P22

P 22 - Labor market effects of socio-political reforms

Projectmembers:
Prof. Dr. Patrick Puhani, Hannover University
Katja Sonderhof, Hannover University
Falko Tabbert, AXA Konzern AG


The social market economy of Germany experiences one of the heaviest crises in its history in these years. Continuous reform efforts concerning health, pensions, social benefits and family policy illustrate the spectrum of the debate. Low birth rates as well as high unemployment rates belong to the most important determinants of the fragility of the welfare state in its current form.

Since the late 1950s the economic success of Germany was used to finance social welfare by intensifying reallocation mechanisms. Examples are higher payments for unemployed persons, an extended maternity leave or the gradual abolishment of unpaid days in during sick leave. These extension in welfare entailed incentive effects concerning labor demand and labor supply. However, these incentive effects have not been evaluated yet with person-level data, probably due to the good economic situation in these times or due to a lack of person-level data.

The objective of this project is to evaluate socio-economic reforms in Germany. In a first part we focus on reforms concerning family policy that are to counteract the declining birth rates and improve the situation of employed women with children. We are going to analyze the effects of apparent “improvements” for women (e.g. longer maternity leaves) on their actual situation on the labor market. Hence, we empirically evaluate the potential disadvantages of some reforms for particular groups of women.

In a second part of this research project, we evaluate the effects of a reduction of sick pay. The reduction of sick pay has taken place in 1996 - in these times absence rates were very high - so the reform was introduced to lower absence rates of the German workforce. We will evaluate whether this reduction of sick pay was associated with lower absence rates.