Funding public health care: A flat-rate premium might be bad for employment

If "tax progression is good for employment in popular models of trade union behaviour" (Koskela and Vilmunen, 1996), then a flat-rate premium, as proposed as a means of funding for public health care, is bad. This note shows that replacing existing (proportional) social security contributions by a lump-sum payment increases labour costs and thus reduces employment. This result holds - for empirically relevant parameters - even in a more general case than the one considered by Koskela and Vilmunen. Policy advisers should be aware that in imperfect competitive labour markets the prima facie attractiveness of a flat-rate premium is not for sure.

Heterogeneous labour markets in a microsimulation-AGE model: application to welfare reform in Germany

Labour market reforms that are designed to stimulate labour supply at the lower end of the wage distribution can never be precisely restricted to affect only the target group. Spillovers to and feedback from other segments of the labour market are unavoidable and may counteract the direct effects of the reform. An adequate representation of heterogeneous labour markets becomes therefore an important issue for the assessment of reforms. We analyse the possible interactions between labour market segments in a combined, consistent microsimulation-AGE model with a flexible representation of substitution possibilities and different wage-forming regimes. We look at a stylised reform and find labour-demand cross-price elasticities between the low and medium skilled to be the main drivers of the results. Interaction with the high-skilled segment is less pronounced. --Applied general equilibrium model,microsimulation,discrete working time choice,heterogeneous labour markets,labour market reform

Heterogeneous labour markets in a microsimulation-AGE model : application to welfare reform in Germany

"Labour market reforms that are designed to stimulate labour supply at the lower end of the wage distribution can never be precisely restricted to affect only the target group. Spillovers to and feedback from other segments of the labour market are unavoidable and may counteract the direct effects of the reform. An adequate representation of heterogeneous labour markets becomes therefore an important issue for the assessment of reforms. We analyse the possible interactions between labour market segments in a combined, consistent microsimulation-AGE model with a flexible representation of substitution possibilities and different wage-forming regimes. We look at a stylised reform and find labour-demand cross-price elasticities between the low and medium skilled to be the main drivers of the results. Interaction with the high-skilled segment is less pronounced." (Author's abstract, IAB-Doku) ((en))Niedrigqualifizierte, mittlere Qualifikation, Hochqualifizierte, Lohnfindung, Anreizsystem, Leistungskürzung, Arbeitslose, aktivierende Arbeitsmarktpolitik - Auswirkungen, Beschäftigungseffekte, Erwerbsverhalten, Arbeitskräfteangebot, Lohnhöhe, Einkommensverteilung, Bruttoinlandsprodukt, öffentliche Einnahmen, Konsum, Investitionen, Kapitalmobilität, Arbeitsmarktmodell, Heterogenität

Heterogeneous Labour Markets in a Microsimulation-AGE Model: Application to Welfare Reform in Germany

Labour market reforms that are designed to stimulate labour supply at the lower end of the wage distribution can never be precisely restricted to affect only the target group. Spillovers to and feedback from other segments of the labour market are unavoidable and may counteract the direct effects of the reform. An adequate representation of heterogeneous labour markets becomes therefore an important issue for the assessment of reforms. We analyse the possible interactions between labour market segments in a combined, consistent microsimulation-AGE model with a flexible representation of substitution possibilities and different wage-forming regimes. We look at a stylised reform and find labour-demand cross-price elasticities between the low and medium skilled to be the main drivers of the results. Interaction with the high-skilled segment is less pronounced. --Applied general equilibrium model,microsimulation,discrete working time choice,heterogeneous labour markets,labour market reform

Taxation and Unemployment: An Applied General Equilibrium Approach

We present an applied general equilibrium modelling approach to analyse employment and unemployment effects of labour tax cuts in an economy where wages are determined through firm-union bargaining at the sectoral level. In such a labour market regime, simulations for Germany show that labour tax policies can make only a small contribution to alleviating the problem of persistent unemployment.applied general equilibrium, wage bargaining, labour tax policy

Discrete Working Time Choice in an Applied General Equilibrium Model

We present a model that integrates the discrete working time choice of heterogenous households into a general equilibrium setting where wages are determined by sectoral bargaining between firms and trade unions. The model is calibrated to German micro and macro data. We then use it to analyse stylised policy reforms that are designed to stimulate labour supply. --applied general equilibrium,discrete working time choice,labour market,trade unions,wage bargaining,labour market reform

