Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/232038
Authors: 
Hochmuth, Brigitte
Kohlbrecher, Britta
Merkl, Christian
Gartner, Hermann
Year of Publication: 
2021
Series/Report no.: 
IHS Working Paper No. 31
Abstract: 
This paper proposes a new approach to evaluate the macroeconomic effects of the "Hartz IV" reform, which reduced the generosity of long-term unemployment benefits. We propose a model with different unemployment durations, where the reform initiates both a partial effect and an equilibrium effect. We estimate the relative importance of these two effects and the size of the partial effect based on the IAB Job Vacancy Survey. Our approach does not hinge on an external source for the decline in the replacement rate for long-term unemployed. We find that Hartz IV was a major driver for the decline of Germany's steady state unemployment and that partial and equilibrium effect were nearly of equal importance. In addition, we provide direct empirical evidence on labor selection, one potential dimension of recruiting intensity
Subjects: 
Unemployment benefits reform
search and matching
Hartz reforms
JEL: 
E24
E00
E60
Creative Commons License: 
https://creativecommons.org/licenses/by/4.0/
Document Type: 
Working Paper

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