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Christian MERKL (Friedrich-Alexander Universität Erlangen-Nürnberg ) “Hartz IV and the Decline of German Unemployment: A Macroeconomic Evaluation”

September 17, 12:15 pm - 1:30 pm

Time: 12:15pm – 13:30 pm
Date: 20th of September 2018
Place: Room 3001

Christian MERKL (Friedrich-Alexander Universität Erlangen-Nürnberg ) “Hartz IV and the Decline of German Unemployment: A Macroeconomic Evaluation”

Abstract : This paper proposes a new approach to evaluate the macroeconomic effects of the Hartz IV reform in Germany, which reduced the generosity of long-term unemployment benefits. We propose a model with different unemployment durations, where the reform initiates both a partial effect and an equilibrium effect. The relative importance of these two effects and the size of the partial effect are estimated based on the IAB Job Vacancy Survey. Our novel methodology provides a solution for the existing disagreement in the macroeconomic literature on Hartz IV. We find that Hartz IV was a major driver for the decline of Germany’s unemployment. In addition, we contribute to the literature on partial and equilibrium effects of unemployment benefit changes.

 

Details

Date:
September 17
Time:
12:15 pm - 1:30 pm
Event Categories:
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Organizers

Edouard CHALLE
Julien PRAT