The Hartz reforms from a macroeconomic perspective: Positive effects predominate

Abstract

"Ten years ago, the most severe labour market reforms in post war German economic history came into force. They targeted on higher efficiency of the public employment service, higher incentives for the unemployed to search for a job intensively, and higher flexibility to push labour demand. Macroeconomic studies prove the positive impact of the reforms on labour market dynamics, e.g. the speed of matching. Unemployment persistence was reduced, which was one reason for the Beveridge curve to shift inwards for the first time in decades. This indicates that the functioning of the labour market improved, and according to the analysis this improvement was permanent and for structural reasons. On the other side of the coin, the reforms were accompanied by an enlargement of the low-pay and atypical segment of the labour market and may have induced some welfare loss. All in all, however, the Hartz reforms leave the German labour market better prepared for handling new challenges that emerge from the European crisis and the demographic change, for example." (Author's abstract, IAB-Doku) ((en))

Cite article

Klinger, S., Rothe, T. & Weber, E. (2013): Makroökonomische Perspektive auf die Hartz-Reformen: Die Vorteile überwiegen. (IAB-Kurzbericht 11/2013), Nürnberg, 8 p.