The Hartz reforms, the German Miracle, and labor reallocation
Anja Bauer and
Ian King ()
European Economic Review, 2018, vol. 103, issue C, 1-17
We analyse the recent history of unemployment and labor reallocation in the German economy using a variant of Lucas and Prescott’s (1974) reallocation model, modified to include unemployment benefits, rest unemployment, and aggregate shocks. We focus on the implied effects of the Hartz reforms and the Great Recession in the model, and compare them with the corresponding movements in German data. We find that the model’s qualitative predictions for reallocation and unemployment correspond well with the observations. When we calibrate the model to assess its quantitative performance, however, we find that it significantly overestimates the changes of both reallocation and unemployment since the introduction of the Hartz reforms.
Keywords: Labor market reallocation; Unemployment; Policy; Hartz reforms (search for similar items in EconPapers)
JEL-codes: E24 E43 E65 J24 J62 J65 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7) Track citations by RSS feed
Downloads: (external link)
Full text for ScienceDirect subscribers only
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:eee:eecrev:v:103:y:2018:i:c:p:1-17
Access Statistics for this article
European Economic Review is currently edited by T.S. Eicher, A. Imrohoroglu, E. Leeper, J. Oechssler and M. Pesendorfer
More articles in European Economic Review from Elsevier
Bibliographic data for series maintained by Catherine Liu ().