Abstract The European Union is characterised by large and persistent disparities across regions concerning income distribution and unemployment rates. European Structural Funds (ESF) have been raised to narrow income differences and foster employment in lagging regions. The paper describes the...

Abstract The paper shows that a more flexible labor market is unequivocally necessary for a lasting and substantial reduction of unemployment. It furthermore points out that a more flexible labor market is even beneficial from a long-run distributional point of view. Hence, the key to...

Abstract This paper deals with the system of fiscal federalism (Finanzausgleich) in Germany and its effects on macroeconomic growth. The maze of both transfers from federal government to the states (vertikaler Finanzausgleich) and interregional transfers between the states (horizontaler...

Abstract Free and competitive insurance markets are not able to provide a system which can be considered economically efficient to deal with the material risks of unemployment. Nor are individual unemployment insurance savings accounts - even when regulated by the state - a superior alternative....

Abstract In this article we examine whether or not the small size (in terms of population) of some German Laender (states) is harmful. The economic theory of federalism forms the ground on which we present empirical evidence, focusing on our own results for the German Laender. We find evidence...

Abstract We examine theoretically and empirically how wage subsidies and minimum wages interact regarding to employment opportunities, and how these interactive effects vary across different groups of workers. Assuming a neoclassical labor market and heterogeneous work, subsidized low-skilled...