Labor market policy evaluation with an agent-based model

I develop an agent-based computational economics (ACE) model with which I evaluate the aggregate impact of labor market policies. The findings are that government-financed training measures increase the outflow rate from unemployment to employment. Although the overall effect is positive this effect is achieved by reducing the outflow rate for those who do not receive subsidies. Furthermore, the outflow rate would have been downward-biased had one supposed a matching function that is exogenous to policies.Labor market policy evaluation; agent-based computational model; endogenous matching function; job displacement

Provisions of the welfare state: employment protection versus unemployment insurance

Employment protection and unemployment benefits are considered as the most prominent insurance devices for workers to protect themselves against the risk of unemployment. It occurs that societies either choose a high level of employment protection relative to unemployment benefits or vice versa. This paper explains where countries locate on this trade-off.employment protection, unemployment benefits, tradeoff, flexicurity, probabilistic voting model, Neugart

Labor market policy evaluation with an agent-based model

I develop an agent-based computational economics (ACE) model with which I evaluate the aggregate impact of labor market policies. The findings are that governmentfinanced training measures increase the outflow rate from unemployment to employment. Although the overall effect is positive this effect is achieved by reducing the outflow rate for those who do not receive subsidies. Furthermore, the outflow rate would have been downward-biased had one supposed a matching function that is exogenous to policies. -- Im Folgenden wird ein agenten-basiertes Modell entwickelt, mit dem die aggregierten Wirkungen von Arbeitsmarktpolitiken evaluiert werde können. Ein Resultat ist, dass die Subvention von Trainingsmaßnahmen die Übergangsrate von Arbeitslosigkeit in Beschäftigung erhöht. Obwohl der Gesamteffekt positiv ist, reduziert sich die Übergangsrate für all jene Arbeitslose, deren Ausgaben nicht subventioniert werden. Der Verdrängungseffekt ist bei einer plausiblen Parametrisierung des Modells in seiner Höhe ökonomisch relevant. Ferner wäre die Messung der Übergangsrate aus Arbeitslosigkeit in Beschäftigung nach unten verzerrt gewesen, hätte man in der Wirkungsanalyse angenommen, dass die Matching-Funktion exogen zu den Arbeitsmarktpolitiken ist.

Pensions with early retirement and without commitment

In this paper it is shown that more generous early retirement provisions as well as lower employment lead to lower steady state pension rates if governments weigh the welfare of the older persons relatively strongly. A relatively stronger weight on the welfare of the young reverses the results. The driving forces behind those findings are governments that cannot commit to pension policies and consequently take into account future governments' policies when maximizing electoral support from the currently young and old constituencies. -- In dem Beitrag wird gezeigt, dass Pensionssysteme mit generöseren Frühverrentungsregelungen sowie niedrigere Beschäftigungsquoten geringere Pensionen zur Folge haben, falls Regierungen die Wohlfahrt der Pensionäre stärker gewichten als die der jüngeren Generation. Gewichtet die jeweilige Regierung in ihrer Entscheidung über die Pensionspolitik die Wohlfahrt der jüngeren Generation stärker als die der älteren Generation, so kehrt sich das Ergebnis ins Gegenteil um. Die Ergebnisse beruhen im Wesentlichen auf der Annahme, dass die Pensionspolitiken heutiger Regierungen für zukünftige Regierungen nicht bindend sind. Im Bestreben um die maximale Zustimmung der heutigen Wählerschaft berücksichtigen Regierungen daher die Folgen der Pensionspolitiken nachfolgender Regierung auf die derzeit noch jüngere Generation.

Temporary work agencies and equilibrium unemployment. CES Germany & Europe Working Paper no. 02.6, 2002

A striking feature of OECD labor markets in the 1990s has been the very rapid increase of temporary agency work. We augment the equilibrium unemployment model as developed by Pissarides and Mortensen with temporary work agencies in order to focus on their role as matching intermediaries and to examine the aggregate impact on employment. Our model implies that the improvement in the matching efficiency of agencies led to the emergence and growth of temporary agency work. We also show that temporary agency work does not necessarily crowd out other jobs. In this paper we extend an equilibrium unemployment model, as in Diamond (1981), Mortensen (1982), and Pissarides (1990) with temporary agency work in order to focus on its role as a matching intermediary and its aggregate impact on employment

Sequential Teamwork in Competitive Environments: Theory and Evidence from Swimming Data

The aim of the paper is to assess whether there is free-riding in teams when team production is sequential and when there is competition between teams. This a common case, which, however, has not been considered in the literature so far. We develop a model where team members contributing earlier have an incentive to free-ride more even when there is competition between teams. These predictions are tested on more than 300.000 observations on swimmers’ performance at competitions from all over the world. We find that swimmers in relays perform weaker as compared to their individual performance, and that earlier swimmers’ performance in relays is weaker relative to later swimmers. Our results suggest that competition does not solve the free-riding problem in team production with sequential contributions.team production, contest, intergroup competition, sequential contribution, free-riding, swimming

Labor Market Regulation and the Legal System

When enacting labor market regulation governments face courts that interpret and implement the legal code. We show that the incentives for governments for labor market reform increase with the uncertainty that is involved in the implementation of legal codes through courts. Given that judges have more discretion in common as opposed to civil law systems more reform activity as a response to crises should be observed in the former system. This finding is backed by evidence from a panel of OECD countries.labor market regulation, labor courts, uncertainty, unemployment

Temporary work agencies and equilibrium unemployment

During the 1990s, temporary agency work has increased rapidly in most OECD countries. We augment the equilibrium unemployment model developed by Pissarides and Mortensen with temporary work agencies. Our model implies that technological improvements for placements and de-regulation of the sector caused the emergence and growth of temporary agency work. Simulations of a calibrated version of the model show that `temp' work does not necessarily crowd out other, regular jobs. -- Während der neunziger Jahre stieg der Anteil der Zeitarbeit gemessen an der Gesamtbeschäftigung in fast allen OECD Ländern stark an. Wir erweitern das von Pissarides und Mortensen entwickelte Arbeitsmarktmodell mit Zeitarbeit. Auf der Grundlage unseres Modells lässt sich zeigen, dass technologische Veränderungen in der Informations- und Kommunikationstechnologie und die Deregulierung der Zeitarbeit Aufkommen und Wachstum des Zeitarbeitssektors verursachten. Simulationen des kalibrierten Modells legen nahe, dass Zeitarbeit nicht notwendigerweise Normalarbeitsverhältnisse verdrängt.

Labor Market Regulation and the Legal System

When enacting labor market regulation governments face courts that interpret and implement the legal code. We show that the incentives for governments for labor market reform increase with the uncertainty that is involved in the implementation of legal codes through courts. Given that judges have more discretion in common as opposed to civil law systems more reform activity as a response to crises should be observed in the former system. This finding is backed by evidence from a panel of OECD countries.labor market regulation, labor courts, uncertainty, unemployment

Coalition Governments and Policy Reform with Asymmetric Information

With ideological parties being better informed about the state of the world than voters, the true motivation of policy proposals is hard to judge for the electorate. However, if reform proposals have to be agreed upon by coalition parties, it may become possible for the government to signal to the voters its private information about the necessity of reforms. Therefore, in coalition governments reforms will be more in line with policy requirements than in single-party governments. This is usually beneficial for the coalition parties as well as for the voter.Asymmetric information, coalition governments, policy reform