Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/46508
Authors: 
Bargain, Olivier
Immervoll, Herwig
Peichl, Andreas
Siegloch, Sebastian
Year of Publication: 
2011
Series/Report no.: 
CESifo working paper: Labour Markets 3403
Abstract: 
The distributional consequences of the recent economic crisis are still broadly unknown. While it is possible to speculate which groups are likely to be hardest-hit, detailed distributional studies are still largely backward-looking due to a lack of real-time microdata. This paper studies the distributional and fiscal implications of output changes in Germany 2008-09, using data available prior to the economic downturn. We first estimate labor demand on 12 years of detailed, administrative matched employer-employee data. The distributional analysis is then conducted by transposing predicted employment effects of actual output shocks to household-level microdata. A scenario in which labor demand adjustments occur at the intensive margin (hour changes), close to the German experience, shows less severe effects on income distribution compared to a situation where adjustments take place through massive layoffs. Adjustments at the intensive margin are also preferable from a fiscal point of view. In this context we discuss the cushioning effect of the tax-benefit system and the conditions under which German-style work-sharing policies can be successful in other countries.
Subjects: 
labor demand
output shock
tax-benefit system
crisis
income distribution
JEL: 
D58
J23
H24
H60
Document Type: 
Working Paper

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