Comment on "Unemployment Compensation and Wages: Evidence from the German Hartz Reforms" by Stefan Arent and Wolfgang Nagl

Arent and Nagl (2013) use the BA Employment panel 1998-2007 to identify effects of the German Hartz reform. Their findings suggest that the reform caused a considerable reduction of wages. Our replication of their study suggests that their clear and strong conclusions are driven by a too coarse modelling of the time effects. They become blurred and weak once the development of wages is investigated based on a finer time grid. Further methodological considerations put into question whether their models are well-suited to investigate the wage effects of the reform.