Distributional and Behavioural Effects of the German Labour Market Reform

Markus Clauss and Reinhold Schnabel

No 08-006, ZEW Discussion Papers from ZEW - Leibniz Centre for European Economic Research

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.

Keywords: distribution analysis; household labour supply; microsimulation; poverty; Germany (search for similar items in EconPapers)
JEL-codes: D31 H31 I32 I38 J22 (search for similar items in EconPapers)
Date: 2008
New Economics Papers: this item is included in nep-cmp and nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Journal Article: Distributional and behavioural effects of the German labour market reform (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:zewdip:7017

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