Resource title

Heterogeneous Labour Markets in a Microsimulation-AGE Model: Application to Welfare Reform in Germany

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Resource description

Labour market reforms that are designed to stimulate labour supply at the lower end of the wage distribution can never be precisely restricted to affect only the target group. Spillovers to and feedback from other segments of the labour market are unavoidable and may counteract the direct effects of the reform. An adequate representation of heterogeneous labour markets becomes therefore an important issue for the assessment of reforms. We analyse the possible interactions between labour market segments in a combined, consistent microsimulation-AGE model with a flexible representation of substitution possibilities and different wage-forming regimes. We look at a stylised reform and find labour-demand cross-price elasticities between the low and medium skilled to be the main drivers of the results. Interaction with the high-skilled segment is less pronounced.

Resource author

Stefan Boeters, Michael Feil

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Resource publish date

Resource language

eng

Resource content type

text/html

Resource resource URL

http://hdl.handle.net/10419/24739

Resource license

Adapt according to the presented license agreement and reference the original author.