Evaluating the German "Mini-Job" Reform Using a True Natural Experiment
AbstractIncreasing work incentives for people with low incomes is a common topic in the policy debate across European countries. The "Mini-Job" reform in Germany – introduced on April 1, 2003 – can be seen in line with these policies, exempting labour income below a certain threshold from taxes and employees’ social security contributions. We carry out an ex-post evaluation to identify the short-run effects of this reform. Our identification strategy uses an exogenous variation in the interview months in the German Socio-Economic Panel, that allows us to distinguish groups that are (or are not) affected by the reform. To account for seasonal effects we additionally use a difference-in-differences strategy. The results show that the short-run effects of the reform are limited. We find no significant short-run effects for marginal employment. However, there is evidence that single men who are already employed react immediately and increase secondary job holding.
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Bibliographic InfoPaper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 2041.
Length: 23 pages
Date of creation: Mar 2006
Date of revision:
Publication status: published in: Applied Economics, 2010, 42(19), 2475–2489
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Other versions of this item:
- Marco Caliendo & Katharina Wrohlich, 2010. "Evaluating the German 'Mini-Job' reform using a natural experiment," Applied Economics, Taylor & Francis Journals, vol. 42(19), pages 2475-2489.
- Marco Caliendo & Katharina Wrohlich, 2006. "Evaluating the German "Mini-Job" Reform Using a True Natural Experiment," Discussion Papers of DIW Berlin 569, DIW Berlin, German Institute for Economic Research.
- C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions
- H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
- J68 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Public Policy
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-04-08 (All new papers)
- NEP-EEC-2006-04-08 (European Economics)
- NEP-EXP-2006-04-08 (Experimental Economics)
- NEP-LAB-2006-04-08 (Labour Economics)
- NEP-PBE-2006-04-08 (Public Economics)
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