloch, 2010. "Distributional consequences of labor demand adjustments to a downturn : a model-based approach with application to Germany 2008-09," Working Papers 201030, School of Economics, University College Dublin.
  • Handle: RePEc:ucn:wpaper:201030
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10197/2664
    File Function: First version, 2010
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Wagstaff, Adam, 2009. "Correcting the concentration index: A comment," Journal of Health Economics, Elsevier, vol. 28(2), pages 516-520, March.
    2. Erreygers, Guido, 2009. "Correcting the Concentration Index: A reply to Wagstaff," Journal of Health Economics, Elsevier, vol. 28(2), pages 521-524, March.
    3. Oaxaca, Ronald, 1973. "Male-Female Wage Differentials in Urban Labor Markets," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 14(3), pages 693-709, October.
    4. Burkhauser, Richard V. & Cawley, John, 2008. "Beyond BMI: The value of more accurate measures of fatness and obesity in social science research," Journal of Health Economics, Elsevier, vol. 27(2), pages 519-529, March.
    5. Philip Clarke & Tom Van Ourti, 2009. "Correcting the Bias in the Concentration Index when Income is Grouped," CEPR Discussion Papers 599, Centre for Economic Policy Research, Research School of Economics, Australian National University.
    6. Ljungvall, Åsa & Gerdtham, Ulf-G., 2010. "More equal but heavier: A longitudinal analysis of income-related obesity inequalities in an adult Swedish cohort," Social Science & Medicine, Elsevier, pages 221-231.
    7. Smed, Sinne & Jensen, Jorgen D. & Denver, Sigrid, 2007. "Socio-economic characteristics and the effect of taxation as a health policy instrument," Food Policy, Elsevier, vol. 32(5-6), pages 624-639.
    8. Erreygers, Guido, 2009. "Correcting the Concentration Index," Journal of Health Economics, Elsevier, vol. 28(2), pages 504-515, March.
    9. Alan S. Blinder, 1973. "Wage Discrimination: Reduced Form and Structural Estimates," Journal of Human Resources, University of Wisconsin Press, vol. 8(4), pages 436-455.
    10. Ljungvall, Åsa & Gerdtham, Ulf-G., 2010. "More equal but heavier: A longitudinal analysis of income-related obesity inequalities in an adult Swedish cohort," Social Science & Medicine, Elsevier, pages 221-231.
    11. Xander Koolman & Eddy van Doorslaer, 2004. "On the interpretation of a concentration index of inequality," Health Economics, John Wiley & Sons, Ltd., vol. 13(7), pages 649-656.
    12. van Doorslaer, Eddy & Wagstaff, Adam & Bleichrodt, Han & Calonge, Samuel & Gerdtham, Ulf-G. & Gerfin, Michael & Geurts, Jose & Gross, Lorna & Hakkinen, Unto & Leu, Robert E., 1997. "Income-related inequalities in health: some international comparisons," Journal of Health Economics, Elsevier, vol. 16(1), pages 93-112, February.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Labor demand; Tax-benefit system; Crisis; Income distribution; Labor demand--Econometric models; Income distribution--Econometric models; Global Financial Crisis; 2008-2009; Financial crises--Germany;

    JEL classification:

    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
    • H60 - Public Economics - - National Budget, Deficit, and Debt - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ucn:wpaper:201030. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Nicolas Clifton). General contact details of provider: http://edirc.repec.org/data/educdie.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.