Comment on ‘‘Unemployment Compensation and Wages: Evidence from the German Hartz Reforms’’ by Stefan Arent and Wolfgang Nagl

Johannes Ludsteck and Seth Stefan ()
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Seth Stefan: Regensburger Str. 102, 90478 Nürnberg, Germany

Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), 2014, vol. 234, issue 5, 635-644

Abstract: Arent and Nagl (2013) use the BA Employment panel 1998-2007 to identify effects of the German Hartz reform and find that it caused a considerable reduction of wages. Our replication study suggests that their clear and strong conclusions are based on implausible assumptions regarding the error structure of their regression models and on a too coarse modelling of the time effects. They become blurred and weak once better estimates of the standard errors are obtained and the development of wages is investigated at a finer time grid. Furthermore, Arent and Nagl’s reform effects shrink considerably when a more appropriate price index is used to deflate the wages and when the censoring of wages is treated correctly. Methodological considerations suggest that their conclusions depend on several further daring and untested assumptions.

Keywords: Hartz reforms; unemployment compensation; wages (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (3)

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Working Paper: Comment on "Unemployment Compensation and Wages: Evidence from the German Hartz Reforms" by Stefan Arent and Wolfgang Nagl (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:jns:jbstat:v:234:y:2014:i:5:p:635-644

DOI: 10.1515/jbnst-2014-0504

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