Distributional consequences of labor demand adjustments to a downturn: A model-based approach with application to Germany 2008-09


Bargain, Olivier ; Immervoll, Herwig ; Peichl, Andreas ; Siegloch, Sebastian



URL: https://www.diw.de/documents/publikationen/73/diw_...
Document Type: Working paper
Year of publication: 2010
The title of a journal, publication series: SOEP papers on Multidisciplinary Panel Data Research
Volume: 5220
Place of publication: Berlin
Publishing house: DIW
ISSN: 1864-6689
Publication language: English
Institution: School of Law and Economics > VWL, Soziale Sicherung (Siegloch 2018-)
School of Law and Economics > VWL, Quantitative Finanzwissenschaft (Peichl 2013-2017)
Subject: 330 Economics
Classification: JEL: D58 , J23 , H24 , H60,
Keywords (English): labor demand , tax-benefit system , crisis , income distribution
Abstract: Macro-level changes can have substantial effects on the distribution of resources at the household level. While it is possible to speculate about which groups are likely to be hardest- hit, detailed distributional studies are still largely backward-looking. This paper suggests a straightforward approach to gauge the distributional and fiscal implications of large output changes at an early stage. We illustrate the method with an evaluation of the impact of the 2008-2009 crisis in Germany. We take as a starting point a very detailed administrative matched employer-employee dataset to estimate labor demand and predict the effects of output shocks at a disaggregated level. The predicted employment effects are then transposed to household-level microdata, in order to analyze the incidence of rising unemployment and reduced working hours on poverty and inequality. We focus on two alternative scenarios of the labor demand adjustment process, one based on reductions in hours (intensive margin) and close to the German experience, and the other assuming extensive margin adjustments that take place through layoffs (close to the US situation). Our results suggest that the distributional and fiscal consequences are less severe when labor demand reacts along the intensive margin.

Dieser Datensatz wurde nicht während einer Tätigkeit an der Universität Mannheim veröffentlicht, dies ist eine Externe Publikation.




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Bargain, Olivier ; Immervoll, Herwig ; Peichl, Andreas ; Siegloch, Sebastian (2010) Distributional consequences of labor demand adjustments to a downturn: A model-based approach with application to Germany 2008-09. SOEP papers on Multidisciplinary Panel Data Research Berlin 5220 [Working paper]


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