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The fall in German unemployment: A flow analysis

Carrillo-Tudela, Carlos and Launov, Andrey and Robin, Jean-Marc (2021) 'The fall in German unemployment: A flow analysis.' European Economic Review, 132. p. 103658. ISSN 0014-2921

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In this paper we investigate the recent fall in unemployment, and the rise in part-time work and labour market participation among prime-aged Germans. We show that unemployment fell because the Hartz reforms induced a large fraction of the long-term unemployed to deregister as jobseekers. However, labour force participation actually increased because many female non-participants accepted low-paid, part-time jobs. Counterfactual simulations using estimated transition probabilities show that observed changes in the stocks of registered and unregistered unemployment after 2002 essentially resulted from changes in their outflows. These changes are also the main determinants of the dynamics of the stocks of marginal, contributing part-time and full-time employment after 2002. Yet the full decrease in registered male unemployment cannot be explained by the reforms alone.

Item Type: Article
Uncontrolled Keywords: Germany; Unemployment; Part-time work; Mini-jobs; Non-participation; Wage moderation; Hartz reforms
Divisions: Faculty of Social Sciences
Faculty of Social Sciences > Economics, Department of
SWORD Depositor: Elements
Depositing User: Elements
Date Deposited: 06 Dec 2021 11:29
Last Modified: 06 Jan 2022 14:18

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