Using the introduction of fixed long-term unemployment benefits in Germany in 2005 as a unique experiment we find … strong evidence that lower unemployment benefit has an adverse effect on wages. We use panel data to identify and estimate …

reduced the generosity of long-term unemployment benefits. We use a model with different unemployment durations, where the … the existing disagreement in the macroeconomic literature on the unemployment effects of Hartz IV. We find that Hartz IV … was a major driver for the decline of Germany’s unemployment and that partial and equilibrium effect where of equal …