Reforming Social Welfare as We Know It? A Microsimulation Study for Germany

Social assistance and unemployment assistance, which provide means tested income support (social welfare) without pre-specified time limits, are viewed as one important reason for the persistently high level of unemployment in Germany by many economists. In order to increase work incentives and, at the same time, reduce social expenditures there have been various proposals to reform social welfare in the recent German policy debate. We analyse a specific reform proposal with the following components: (i) an integration of unemployment assistance and social assistance; (ii) a substantial reduction of the social assistance level for ?employable? persons who choose not to work; (iii) improved incentives to take up work by a combination of a reduction of the social assistance withdrawal rate and an earnings-related tax credit. The expected employment and fiscal effects of this welfare reform proposal are simulated on the basis of an econometrically estimated partialequilibrium labour supply/demand model embedded in a detailed tax-benefit microsimulation model. We find that the reductions in net social expenditures may be substantial, although the expected labour supply and employment effects of this reform are much smaller than is typically assumed by contributors to recent discussions on the potential labour market effects of welfare reforms in Germany. Furthermore, these employment gains come at the cost of a substantial expansion of public-works jobs. --

New technologies and the demand for medium qualified labour in Germany

The literature on skill-biased technological change concentrates on highly skilled and unskilled employees. It is unclear, however, if the employment opportunities of the majority of the labour force in Germany-employees with a degree from the dual apprenticeship system-increase or not. In addition, estimation and data problems are addressed in a topical and rich data set. The paper shows that innovation expenditures and investments in information and communication technologies lead to lower medium skilled employee shares, whereas other investments lead to higher shares. --Dual apprenticeship system,qualification demand,innovation,CLAD,SCLS

Linked Employer-Employee Data from the IAB : LIAB Cross-sectional Model 2 1993-2008 (LIAB QM2 9308)

"This FDZ Datenreport describes the LIAB Cross-sectional Model 2 1993-2008 (LIAB QM2 9308), which is one of the linked employer-employee datasets from the Institute for Employment Research (IAB) provided for research analyses by the Research Data Centre (FDZ) of the Federal Employment Agency (BA) at the IAB. The Linked Employer-Employee Data from the IAB (LIAB) contain both establishment data from the annual waves of the IAB Establishment Panel and information on individuals from the process-generated data of the BA. The LIAB data are generated by linking these two data sources. The Datenreport on the LIAB QM2 9308 is structured as follows. Besides the introduction, Chapter 1 contains information on data access as well as an outline of the data, the volume structure and a list of variables. A description of the individual data sources can be found in Chapter 2. Data preparation and data quality are discussed in Chapters 3 and 4, whilst the individual variables are described in Chapter 5." (Author's abstract, IAB-Doku) ((en)) Additional Information German version Frequencies and labelsIAB-Linked-Employer-Employee-Datensatz, Datenaufbereitung, Datenorganisation, Datenzugang, Datenqualität, Datensatzbeschreibung

Occupational upgrading and the business cycle in West Germany

"The occupational skill structure depends on the business cycle if employers respond to shortages of applicants during upturns by lowering their hiring standards. The notion and relevance of hiring standards adjustment was advanced by Reder (1955) and investigated formally in a search-theoretic framework by Mortensen (1970). Devereux (2002) implements empirical tests for these theories and finds affirmative evidence for the U.S labour market. We replicate his analysis using German employment register data. Regarding the occupational skill composition we obtain somewhat lower but qualitatively similar responses to the business cycle despite of well known institutional differences between the U.S. and German labour market. The responsiveness of occupational composition wages to the business cycle is considerably lower in Germany." (Author's abstract, IAB-Doku) ((en))Konjunkturabhängigkeit, berufliche Qualifikation, Qualifikationsanforderungen, Personalanpassung, Personaleinstellung, Lohnhöhe, Geschlechterverteilung

How to use data swapping to create useful dummy data for panel datasets

"Many research data centres (RDCs) provide access to micro data by means of onsite use and remote execution of programs. An efficient usage of these modes of data access requires the researchers to have dummy data, which allows them to familiarize with the real data. These dummy data must be anonymous and look the same as the original data, but they do not have to render valid results. For complex datasets such as panel data or linked data, the creation of useful dummy data is not trivial. In this paper we suggest to use data swapping with constraints in order to keep some consistency and correlation between variables within crosssections and over time. It is easy to be implemented even for datasets with many variables and many survey waves." (Author's abstract, IAB-Doku) ((en))Prüfverfahren, Datenzugang, Datenaufbereitung - Test, IAB-Betriebspanel, Panel, IAB-Betriebs-Historik-Panel

