The analysis is about the compulsory German unemployment insurance system (GUIS). It is known that GUIS did nothing to … prevent the continuous rise of the rate of unemployment since the 1970s. The empirical literature about GUIS indicates that … literature on reforming the system of unemployment insurance has arisen, most of it aiming at marginal reforms only. It turns out …

also some evidence that more flexibility leads to lower unemployment rates and to lower rates of long-term unemployment … introduce more unemployment persistence. …

reform on wages and unemployment. The simulation results show that general equilibrium wage reactions tend to mitigate labour …