Hilmar Schneider

Does Size Matter? The Impact of Changes in Household Structure on Income Distribution in Germany

In Germany, two observations can be made over the past 20 years: First, income inequality has been constantly increasing while, second, the average household size has been declining dramatically. The analysis of income distribution relies on equivalence-weighted incomes which take into account household size. Therefore, there is an obvious link between these two developments. The aim of the paper is to quantify how the trend towards smaller households has influenced the change in income distribution. In order to do so, we are using a decomposition of changes in inequality measures over time allowing for a separation between wage and demographic effects respectively. We propose similar decompositions for the change in poverty and richness as well and compare them with results that were obtained by a re-weighting procedure. Our results show that the income gap would also have increased without the demographic trend. But its level would be lower than it actually is. In addition, the demographic effect turns out to be larger for incomes before tax and benefits.

The IZA Evaluation Dataset: Towards Evidence-Based Labor Policy-Making

The evaluation of labor market policies has become an important issue in many European countries. In recent years, a number of them have opened their administrative databases for evaluation studies. The advantages of administrative data are straightforward: they are accurate, contain a large number of observations (in some cases the whole population) and usually cover a long period of time. However, the information contained in administrative data is normally limited to administrative purposes. Therefore, information that might be relevant for economic modeling is often absent. The IZA Evaluation Dataset aims to overcome such limitations for Germany by complementing administrative data from the Federal Employment Agency with innovative survey data. The administrative part of the dataset consists of a large random sample of inflows into unemployment in Germany from 2001 to 2008 and contains around 920,000 individuals. The complementary survey covers a panel of more than 17,000 individuals who entered unemployment between June 2007 and May 2008. They were initially interviewed shortly after becoming unemployed and then again one year later. In addition, a quarter of individuals were interviewed already after six months. The survey data also contain information on search behavior, ethnic and social networks, psychological factors, (non-)cognitive abilities, and attitudes. This paper describes the sampling and contents of the IZA Evaluation Dataset and outlines the future development.

Konzentration statt Verzettelung: Die deutsche Arbeitsmarktpolitik am Scheideweg

Abstract The German labor market reforms seem to be on the right track. However, they need to be adjusted especially on the organizational side to make them more effective. The labor market instruments can be concentrated on temporary company wage subsidies, training measures and financial incentives for business start-ups. It is essential to increase incentives, intensify competitive structures and to ensure clear-cut responsibilities.

Effizient, einfach und gerecht: Ein integriertes System zur Reform von Einkommensteuer und Sozialabgaben

Abstract The system of income taxation in Germany is too complex and insufficiently transparent. Many reform proposals have been publicly debated during the past years. However, so far, conflicting goals of positive employment and distributional effects without a negative impact on the state’s budget could not be overcome. A common problem of previous reform proposals is that they have neglected social security contributions and their interactions with income taxes. We tackle this issue by proposing an integrated system of taxation. Our simulations show that this comprehensive reform resolves conflicting goals: employment increases, inequality decreases and tax revenues slightly increase.

Reform der Hartz IV-Hinzuverdienstregelungen: Ein verfehlter Ansatz

Abstract In Germany, both policy makers and researchers have been searching for solutions to overcome the disincentives on labor supply generated by income allowances for welfare recipients (Unemployment Benefit II). Taking proposals of the German Economic Institute (IW) and the governing Liberal Party (FDP) as a starting point, the German Federal Government has intensely discussed this topic during fall 2010 and finally proposed a reform in legislation. In this study, we analyze the potential labor supply effects of the legislated reform and the preceding proposals. In a second step, we augment the different scenarios with a working hours requirement to ensure that only those are subsidized, whose earned income is low due to low hourly wages rather than few working hours. Our simulations confirm the well-known trade-off of in-work benefits: Without working time requirement they tend to create incentives for welfare recipients to increase their labor supply, such that overall labor supply rises. However, the more generous the allowable income regulation, the more expensive the reform gets for the government budget. This comes mainly from the increasing incentive to reduce working hours for those located around the phasing-out level of income. This predominantly affects secondary earners. A working hours requirement reduces these effects and causes more favorable labor market effects and consequently much lower fiscal costs.

Kapitulation vor dem strukturellen und organisatorischen Wandel

Dramatisch schwindende Mitgliederzahlen und eine stetig fortschreitende Auflosung der Tarifbindung sind ein nicht mehr zu ubersehendes Anzeichen fur einen tiefgreifenden Wandel am Arbeitsmarkt, auf den die Gewerkschaften bislang entweder ratlos oder gar nicht reagieren. In ihrer Verzweiflung sehen sie sich zunehmend gezwungen, den Staat in die Pflicht fur die Wahrnehmung von Arbeitnehmerinteressen zu drangen, die sie selbst nicht mehr erfullen konnen. Die aktuelle Debatte um die Einfuhrung gesetzlicher Mindestlohne liefert hierfur ein beredtes Zeugnis. Noch vor wenigen Jahren waren gesetzliche Mindestlohne von den Gewerkschaften zu Recht als Angriff auf die Tarifautonomie und damit als Tabubruch aufgefasst worden, weil dadurch de facto ihre Machtposition aktiv geschwacht wird. Je mehr sich der Staat per Gesetz um Arbeitnehmerbelange kummert, desto weniger brauchen Arbeitnehmer die Gewerkschaften. Im Gegenzug ubernehmen politische Parteien in wachsendem Mase die arbeitnehmerische Interessenwahrnehmung.