This project aims to develop a methodology which allows ex-ante evaluating the effects of the parental benefit (‘Elterngeld’), introduced in January 2007 in Germany, at both the micro and macro levels. We introduce an estimation procedure which relies on a micro-economic negotiation model on the one hand and an applied general equilibrium (AGE) model on the other hand. The effects of the reform are subsenquently calculated by means of the estimates, using a linked micro and macro-simulation programme which models in detail the German taxes and transfers system.
At the micro level, we will particularly shed light on the impact of the reform on female labour supply and the potential rearrangements within the family concerning child care and the parental time devoted to the children. As for the macro level, we will be able to analyse the reform effects on the entire labour market and on wage structure.