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Unemployment compensation and unemployment duration - Evidence from the German Hartz IV reform

  • Kloß, Michael
  • Nagl, Wolfgang

In 2005, the unemployment compensation for long-term unemployed was reduced in Germany. We examine how this reform affected the transition probability to employment. Additionally, we inspect how this effect varies over unemployment duration. We estimate proportional hazard models using German administrative spell data. According to our results the reform has raised the transition probability of short-term unemployed. The effect is even higher, the longer the unemployment duration. However, the results for long-term unemployed are inconclusive.

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Paper provided by Verein für Socialpolitik / German Economic Association in its series Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order with number 79711.

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Date of creation: 2013
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Handle: RePEc:zbw:vfsc13:79711
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  1. repec:tpr:qjecon:v:105:y:1990:i:4:p:973-1002 is not listed on IDEAS
  2. Dlugosz, Stephan & Stephan, Gesine & Wilke, Ralf A., 2009. "Fixing the leak: unemployment incidence before and after the 2006 reform of unemployment benefits in Germany," ZEW Discussion Papers 09-079, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  3. Krause, Michael U. & Uhlig, Harald, 2011. "Transitions in the German labor market: Structure and crisis," Discussion Paper Series 1: Economic Studies 2011,34, Deutsche Bundesbank, Research Centre.
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  5. Kruppe, Thomas & Müller, Eva & Wichert, Laura & Wilke, Ralf A., 2007. "On the definition of unemployment and its implementation in register data : the case of Germany," FDZ Methodenreport 200703_en, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
  6. Arntz, Melanie & Wilke, Ralf A., 2006. "Unemployment duration in Germany: individual and regional determinants of local job finding, migration and subsidized employment," ZEW Discussion Papers 06-92, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  7. Sabine Klinger & Thomas Rothe, 2012. "The Impact of Labour Market Reforms and Economic Performance on the Matching of the Short‐term and the Long‐term Unemployed," Scottish Journal of Political Economy, Scottish Economic Society, vol. 59(1), pages 90-114, 02.
  8. Fahr, René & Sunde, Uwe, 2009. "Did the Hartz Reforms Speed-Up the Matching Process? A Macro-Evaluation Using Empirical Matching Functions," Munich Reprints in Economics 20482, University of Munich, Department of Economics.
  9. Dale T. Mortensen, 1977. "Unemployment insurance and job search decisions," Industrial and Labor Relations Review, ILR Review, Cornell University, ILR School, vol. 30(4), pages 505-517, July.
  10. Bruce D. Meyer, 1988. "Unemployment Insurance And Unemployment Spells," NBER Working Papers 2546, National Bureau of Economic Research, Inc.
  11. Eichhorst, Werner & Zimmermann, Klaus F, 2007. "And Then There Were Four... How Many (and Which) Measures of Active Labour Market Policy Do We Still Need?," CEPR Discussion Papers 6246, C.E.P.R. Discussion Papers.
  12. Matthias S. Hertweck & Oliver Sigrist, 2013. "The Aggregate Effects of the Hartz Reforms in Germany," SOEPpapers on Multidisciplinary Panel Data Research 532, DIW Berlin, The German Socio-Economic Panel (SOEP).
  13. Moffitt, Robert, 1985. "Unemployment insurance and the distribution of unemployment spells," Journal of Econometrics, Elsevier, vol. 28(1), pages 85-101, April.
  14. Scioch, Patrycja & Oberschachtsiek, Dirk, 2009. "Testing the importance of cleansing procedures for overlaps inadministrative data : first evidence for Germany," FDZ Methodenreport 200903_en, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
  15. Lancaster, Tony, 1979. "Econometric Methods for the Duration of Unemployment," Econometrica, Econometric Society, vol. 47(4), pages 939-56, July.
  16. Yannis Bilias & Roger Koenker, 2001. "Quantile regression for duration data: A reappraisal of the Pennsylvania Reemployment Bonus Experiments," Empirical Economics, Springer, vol. 26(1), pages 199-220.
  17. van den Berg, Gerard J, 1990. "Nonstationarity in Job Search Theory," Review of Economic Studies, Wiley Blackwell, vol. 57(2), pages 255-77, April.
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