The short-term consequences of unemployment: an investigation for Germany

Sebastian Beil, Ruhr-University Bochum

Sebastian Beil

scar effects of unemployment, matching, difference-in-differences, labor market reform

The paper analyzes the temporal pattern of the occupational consequences of unemployment for Germany in a time of extensive reforms and considerable variation in economic growth. Using data from the German Socio-Economic Panel (GSOEP) and difference-in-differences matching estimators I show that the variation in the overall scar effects correlates with economic growth as well as the timing of the reforms. Most notably, I find partial evidence that the shortening of the potential durations of unemployment benefits for older workers leads to higher scar effects of unemployment after 2006.