Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/28008
Authors: 
Boeters, Stefan
Feil, Michael
Year of Publication: 
2009
Series/Report no.: 
ZEW Discussion Papers 08-043 [rev.]
Abstract: 
Labour market reforms that are designed to stimulate labour supply at the lower end of the wage distribution can never be precisely restricted to affect only the target group. Spillovers to and feedback from other segments of the labour market are unavoidable and may counteract the direct effects of the reform. An adequate representation of heterogeneous labour markets becomes therefore an important issue for the assessment of reforms. We analyse the possible interactions between labour market segments in a combined, consistent microsimulation-AGE model with a flexible representation of substitution possibilities and different wage-forming regimes. We look at a stylised reform and find labour-demand cross-price elasticities between the low and medium skilled to be the main drivers of the results. Interaction with the high-skilled segment is less pronounced.
Subjects: 
Applied general equilibrium model
microsimulation
discrete working time choice
heterogeneous labour markets
labour market reform
JEL: 
D58
J22
J51
Document Type: 
Working Paper

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