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Work Incentives and Labor Supply Effects of the 'Mini-Jobs Reform' in Germany

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Author Info
Viktor Steiner
Katharina Wrohlich

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Abstract

We analyze the work incentives and labor supply effects of the so-called mini-jobs reform (subsidies of social security contributions to people with low-earnings jobs) introduced in Germany in April 2003. The analysis is based on a structural labor supply model embedded in a detailed tax-benefit microsimulation model for which we use the German Socio-Economic Panel (GSOEP). Our simulation results show that the likely employment effects of the mini-jobs reform will be small. The small positive participation effect is outweighed by a negative hours effect among already employed workers. The fiscal effects of the reform are also likely to be negative. We conclude that the analyzed mini-job reform is not an effective policy to increase employment of people with low earnings capacity.

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File URL: http://www.diw.de/documents/publikationen/73/diw_01.c.42409.de/dp438.pdf
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Publisher Info
Paper provided by DIW Berlin, German Institute for Economic Research in its series Discussion Papers of DIW Berlin with number 438.

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Length: 22 p.
Date of creation: 2004
Date of revision:
Handle: RePEc:diw:diwwpp:dp438

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Related research
Keywords: Mini-Job;

Find related papers by JEL classification:
J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household

This paper has been announced in the following NEP Reports:

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Robert Moffitt, 2002. "Welfare Programs and Labor Supply," NBER Working Papers 9168, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  2. Peter Haan, 2004. "Discrete Choice Labor Supply: Conditional Logit vs. Random Coefficient Models," Discussion Papers of DIW Berlin 394, DIW Berlin, German Institute for Economic Research. [Downloadable!]
  3. Hilary Hoynes & Richard Blundell, 2001. "Has "In-Work" Benefit Reform Helped the Labour Market?," NBER Working Papers 8546, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  4. Blundell, Richard, 2000. "Work Incentives and 'In-Work' Benefit Reforms: A Review," Oxford Review of Economic Policy, Oxford University Press, vol. 16(1), pages 27-44, Spring.
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Olivier Bargain & Marco Caliendo & Peter Haan & Kristian Orsini, 2006. "'Making Work Pay' in a Rationed Labour Market," IZA Discussion Papers 2033, Institute for the Study of Labor (IZA). [Downloadable!]
  2. Alexander Spermann, 2006. "Basic Income Reform in Germany: Better Gradualism than Cold Turkey," IZA Discussion Papers 2398, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  3. Ronny Freier & Viktor Steiner, 2007. "'Marginal Employment' and the Demand for Heterogenous Labour: Empirical Evidence from a Multi-factor Labour Demand Model for Germany," Discussion Papers of DIW Berlin 662, DIW Berlin, German Institute for Economic Research. [Downloadable!]
  4. Caliendo, Marco & Steiner, Viktor, 2005. "Aktive Arbeitsmarktpolitik in Deutschland : Bestandsaufnahme und Bewertung der mikroökonomischen Evaluationsergebnisse (Active labour market policy in Germany * review ans assessment of the microecon," Zeitschrift für ArbeitsmarktForschung - Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 38(2/3), pages 396-418. [Downloadable!]
  5. Ronny Freier & Viktor Steiner, 2007. "‘Marginal Employment’: Stepping Stone or Dead End? Evaluating the German Experience," IZA Discussion Papers 3175, Institute for the Study of Labor (IZA). [Downloadable!]
  6. Ronny Freier & Viktor Steiner, 2007. ""Marginal Employment": Stepping Stone or Dead End? Evaluating the German Experience," Discussion Papers of DIW Berlin 744, DIW Berlin, German Institute for Economic Research. [Downloadable!]
  7. Peter Haan, 2005. "State Dependence and Female Labor Supply in Germany: The Extensive and the Intensive Margin," Discussion Papers of DIW Berlin 538, DIW Berlin, German Institute for Economic Research. [Downloadable!]
  8. Pfeifer, Christian, 2005. "Betriebliche Determinanten von Teilzeitarbeit, Mini- und Midi-Jobs; Eine theoretische und empirische Analyse mit niedersächsischen Betriebsdaten," Diskussionspapiere der Wirtschaftswissenschaftlichen Fakultät der Universität Hannover dp-324, Universität Hannover, Wirtschaftswissenschaftliche Fakultät. [Downloadable!]
  9. Ronny Freier & Viktor Steiner, 2007. "‘Marginal Employment’ and the Demand for Heterogenous Labour: Empirical Evidence from a Multi-Factor Labour Demand Model for Germany," IZA Discussion Papers 2577, Institute for the Study of Labor (IZA). [Downloadable!]
  10. Schneider, Hilmar & Bonin, Holger, 2005. "Wohlfahrts- und Verteilungseffekte eines allgemeinen Freibetrags bei den Sozialabgaben (Welfare and distribution effects of a general fixed allowance for social insurance contributions)," Zeitschrift für ArbeitsmarktForschung - Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 38(4), pages 475-492. [Downloadable!]
  11. Katharina Wrohlich, 2004. "Child Care Costs and Mothers’ Labor Supply: An Empirical Analysis for Germany," Discussion Papers of DIW Berlin 412, DIW Berlin, German Institute for Economic Research. [Downloadable!]
  12. Olivier Bargain & Marco Caliendo & Peter Haan & Kristian Orsini, 2005. "'Making Work Pay' in a Rationed Labour Market: The Mini-Job Reform in Germany," Discussion Papers of DIW Berlin 536, DIW Berlin, German Institute for Economic Research. [Downloadable!]
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