Dokumentation des Steuer-Transfer-Mikrosimulationsmodells STSM

Das Steuer-Transfer-Mikrosimulationsmodell STSM ist ein statisches Mikrosimulationsmodell zur empirischen Analyse der Auswirkungen von Steuern, Sozialabgaben und Sozialtransfers auf Einkommen und Erwerbstätigkeit privater Haushalte in Deutschland. Die Datenbasis ist das Sozioökonomische Panel (SOEP) des Deutschen Instituts für Wirtschaftsforschung (DIW) Berlin. Das STMS integriert ein ökonometrisch geschätztes Arbeitsangebotsmodell und ein Simulationsmodell des deutschen Steuer- und Transfersystems. Das STMS ist in der Statistiksoftware STATA programmiert, die auch zur Schätzung des integrierten Arbeitsangebotsmodells verwendet wurde

Reforming Social Welfare as We Know it? A Microsimulation Study for Germany

Social assistance and unemployment assistance, which provide means tested income support (social welfare) without pre-specified time limits, are viewed as one important reason for the persistently high level of unemployment in Germany by many economists. In order to increase work incentives and, at the same time, reduce social expenditures there have been various proposals to reform social welfare in the recent German policy debate. We analyse a specific reform proposal with the following components: (i) an integration of unemployment assistance and social assistance; (ii) a substantial reduction of the social assistance level for employable persons who choose not to work; (iii) improved incentives to take up work by a combination of a reduction of the social assistance withdrawal rate and an earnings-related tax credit. The expected employment and fiscal effects of this welfare reform proposal are simulated on the basis of an econometrically estimated partialequilibrium labour supply/demand model embedded in a detailed tax-benefit microsimulation model. We find that the reductions in net social expenditures may be substantial, although the expected labour supply and employment effects of this reform are much smaller than is typically assumed by contributors to recent discussions on the potential labour market effects of welfare reforms in Germany. Furthermore, these employment gains come at the cost of a substantial expansion of public-works jobs

Strike activity and centralisation in wage setting

We test the theoretical claim that coordination and centralisation in wage setting reduce strike activity by estimating nonlinear regression models using a dataset of 17 OECD countries for the period 1972-2000. We find moderating effects of coordination on strike activity but the effects are not stable over time. Several means are employed to check for the robustness of our results. We compute bootstrapped standard errors, conduct nonlinear median regressions. A remaining problem of the study is that we cannot control completely for country-specific heterogeneity in the estimates of coordination and centralisation effects

Dokumentation des Steuer-Transfer-Mikrosimulationsmodells STSM: Version 1995 - 1999

Das Steuer-Transfer-Mikrosimulationsmodell STSM ist ein statisches Mikrosimulationsmodell zur empirischen Analyse der Auswirkungen von Steuern, Sozialabgaben und Sozialtransfers auf Einkommen und Erwerbstätigkeit privater Haushalte in Deutschland. Die Datenbasis ist das Sozioökonomische Panel (SOEP) des Deutschen Instituts für Wirtschaftsforschung (DIW) Berlin. Das STMS integriert ein ökonometrisch geschätztes Arbeitsangebotsmodell und ein Simulationsmodell des deutschen Steuer- und Transfersystems. Das STMS ist in der Statistiksoftware STATA programmiert, die auch zur Schätzung des integrierten Arbeitsangebotsmodells verwendet wurde

Strike activity and centralisation in wage setting

"We test the theoretical claim that coordination and centralisation in wage setting reduce strike activity by estimating nonlinear regression models using a dataset of 17 OECD countries for the period 1972-2000. We find moderating effects of coordination on strike activity but the effects are not stable over time. Several means are employed to check for the robustness of our results. We compute bootstrapped standard errors, conduct nonlinear median regressions. A remaining problem of the study is that we cannot control completely for country-specific heterogeneity in the estimates of coordination and centralisation effects." (author's abstract)Der Beitrag untersucht die theoretische Behauptung, dass Koordinierung und Zentralisierung bei Lohnabkommen Streikaktivitäten reduziert, mit Hilfe einer Schätzmethode, die sich nichtlinearer Regressionsmodelle bedient. Als Datenbasis dienen Daten aus 17 OECD-Ländern für den Zeitraum 1972-2000. Es werden mäßigende Auswirkungen von Koordinierung auf Streikaktivitäten ermittelt, aber die Effekte sind nicht über die ganze Zeit stabil. Verschiedene Instrumente werden eingesetzt, um die Belastbarkeit der Ergebnisse zu überprüfen. Dabei werden rechnergestützte standardisierte Fehleranalysen und nichtlineare Medianregressionen durchgeführt. Es bleibt ein Problem der Untersuchung, dass die länderspezifische Heterogenität bei der Abschätzung der Koordinierungs- und Zentralisierungseffekte nicht vollständig kontrolliert werden kann. (IAB