The impact of the Hartz IV labor market reform on hidden unemployment in Western Germany : results from different methodological approaches

Abstract

"Unemployment in Germany strongly increased in 2005. Beside other influences a labor market reform that came into force in 2005 (Hartz IV reform) was ascribed to redistribute hidden to open unemployment. Using different methodological approaches and data sets this article analyses the scale of this change from hidden to open unemployment in West Germany. Yet, the number of discouraged workers, due to the German Microcensus and following ILO-definitions, increased from 2004 to 2005 when compared year by year. For a longitudinal analysis the data from the Socioeconomic Panel were used to estimate the hidden unemployed based on a concept, which was developed at the German Institute for Economic Research (DIW). The results do not show any significant change from hidden to open unemployment. As a final step our analyses isolated the influence of Hartz IV by a simulation study that compares the estimated number of hidden unemployed for different labor market regimes. For this estimation data we used data from the Institute for Employment Research (IAB). The simulation only shows a weak impact of the reform on the scale of hidden unemployment. All in all, the Hartz IV reform did not have any strong effect on the hidden unemployment in West Germany. The results are in favor of a different view, which says that above all the labor force was expanded by the reform." (Autorenreferat, IAB-Doku)

Cite article

Fuchs, J. (2014): Der Einfluss von Hartz IV auf die westdeutsche Stille Reserve. Ergebnisse auf Basis unterschiedlicher methodischer Ansätze. In: Wirtschafts- und Sozialstatistisches Archiv, Vol. 8, No. 1-2, p. 33-48. DOI:10.1007/s11943-014-0138-5