Institutional settings of social assistance: What is improved or unsolved by the
Joachim Wilde
Institutionen und Arbeitsmarkt: Messkonzepte, Wirkungszusammenhänge und internationaler Vergleich,
2006
Abstract
The last reform of benefits for long-term unemployed in Germany ("Hartz IV") did not reduce costs. Moreover, the number of recipients is much higher than it was expected before. Therefore, the institutional settings might be less effective than they could be. Initially, the paper describes the institutional changes by the "Hartz IV" reform. Afterwards, these changes are evaluated with respect to their effects on the number of recipients. The evaluation is based on the results of econometric studies concerning the former social assistance. It is pointed out that the reform improved basic conditions and incentives only partly, whereas some of its elements worsened the institutional settings.
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Are Botswana and Mozambique ready for CMA enlargement?
Tobias Knedlik
Botswana Journal of Economics,
No. 3,
2006
Abstract
The paper elaborates on the appropriateness of a potentially enlarged Common Monetary Area in Southern Africa including Botswana and Mozambique. The theory of optimum currency areas including some extensions by accounting for costs of non-integration and considering the external relations of currency areas are presented. Various indicators such as the structure of the economies, interest rates, inflation rates, exchange rates, factor mobility and trading partners are observed empirically. The paper concludes that current changes in the exchange rate policy of Botswana are expected to lead to increasing, though already high, convergence with CMA countries. Botswana is therefore an appropriate candidate for CMA enlargement. Mozambique is converging towards South Africa but still remains on a lower level. Taking into account the costs of non-integration, however, the target of integration should be formulated for the medium term.
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Angewandte Industrieökonomik: Theorien, Modelle, Anwendungen
Ulrich Blum, Simone Müller, Andreas Weiske
,
2006
Abstract
Modern entrepreneurship comprises a mix of bourgeois morale and the striving for adventure: Bourgeois morale implies efficiency, reputation, the rule of the law. And adventure implies new frontiers, the spirit of competition, innovation and a pioneer’s attitude – up to the destruction of competitors. The modern entrepreneur’s social position thus is a ambiguous; the entrepreneur needs a special attitude with respect to economic activity as discussed by Werner Sombard (1913) and Max Weber (1905); society has to accept the positive ethical quality of profit seeking in order to survive. The modern theory of the enterprise promoted by neoclassic theory does not include any of these elements of real entrepreneurship. Industrial organisation theory tries to structure models closer to reality, thus allowing empirical testing. In many aspects, it is based on neoclassic theory, but also accepts the concept of strategic behaviour which includes potential reactions of other market participants in ones own activities. Elements of evolutionary economics, risk theory and modern information theory thus become important. The overarching question of the entrepreneur, who strives for a higher than normal profit in the market becomes: under which conditions should I enter the market and under which conditions will potential entrants do the same? How should I set my prizes and what reactions must I expect? How can I signal friendly behaviour to competitors? How can I differentiate myself from them? What importance do innovations and advertising have? The book roles out these questions in three large chapters on technology and market structure, on prize setting and signalling, and on research, development and innovation. An introduction explains individual behavioural patterns within the societal context – often in a historical perspective. Three methodological chapters introduce the reader into strategic thinking as the core aspect of the industrial organisation theory, the “old industrial organisation theory” and the neoclassic basic models. Each chapter is extended by exercises and tips for solutions.
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Hartz IV: not enough learned from welfare
Joachim Wilde
Wirtschaft im Wandel,
No. 2,
2006
Abstract
The so-called “Hartz IV reform“ should improve the system of services and benefits for the long-term unemployed in Germany. Thus, it was expected that the number of recipients and the volume of expenditures will decrease. However, both are higher than before. Therefore, the institutional settings might be less effective than they could be. Initially, the paper describes the institutional changes by the “Hartz IV“ reform. Afterwards, these changes are evaluated with respect to their effects on the number of recipients. The evaluation is based on the results of econometric studies concerning the former social assistance. It is pointed out that the reform improved basic conditions and incentives only partly, whereas some of its elements worsened the institutional settings.
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Determinants of employment - the macroeconomic view
Christian Dreger, Heinz P. Galler, Ulrich (eds) Walwai
Schriften des IWH,
No. 22,
2005
Abstract
The weak performance of the German labour market over the past years has led to a significant unemployment problem. Currently, on average 4.5 mio. people are without a job contract, and a large part of them are long-term unemployed. A longer period of unemployment reduces their employability and aggravates the problem of social exclusion.
