Welfare states redistribute both between individuals reducing annual inequality and over the life-cycle insuring against income risks. But studies measuring redistribution often focus only on a one-year period. Using German SOEP data from 1984 to 2009, long-term inequality over a 20-year period is computed and then decomposed into an inter- and intra-individual component. Results show that annual inequality ...
In this paper we use a dynamic structural life-cycle model to analyze the employment, fiscal and welfare effects induced by unemployment insurance. The model features a detailed specification of the tax and transfer system, including unemployment insurance benefits which depend on an individual's employment and earnings history. The model also captures the endogenous accumulation of experience which ...
Severance pay often results from a bargain between the firm and the employee to avoid or terminate a legal conflict. We theoretically investigate how income taxation affects these negotiations. Using panel data from West Germany and exploiting a change in tax law in 1999, we find that a higher income tax on severance pay reduces the probability of obtaining it and - in some specifications - also lowers ...
We present a method for taking advantage of labour market transitions to identify effects of financial incentives on employment decisions. The framework we use is very flexible and by imposing few theoretical assumptions allows extending the modelled sample relative to struc-tural models. We take advantage of this flexibility to include disabled people in the model and to analyse behaviour of disabled ...
We analyse the effectiveness of fiscal policy rules for business cycle stabilisation in a monetary union using a quarterly macro-econometric model of Germany. The simulations compare a deficit target and an expenditure target under a range of supply, demand and fiscal shocks. Their effects are evaluated by their impact on prices and output. The analysis demonstrates that in general the deficit target ...
While breastfeeding is associated with health benefits for both mothers and children, it may also make it difficult for mothers to return to the labor market early. Maternity and parental leave regulations have been developed to mitigate this conflict. In 2007, Germany passed a reform introducing a new parental leave benefit (Elterngeld). In this paper, we address the question of whether the new parental ...
The government has been and remains crucial in providing goods and services in modern-day economies. However, the manner of this provision is complex and touches upon numerous areas of economic and social policy. Government action plays an especially central role for services of general interest, as well as in the regulation of their provision by the private sector. Thus, the efficient and effective ...
This paper uncovers ongoing trends in idiosyncratic earnings volatility across generations by decomposing residual earnings auto-covariances into a permanent and a transitory component. We employ data on complete earnings life cycles forprime age men born 1935 through 1974 that covers earnings between 1960 and 2009. Over this period, the German labor market undergoes a heavy transformation and experiences ...