Accounting for labor demand effects in structural labor supply models


Peichl, Andreas ; Siegloch, Sebastian



URL: http://ftp.iza.org/dp5350.pdf
Additional URL: https://ssrn.com/abstract=1720332
Document Type: Working paper
Year of publication: 2010
The title of a journal, publication series: IZA Discussion Papers
Volume: 5350
Place of publication: Bonn
Publishing house: Forschungsinstitut zur Zukunft der Arbeit (IZA)
Publication language: English
Institution: School of Law and Economics > VWL, Quantitative Finanzwissenschaft (Peichl 2013-2017)
School of Law and Economics > VWL, Soziale Sicherung (Siegloch 2018-)
Subject: 330 Economics
Classification: JEL: J22 , J23 , J68,
Keywords (English): labor supply , labor demand , policy reform , workfare
Abstract: When assessing the effects of policy reforms on the labor market, most studies only focus on labor supply. The interaction of supply and demand side is not explicitly modeled, which might lead to biased estimates of potential labor market outcomes. This paper proposes a straightforward method to remedy this shortcoming. We use information on firms' labor demand behavior and feed them into a structural labor supply model, completing the partial analysis of the labor market on the microdata level. We show the performance and relevance of our extension by introducing a pure labor supply side reform, the workfare concept, in Germany and simulating the labor market outcome of the reform. We find that demand effects offset about 25 percent of the positive labor supply effect of the policy reform.

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




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Peichl, Andreas ; Siegloch, Sebastian (2010) Accounting for labor demand effects in structural labor supply models. IZA Discussion Papers Bonn 5350 [Working paper]


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