What have we learned? Assessing labor market institutions and indicators

"Over the last decade, both the availability of quantitative indicators on labor market institutions and of studies trying to explain differences in national labor market performance through institutional variables have burgeoned significantly. It is now time to review these indicators and the empirical findings. Therefore, this paper has a threefold objective: first, we provide an overview of the aggregate indicators of core labor market institutions such as employment protection, the generosity of the benefit system, active labor market policies, taxation and collective bargaining. We assess the reliability of selected indicators. Second, we review the most relevant macro-econometric studies that made use of these indicators in order to explain diverging patterns of national employment performance. Third, and finally, this paper draws some preliminary conclusions regarding the further development of aggregate indicators and possible directions for future empirical research." (Author's abstract, IAB-Doku) ((en))Arbeitsmarktpolitik, institutionelle Faktoren, Arbeitsmarktindikatoren, Kündigungsschutz, Arbeitslosenversicherung, Arbeitslosenunterstützung, Leistungshöhe, arbeitsmarktpolitische Maßnahme, Tarifverhandlungen, Steuerpolitik, Reliabilität, Arbeitsmarktforschung, empirische Forschung, Arbeitsmarktentwicklung - internationaler Vergleich, Arbeitslosenquote, OECD

Politikberatung mit dem Simulationsmodell PACE-L: Möglichkeiten und Grenzen am Beispiel einer Senkung der Sozialabgaben

Dieser Beitrag stellt das numerische allgemeine Gleichgewichtsmodell PACE-L (Policy Analysis based on Computable Equilibrium, Labour market module) in kompakter Form vor. Dieses quantitative gesamtwirtschaftliche Modell wird am IAB zur Beurteilung von beschäftigungsrelevanten Reformvorschlägen, insbesondere im Bereich der Steuerpolitik und Sozialen Sicherung, verwendet. Der Beitrag beschreibt erstens die PACE-L zugedachte Rolle im Rahmen der IAB-Forschung. Zweitens diskutiert er den dem Modell zugrunde liegenden Gleichgewichtsbegriff. Wir versuchen dabei zu verdeutlichen, warum ein Gleichgewichtsmodell zur Untersuchung von Arbeitslosigkeit und damit verbundenen Fragestellungen geeignet ist. Drittens präsentieren wir einige Simulationsrechnungen mit einer neueren Version von PACE-L. Schließlich vergleichen wir ausgewählte Ergebnisse von PACE-L mit zwei makroökonometrischen Modellen, dem IAB/ INFORGE- und dem IAB/RWI-Modell. Der Modellvergleich zeigt, dass die längerfristigen Wirkungen verminderter Sozialabgaben von allen drei Modellen insgesamt recht ähnlich quantifiziert werden. Allerdings deuten insbesondere die Ergebnisse mit dem IAB/INFORGE-Modell darauf hin, dass sich die kurzfristigen Effekte einer solchen Politik von den längerfristigen unterscheiden können

Wege zu mehr Beschäftigung: Mit niedrigeren Sozialabgaben aus der Arbeitsmarktkrise?

Die Senkung der Sozialversicherungsbeiträge um ein Prozent könnte längerfristig bis zu 150.000 neue Jobs bringen. Zu diesem Ergebnis kommen Simulationsrechnungen mit zwei empirischen gesamtwirtschaftlichen Modellen. Wird zur Finanzierung der Einnahmenverluste eine Kopfpauschale eingeführt oder die Mehrwertsteuer angehoben, sind von Anfang an Beschäftigungsgewinne möglich. Dagegen können bei einer Senkung der Staatsausgaben anfängliche Beschäftigungsverluste nicht ausgeschlossen werden. Die Beschäftigungsgewinne fallen umso höher aus, je weniger die gesunkenen Beiträge und die gestiegene Mehrwertsteuer dazu führen, dass höhere Löhne durchgesetzt werden. Die Senkung der Lohnnebenkosten kann zwar zu mehr Beschäftigung und zum Abbau der Arbeitslosigkeit beitragen. Sie ist aber keinesfalls der alleinige Ausweg aus der Beschäftigungskrise. Die - insbesondere aufgrund der demographischen Entwicklung - steigenden Ausgaben in der Renten- und Krankenversicherung erzwingen größere Reformen. Die Finanzierung der Sozialversicherungen muss vom Faktor Arbeit entkoppelt und auf eine neue, breitere Grundlage gestellt werden

Heterogeneous labour markets in a Microsimulation-AGE Model : Application to welfare reform in Germany

Labour market reforms that are designed to stimulate labour supply at the lower end of the wage distribution can never be precisely restricted to affect only the target group. Spillovers to and feedback from other segments of the labour market are unavoidable and may counteract the direct effects of the reform. An adequate representation of heterogeneous labour markets becomes therefore an important issue for the assessment of reforms. We analyse the possible interactions between labour market segments in a combined, consistent microsimulation-AGE model with a flexible representation of substitution possibilities and different wage-forming regimes. We look at a stylised reform and find labour-demand cross-price elasticities between the low and medium skilled to be the main drivers of the results. Interaction with the high-skilled segment is less pronounced