The factors driving the evolution of employment have been recently discussed on the workshop Determinanten der Beschäftigung – die makroökonomische Sicht organized jointly by the IAB, Nuremberg, and the IWH, Halle. The present volume contains the papers and proceedings to the policy oriented workshop held in November 2004, 15-16th. The main focus of the contributions is twofold. First, macroeconomic conditions to stimulate output and employment are considered. Second, the impacts of the increasing tax wedge between labour costs and the take home pay are emphasized. In particular, the role of the contributions to the social security system is investigated.
In his introductory address, Ulrich Walwei (IAB) links the unemployment experience to the modest path of economic growth in Germany. In addition, the low employment intensity of GDP growth and the temporary standstill of the convergence process of the East German economy have contributed to the weak labour market performance. In his analysis, Gebhard Flaig (ifo Institute, München) stresses the importance of relative factor price developments. A higher rate of wage growth leads to a decrease of the employment intensity of production, and correspondingly to an increase of the threshold of employment. Christian Dreger (IWH) discusses the relevance of labour market institutions like employment protection legislation and the structure of the wage bargaining process on the labour market outcome. Compared to the current setting, policies should try to introduce more flexibility in labour markets to improve the employment record. The impact of interest rate shocks on production is examined by the paper of Boris Hofmann (Deutsche Bundesbank, Frankfurt). According to the empirical evidence, monetary policy cannot explain the modest economic performance in Germany. György Barabas and Roland Döhrn (RWI Essen) have simulated the effects of a world trade shock on output and employment. The relationships have been fairly stable over the past years, even in light of the increasing globalization. Income and employment effects of the German tax reform in 2000 are discussed by Peter Haan and Viktor Steiner (DIW Berlin). On the base of a microsimulation model, household gains are determined. Also, a positive relationship between wages and labour supply can be established. Michael Feil und Gerd Zika (IAB) have examined the employment effects of a reduction of the contribution rates to the social security system. To obtain robust results, the analysis is done under alternative financing scenarios and with different macroeconometric models. The impacts of allowances of social security contributions on the incentives to work are discussed by Wolfgang Meister and Wolfgang Ochel (ifo München). According to their study, willingness to work is expected to increase especially at the lower end of the income distribution. The implied loss of contributions could be financed by higher taxes.
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Non-take-up Behavior of Social Assistance in Germany - An Empirical Investigation of Unexpected Reactions
Joachim Wilde, Alexander Kubis
Jahrbücher für Nationalökonomie und Statistik,
No. 3,
2005
Abstract
Concerning German social assistance earlier studies calculate a non-take-up rate of more than 50 percent. This contradicts intuition. Using data from the low-income panel we estimate eligibility and non-take-up rate more precisely. However, avoiding simulation errors of earlier studies reduces the rate only slightly. Therefore, we estimate a multiple probit model to explain the nontake- up behavior. Significant reasons are low claims, stigma and the expectation of a short life of eligibility. Additionally, we show a significant simultaneous relation between earned income and the tendency to participate in social assistance. The sign is negative in both directions.
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The new social benefits scheme (Arbeitslosengeld II) and the Municipal Option Act
Herbert Buscher
Wirtschaft im Wandel,
No. 9,
2004
Abstract
One of the most important reform measures of the German labor market relates to the harmonization of social welfare and unemployment assistence to the new ‘”Arbeitslosengeld-II”. In the context of these reform measures it is expected that local employment offices and local authorities should constitute working parties to facilitate the unemployed in finding new jobs. In the case that a local authority prefers to manage this job in its own responsibility she has the right to opt. The paper discusses possible advantages and disadvantages of this option.
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Unemployment benefit II - Comments on the merging of unemployment benefits and public assistance
Herbert Buscher
Wirtschaft im Wandel,
No. 6,
2003
Abstract
The paper discusses the consequences of the planned reform of the unemployment security system, namely the new unemployment benefits II which consists of the former “Arbeitslosenhilfe“ and of transfers from the social welfare system. The paper calculates the expected reductions in public spending and relates a part of this amout to a possible reduction in labour unit costs and its consequences for employment.
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