Der Rückgang der Langzeitarbeitslosigkeit in Deutschland: Ein Erfolg der Hartz-Reformen oder konjunktureller Effekt?

High and persistent unemployment has been a major problem in Germany for decades. This article presents the theoretical reasons as well as individual and macroeconomic consequences of long-term unemployment. The so called Hartz Reforms aimed at reducing unemployment by reducing inflows and easing the transition from unemployment into employment. We describe the development of stocks and flows on the German labour market in the course of the business cycle between 1998 and 2009. Furthermore, we estimate an empirical matching function to detect the effects of the reforms and the business cycle on aggregate outflows from unemployment into employment. We apply the three stage least squares estimator (3SLS) to our system of equations as we include matching functions for long-term as well as short-term unemployed. For the sake of clarity and intuitive understanding, we model the reforms as time dummy variables and control for a trend that otherwise could also capture reform and other time effects. To learn about the business cycle effects we additionally compare the determinants of matching in two economic expansions by means of an Oaxaca-Blinder decomposition. Our results show that matching efficiency has improved for the long-term unemployed especially after the first two waves Hartz I/II and Hartz III. Thus, the reforms contributed to the observed reduction in long-term unemployment. However, there is no evidence that matches responded more strongly to the economic expansion after the reforms