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Simulation of an application of the Hartz-IV reform in Austria

Michael Fuchs, Katarina Hollan and Katrin Gasior
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Michael Fuchs: European Centre for Social Welfare Policy and Research, 1090 Wien, Austria
Katarina Hollan: European Centre for Social Welfare Policy and Research, 1090 Wien, Austria
Katrin Gasior: Institute for Social and Economic Research, University of Essex, United Kingdom

Public Sector Economics, 2017, vol. 41, issue 4, 479-500

Abstract: This paper examines the application of the German Hartz-IV model in Austria. If the Hartz-IV reform were to be transferred to Austria, this would imply that instead of unemployment assistance (Notstandshilfe), the social-assistance-type minimum income benefit (Bedarfsorientierte Mindestsicherung) would be follow-up assistance after unemployment benefit expires. The analysis is carried out using the tax-benefit microsimulation models EUROMOD and SORESI based on the latest EU-SILC 2015 data for Austria. We simulate a baseline scenario according to the minimum income benefit regulations of the nine Federal States for the year 2017 and a scenario including a proxy for an asset check of capital income. In addition, following current political discussions and developments, we simulate a ceiling scenario, in which the sum of minimum standards per household is capped at EUR 1,500 per month. The direct (monetary) effects of the potential reform are analysed on three levels: fiscal implications; number of receiving households including socio-demographic characteristics; income distribution and risk of poverty.

Keywords: social assistance; public expenditure; household income; Austria; microsimulation (search for similar items in EconPapers)
JEL-codes: D31 H53 I32 I38 (search for similar items in EconPapers)
Date: 2017
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