Kiel Working Papers, Kiel Institute for World Economics
No 1463:
Zur Entwicklung des Anspruchslohns in Deutschland
Alfred Boss
Abstract: Due to labor market reforms in Germany some years ago, the
incentives to work changed. The paper analyzes the effects on the
reservation wages for specific groups. It is assumed that reservation wages
are determined by the replacement rates implied by the system of
unemployment benefits and by the rules of means-tested social assistance.
In addition, the paper describes the development of the replacement rates
in the recent decades. As a side effect, it is intended to support the
search for an indicator for the reservation wage which can be used to
explain the unemployment rate in a macroeconomic model for Germany. It
turns out that the replacement rates increased in the period 1950 to 1975.
Thereafter, the rates for the specific groups developed differently.
However, in 2008 the rates are higher than they had been in the fifties and
the sixties
Keywords: Unemployment benefits, net wages, reservation wages, incentives to work; (follow links to similar papers)
JEL-Codes: H24; (follow links to similar papers)
54 pages, November 2008
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