Analysing Welfare Reform in a Microsimulation-AGE Model: The Value of Disaggregation


Arntz, Melanie ; Boeters, Stefan ; Gürtzgen, Nicole ; Schubert, Stefanie


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URL: http://ub-madoc.bib.uni-mannheim.de/1460
URN: urn:nbn:de:bsz:180-madoc-14607
Document Type: Working paper
Year of publication: 2006
Publication language: English
Institution: Sonstige Einrichtungen > ZEW - Leibniz-Zentrum für Europäische Wirtschaftsforschung
MADOC publication series: Veröffentlichungen des ZEW (Leibniz-Zentrum für Europäische Wirtschaftsforschung) > ZEW Discussion Papers
Subject: 330 Economics
Classification: JEL: J51 J22 D58 ,
Subject headings (SWD): Mikrosimulation , Sozialhilfe , Reform , Tarifverhandlung , Arbeitsmarkt
Keywords (English): applied general equilibrium , discrete working time choice , labour market , wage bargaining , labour market reform , logit model , microsimulation
Abstract: We present a combined, consistent microsimulation-AGE model that uses the labour market model PACE-L, data from the German Socio-Economic Panel and a discrete choice labour supply estimation. The model is used to analyse a reform that cuts the social assistance minimum income and lowers the transfer withdrawal rate in order to encourage labour force participation at the lower end of the wage distribution. We compare a disaggregated and an aggregated version of the model as well as a partial and a general equilibrium variant. It turns out that both disaggregation and general equilibrium feedback tend to mitigate the labour supply response to the reform proposal. While some labour supply indicators react quite sensitively to the level of aggregation, most macroeconomic variables are considerably more robust.
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Arntz, Melanie ; Boeters, Stefan ; Gürtzgen, Nicole ; Schubert, Stefanie (2006) Analysing Welfare Reform in a Microsimulation-AGE Model: The Value of Disaggregation. Open Access [Working paper]
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