Distributional and behavioural effects of the German labour market reform

Clauss, Markus ; Schnabel, Reinhold

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URL: http://ub-madoc.bib.uni-mannheim.de/1890
URN: urn:nbn:de:bsz:180-madoc-18905
Document Type: Working paper
Year of publication: 2008
The title of a journal, publication series: None
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: D31 I32 J22 H31 I38 ,
Subject headings (SWD): Distributionsplanung , Arbeitsangebot , Hausarbeit , Arbeitslosengeld , Geringfügige Beschäftigung , Neue Armut , Deutschland
Keywords (English): distribution analysis , household labour supply , microsimulation , poverty , Germany
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.
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