The Aggregate Effects of the Hartz Reforms in Germany

42 Pages Posted: 23 Jan 2013

See all articles by Matthias S. Hertweck

Matthias S. Hertweck

University of Konstanz - Department of Economics

Oliver Sigrist

University of Basel

Date Written: January 1, 2013

Abstract

This paper quantifies the impact of the Hartz reforms on matching efficiency, using monthly SOEP gross worker flows (1983-2009). We show that, until the early 2000s, close to 60% of changes in the unemployment rate are due to changes in the inflow rate (job separation). On the contrary, since the implementation of the reforms in the mid-2000s, the importance of the outflow rate (job finding) has been steadily increasing. This indicates that matching efficiency has improved substantially in recent years. Results from an estimated matching function — pointing to efficiency gains of more than 20% — corroborate this finding.

Keywords: SOEP gross worker flows, Hartz reforms, matching efficiency, unemployment fluctuations

JEL Classification: E24, E32, J63, J64

Suggested Citation

Hertweck, Matthias S. and Sigrist, Oliver, The Aggregate Effects of the Hartz Reforms in Germany (January 1, 2013). SOEPpaper No. 532. Available at SSRN: https://ssrn.com/abstract=2205031 or http://dx.doi.org/10.2139/ssrn.2205031

Matthias S. Hertweck (Contact Author)

University of Konstanz - Department of Economics ( email )

Konstanz, D-78457
Germany

Oliver Sigrist

University of Basel ( email )

Petersplatz 1
Basel, CH-4003
Switzerland

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