Agenda 2020: Strategies to Achieve Full Employment in Germany

This strategy paper by the Institute for the Study of Labor (IZA) shows ways in which Germany once more can attain full employment in the coming decade. Much of what the previous government's "Agenda 2010" has put into motion has clearly steered labor market development in the right direction. The reforms are one of the main reasons why Germany has been more resistant to the recent financial and economic crisis than other countries. While these achievements should not be called into question, further action is necessary. The IZA concept includes the following elements: (1) Education reform: Early childhood education must be improved. Social background should no longer determine future career prospects. More independence and competition between schools and universities would improve the quality of education. Selection of students into different secondary school tracks should occur at a higher age. The dual system of apprenticeship training could be shortened. College tuition fees could be replaced by a graduate tax. (2) Welfare state reform: A consistent implementation of the principle of reciprocity would create additional employment incentives and make working for a living worthwhile again even for the low-skilled. Workfare is socially just and promotes independence rather than producing dependency. Child benefits should be granted primarily as vouchers. (3) Job placement reform: The problem groups of the labor market need one-stop support tailored to their individual needs as soon as they become unemployed. IZA proposes the creation of job centers that act independently from local and federal authorities in order to avoid the organizational maze of unclear responsibilities. (4) Immigration policy reform: Germany needs high-skilled immigrants to cope with demographic change and skilled labor shortages. A selection system for permanent immigrants and a market-based solution for temporary immigrants would substantially increase the economic benefits of immigration and create additional momentum for the realization of full employment.labor market policy, Agenda 2010, Hartz reforms, workfare, job center, education, demography, migration policy

Mehr und bessere Daten für die Arbeitsmarktforschung: Vorschläge zur effizienten Erschließung der amtlichen Statistik

Die ökonomische Beurteilung von Vorgängen auf dem Arbeitsmarkt erfordert eine solide und aussagekräftige Datengrundlage. Eine Kerngröße zu deren Verständnis bilden Stundenlöhne. Stundenlöhne erklären beispielsweise, ob und in welchem Umfang Menschen arbeiten und konsumieren, warum und wie lange sie arbeitslos bleiben und wie viel sie in Bildung investieren. Stundenlöhne erklären darüber hinaus, in welchem Umfang Firmen Menschen entlassen oder einstellen, für welchen Standort sie sich entscheiden und welche Form der Spezialisierung für sie optimal ist. Nicht zuletzt sind Stundenlöhne von erheblicher Bedeutung für die Beantwortung von Verteilungsfragen. Umso erstaunlicher mutet es daher an, dass seitens der amtlichen Statistik für diesen zentralen Bereich der Wirtschaft bislang keine hinreichende Datengrundlage bereitgestellt wird. Das ließe sich mit relativ geringem Aufwand ändern. Dazu bedarf es jedoch letztlich der Unterstützung durch den Gesetzgeber. Dies betrifft zum einen die Konzeption amtlicher Erhebungen und zum anderen die Schaffung einer gesetzlichen Grundlage für die Verknüpfung von amtlichen Mikrodaten zu wissenschaftlichen Zwecken.Lohn, Dateninfrastruktur, amtliche Statistik, Mikrodaten

Sind ARGEn wirklich besser? Anmerkungen zur Evaluation der Betreuungsorganisation im Bereich der Grundsicherung

Mit der Einführung von Arbeitslosengeld II wurde auch die behördliche Zuständigkeit für die Grundsicherung einer grundlegenden Reorganisation unterzogen. Während in der überwiegenden Mehrheit der Kommunen in Form der sogenannten Arbeitsgemeinschaften eine Mischverwaltung aus Bundesagentur für Arbeit und örtlichen Kommunen geschaffen wurde, wurde den sogenannten Optionskommunen eine eigenständige Verwaltung zugestanden. Die Verwaltungspraxis sollte zeigen, welche von beiden Verwaltungsformen die effektivere Betreuung von erwerbsfähigen Bedürftigen gewährleistet. Deshalb legte der Gesetzgeber fest, dass beide Verwaltungsformen bis Ende 2008 evaluiert werden sollten. In dem entsprechenden Evaluationsbericht des Bundesministeriums für Arbeit und Soziales wird festgestellt, dass die Arbeitsgemeinschaften im Großen und Ganzen besser abschneiden als die Optionskommunen. Das vorliegende Papier setzt sich kritisch mit diesem Bericht auseinander. Es zeigt, dass das verwendete Untersuchungsdesign keine eindeutigen Schlussfolgerungen zulässt. Paradoxerweise könnten die vordergründig für die Arbeitsgemeinschaften sprechenden Ergebnisse sogar ein Beleg dafür sein, dass in Wahrheit die Optionskommunen effektiver arbeiten.Hartz-Reform, Evaluation, Sozialhilfe, Grundsicherung, Soziale Sicherung

Kommunale Arbeitsmarktpolitik - Verschiebebahnhof oder Ausweg aus der Sozialhilfeabhängigkeit?

