Comment on "Unemployment Compensation and Wages: Evidence from the German Hartz Reforms" by Stefan Arent and Wolfgang Nagl

Ludsteck, Johannes and Seth, Stefan (2013): Comment on "Unemployment Compensation and Wages: Evidence from the German Hartz Reforms" by Stefan Arent and Wolfgang Nagl.

Abstract

Arent and Nagl (2013) use the BA Employment panel 1998-2007 to identify effects of the German Hartz reform. Their findings suggest that the reform caused a considerable reduction of wages. Our replication of their study suggests that their clear and strong conclusions are driven by a too coarse modelling of the time effects. They become blurred and weak once the development of wages is investigated based on a finer time grid. Further methodological considerations put into question whether their models are well-suited to investigate the wage effects of the reform.

• Item Type: MPRA Paper
• Language: English
• Keywords: Hartz reforms; unemployment compensation; wages
• Subjects: J - Labor and Demographic Economics > J3 - Wages, Compensation, and Labor Costs > J31 - Wage Level and Structure ; Wage Differentials; J - Labor and Demographic Economics > J6 - Mobility, Unemployment, Vacancies, and Immigrant Workers > J65 - Unemployment Insurance ; Severance Pay ; Plant Closings; J - Labor and Demographic Economics > J8 - Labor Standards: National and International

References

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Arent, S., and Nagl, W. (2013). Unemployment Compensation and Wages: Evidence from the German Hartz Reforms. Jahrbüchher für Nationalökonomie und Statistik, 233(4): 450–466.

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