Working paper/research report

Publication year: 2000

URL: https://nbn-resolving.org/urn:nbn:de:bsz:180-madoc-10369

Title of series: Discussion Papers, Institut für Volkswirtschaftslehre und Statistik

Number in series: 575

Abstract: 

This paper examines the employment effects of a revenue-neutral cut in the social security contribution rate in Germany by running policy simulations in four different types of macroeconomic models. Two models are based on time-series data where the labor market is modeled basically demand oriented, whereas the other two models are supply oriented computable general equilibrium models. While the predicted employment effects of the cut in the contribution rate are qualitatively similar across models three years after the cut, they differ considerably in magnitude. These differences can to a large extent be attributed to differences in the basic structure of the models. Of special importance is how prices and wages react in each model to the cut in the social security tax rate on one side, and the necessary increase of the indirect tax rate on the other side. The results, therefore, provide a guideline for assessing the outcome of policy simulations and for the further development of macroeconomic models suitable for this kind of experiments.

Harvard Citation style: Buscher, H., Buslei, H., Göggelmann, K., Koschel, H., Schmidt, T., Steiner, V., et al. (2000) Empirical macromodels under test. (Discussion Papers, Institut für Volkswirtschaftslehre und Statistik, 575). Mannheim: Institut für Volkswirtschaftslehre und Statistik. https://nbn-resolving.org/urn:nbn:de:bsz:180-madoc-10369

APA Citation style: Buscher, H., Buslei, H., Göggelmann, K., Koschel, H., Schmidt, T., Steiner, V., & Winker, P. (2000). Empirical macromodels under test. (Discussion Papers, Institut für Volkswirtschaftslehre und Statistik, 575). Institut für Volkswirtschaftslehre und Statistik. https://nbn-resolving.org/urn:nbn:de:bsz:180-madoc-10369