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Title:Incentives and complementarities of flexicurity PDF Logo
Authors:Brown, Alessio J. G.
Snower, Dennis J.
Issue Date:2009
Citation:[Series:] Kiel working paper [No.:] 1526 [Editor:] Kiel Inst. for the World Economy, Kiel
Series/Report no.:Kiel working paper 1526
Abstract:This paper analyses how and to which degree the Danish flexicurity concept and its various elements achieve the renowned Danish miracle by evaluating their unemployment and inequality effects and their complementarities. We develop a microfounded model of searching workers and firms, calibrate it to Germany and perform the policy experiment of implementing the full Danish flexicurity set of policies (low employment protection, high unemployment benefits and workfare). Our results show that implementing the Danish flexicurity concept in Germany would reduce unemployment and earnings inequality substantially. Furthermore our analysis illustrates that the Danish flexicurity policies have some apparent complementarities in Germany - the reduction of unemployment effect is nearly 40% greater when the policies are implemented in conjunction than in isolation.
Subjects:Flexicurity
workfare
firing costs
employment
unemployment
JEL:J64
J65
E24
J22
J32
Document Type:Working Paper
Appears in Collections:Kieler Arbeitspapiere, IfW
Publikationen von Forscherinnen und Forschern des IfW

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