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Distributional and Behavioural Effects of the German Labour Market Reform

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  • Clauss, Markus
  • Schnabel, Reinhold

Abstract

We estimate the effects of the reform of the German Unemployment Insurance that replaced the wage related Unemployment Assistance with an income maintenance program and stronger means testing. We model the tax-benefit system and use the Socio-Economic Panel. We estimate a discrete labour supply model and simulate the behavioural and distributional effects using the pseudo-distribution method. Poverty and inequality decline overall, since households with children and low income gain, while those who used to earn high wages and received high unemployment transfers lose most. The behavioural responses mitigate the redistributive impact of the reform.

Suggested Citation

  • Clauss, Markus & Schnabel, Reinhold, 2008. "Distributional and Behavioural Effects of the German Labour Market Reform," ZEW Discussion Papers 08-006, ZEW - Leibniz Centre for European Economic Research.
    • Handle: RePEc:zbw:zewdip:7017
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    Cited by:

    1. Bargain, Olivier B. & Orsini, Kristian & Peichl, Andreas, 2011. "Labor Supply Elasticities in Europe and the US," IZA Discussion Papers 5820, Institute of Labor Economics (IZA).
    2. Bräuninger, Michael & Michaelis, Jochen & Sode, Madlen, 2013. "10 Jahre Hartz-Reformen," HWWI Policy Papers 73, Hamburg Institute of International Economics (HWWI).
      • Michael Bräuninger & Jochen Michaelis & Madlen Sode, 2013. "10 Jahre Hartz-Reformen," MAGKS Papers on Economics 201318, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    3. Clauss, Markus & Schubert, Stefanie, 2009. "The ZEW combined microsimulation-CGE model: innovative tool for applied policy analysis," ZEW Discussion Papers 09-062, ZEW - Leibniz Centre for European Economic Research.
    4. Olivier Bargain & Kristian Orsini & Andreas Peichl, 2012. "Comparing Labor Supply Elasticities in Europe and the US: New Results," Working Papers halshs-00805736, HAL.
    5. Norbert Berthold & Mustafa Coban, 2014. "Kombilöhne gegen Erwerbsarmut: Warum die USA erfolgreicher sind als Deutschland," Wirtschaftsdienst, Springer;ZBW - Leibniz Information Centre for Economics, vol. 94(2), pages 118-124, February.
    6. Michael Christl & Silvia Poli, 2021. "Trapped in inactivity? Social assistance and labour supply in Austria," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 48(3), pages 661-696, August.
    7. Merda, Meiko & Braeseke, Grit & Dreher, Birger & Bauer, Thomas K. & Mennicken, Roman & Otten, Sebastian & Scheuer, Markus & Stroka, Magdalena A. & Talmann, Anna E. & Braun, Helmut, 2012. "Chancen zur Gewinnung von Fachkräften in der Pflegewirtschaft: Kurzfassung. Studie im Auftrag des Bundesministeriums für Wirtschaft und Technologie," RWI Projektberichte, RWI - Leibniz-Institut für Wirtschaftsforschung, number 72586.
    8. Olivier Bargain & Kristian Orsini & Andreas Peichl, 2014. "Comparing Labor Supply Elasticities in Europe and the United States: New Results," Journal of Human Resources, University of Wisconsin Press, vol. 49(3), pages 723-838.

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    More about this item

    Keywords

    distribution analysis; household labour supply; microsimulation; poverty; Germany;
    All these keywords.

    JEL classification:

    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • I32 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Measurement and Analysis of Poverty
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution

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