Did the Hartz Reforms Speed-Up Job Creation? A Macro-Evaluation Using Empirical Matching Functions
University of Paderborn; Institute for the Study of Labor (IZA)
Institute for the Study of Labor (IZA); University of St. Gallen
IZA Discussion Paper No. 2470
Starting in January 2003, Germany implemented the first two so-called Hartz reforms, followed by the third and fourth packages of Hartz reforms in January 2004 and January 2005, respectively. The aim of these reforms was to accelerate labor market flows and reduce unemployment duration. Without attempting to evaluate the specific components of these Hartz reforms, this paper provides a first attempt to evaluate the overall effectiveness of the first two reform waves, Hartz I/II and III, in speeding up the matching process between unemployed and vacant jobs. The analysis is conceptually rooted in the flow-based view underlying the reforms, estimating the structural features of the matching process. The results indicate that the reforms indeed had an impact in making the labor market more dynamic and accelerating the matching process.
Number of Pages in PDF File: 37
Keywords: empirical matching function, stock-flow matching, Hartz reform
JEL Classification: J6, J63, J64, J65working papers series
Date posted: December 10, 2006
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