Due to an increasing fiscal burden by welfare payments, municipalities tend more and more to initiate employment and training programs under their own responsibility besides the Federal Labor Agency. However, critics object that this might predominantly be viewed as an attempt to shift fiscal burdens to the Federal Labor Agency rather than a policy option towards labor market integration of low-wage workers. In order to investigate this issue, the IWH carried out a country-wide survey within twelve municipalities and rural districts. The sample comprises 200 employable welfare recipients, among them participants of labor market programs as well as a reference group of non-participants. The results of the IWH welfare survey are at best suggesting a moderate success of program participation with regard to labor market integration. Nevertheless, the programs appear to be profitable for municipalities, since they succeed in bringing participants out of welfare dependency. In many cases, however, welfare is replaced by unemployment support, which means that only the fiscal responsibility changes. A shortcoming of the results has to be seen in the fact that municipalities tend to assign especially those people for program participation, who are already better fitting into requirements of the labor market. This seriously impairs the comparability of participants and non-participants. In view of the remarkable amount of expenditures it seems therefore advisable to put more attention on the effectiveness of the programs than has been done in the past. This could be achieved by a stronger orientation towards an experimental design of assignment for program participation.

Documentation IZAΨMOD: The IZA Policy SImulation MODel

This paper describes IZAΨMOD, the policy microsimulation model of the Institute for the Study of Labor (IZA). The model uses household microdata from the German Socio-Economic Panel Study and firm data from the German linked employer-employee dataset LIAB. IZAΨMOD consists of three components: First, a static module simulates the effects of a tax reform on the budget of the individual households. Secondly, behavioral labor supply responses are estimated. The third component distinguishes our model from most other microsimulation tools. A demand module takes into account possible restrictions of labor demand and identifies the partial equilibrium of the labor market after the supply reactions.IZAΨMOD, microsimulation, tax and benefit systems, labor demand

Does Size Matter? The Impact of Changes in Household Structure on Income Distribution in Germany

Income inequality in Germany has been continuously increasing during the past 20 years. In general, this is understood as an increase in inequality of wages due to changes in bargaining power of employees. However, the role of changing household structure is widely neglected. Societal trends like a decline in birth rate and an increase in the risk of divorce affect per capita incomes, which has repercussions for the income distribution even if wages remain constant. The aim of this paper is to quantify the proportion of changing household structures in the increase in inequality. We find that the rise in inequality was indeed more due to changes of household structure and employment behavior rather than changes in wages. Moreover, a large part of this increase is compensated by the welfare state.income distribution, demography, household size, decomposition, Germany

Kommunale Arbeitsmarktpolitik - Verschiebebahnhof oder Ausweg aus der Sozialhilfeabhängigkeit?

Due to an increasing fiscal burden by welfare payments, municipalities tend more and more to initiate employment and training programs under their own responsibility besides the Federal Labor Agency. However, critics object that this might predominantly be viewed as an attempt to shift fiscal burdens to the Federal Labor Agency rather than a policy option towards labor market integration of low-wage workers. In order to investigate this issue, the IWH carried out a country-wide survey within twelve municipalities and rural districts. The sample comprises 200 employable welfare recipients, among them participants of labor market programs as well as a reference group of non-participants. The results of the IWH welfare survey are at best suggesting a moderate success of program participation with regard to labor market integration. Nevertheless, the programs appear to be profitable for municipalities, since they succeed in bringing participants out of welfare dependency. In many cases, however, welfare is replaced by unemployment support, which means that only the fiscal responsibility changes. A shortcoming of the results has to be seen in the fact that municipalities tend to assign especially those people for program participation, who are already better fitting into requirements of the labor market. This seriously impairs the comparability of participants and non-participants. In view of the remarkable amount of expenditures it seems therefore advisable to put more attention on the effectiveness of the programs than has been done in the past. This could be achieved by a stronger orientation towards an experimental design of assignment for program participation.

Does Size Matter? The Impact of Changes in Household Structure on Income Distribution in Germany

In Germany, two observations can be made over the past 20 years: First, income inequality has been constantly increasing while, second, the average household size has been declining dramatically. The analysis of income distribution relies on equivalence-weighted incomes which take into account household size. Therefore, there is an obvious link between these two developments. The aim of the paper is to quantify how the trend towards smaller households has influenced the change in income distribution. In order to do so, we are using a decomposition of changes in inequality measures over time allowing for a separation between wage and demographic effects respectively. We propose similar decompositions for the change in poverty and richness as well and compare them with results that were obtained by a re-weighting procedure. Our results show that the income gap would also have increased without the demographic trend. But its level would be lower than it actually is. In addition, the demographic effect turns out to be larger for incomes before tax and benefits.Germany, decomposition, household size, demography, income distribution

Report No. 14: Gutachten zur Erwerbstätigenentwicklung in Deutschland: Erstmals mehr als 40.000.000 Erwerbstätige

Kurzgutachten im Auftrag der Initiative Neue Soziale Marktwirtschaft, Bonn 2007 (11 Seiten)