Did the Hartz Reforms Speed-Up Job Creation? A Macro-Evaluation Using Empirical Matching Functions

37 Pages Posted: 10 Dec 2006

See all articles by Rene Fahr

Rene Fahr

University of Paderborn; IZA Institute of Labor Economics

Uwe Sunde

Ludwig Maximilian University of Munich

Date Written: November 2006

Abstract

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.

Keywords: empirical matching function, stock-flow matching, Hartz reform

JEL Classification: J6, J63, J64, J65

Suggested Citation

Fahr, Rene and Sunde, Uwe, Did the Hartz Reforms Speed-Up Job Creation? A Macro-Evaluation Using Empirical Matching Functions (November 2006). IZA Discussion Paper No. 2470. Available at SSRN: https://ssrn.com/abstract=950490

Rene Fahr

University of Paderborn ( email )

Warburger Str. 100
D-33098 Paderborn
Germany
+49 5251 60 3692 (Phone)

HOME PAGE: http://www.quantitative-cg.de

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany
+49 228 38 94 0 (Phone)
+49 228 38 94 510 (Fax)

Uwe Sunde (Contact Author)

Ludwig Maximilian University of Munich ( email )

Geschwister-Scholl-Platz 1
Munich, Bavaria 80539
Germany

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