Distribution effects of unemployment insurance in Germany in the 1980s

Abstract

"In this article the contributions to the unemployment insurance scheme and the expenditure on the benefits under this scheme are estimated from the microdata of the IAB employment sample for the period 1980-1989. The distribution of contributions and expenditure is estimated according to three variables: the age of contributors and benefit recipients, and the size of the enterprise and the industry in which they previously worked. In this way areas of unemployment insurance can be identified in which the contributions do not cover the expenditure on selected benefits and where absolute deficits are therefore produced. By comparing the structure of contributions and benefits it is also possible to determine relative deficit areas in which the contribution margin is insufficient. With the aid of the mismatch indicator, global trends of the distribution effect are shown: The deficit from the benefits to older unemployed people increased in the late 1980s. The deficit from younger workers lessened in the study period, but remained an underproportional contribution. A large proportion of the benefits is paid to unemployed people who subsequently leave the labour market permanently. More than one third of the benefits were paid to this group. As the size of the enterprise increases, so too does the proportion of benefits increase which is paid to unemployed people before their withdrawal from the labour market. This trend increased in the course of the 1980s. Branches of industry which are subject to seasonal influences and have many recalls put pressure on the unemployment insurance scheme. About 10% of the benefits are paid to recipients who are taken on again by their old company." (Author's abstract, IAB-Doku) ((en))

Cite article

Mavromaras, K. & Rudolph, H. (1998): Verteilungseffekte der Arbeitslosenversicherung in Deutschland in den 80er Jahren. In: Mitteilungen aus der Arbeitsmarkt- und Berufsforschung, Vol. 31, No. 1, p. 93-107.