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.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
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
Contact details of provider:
Postal: IZA, P.O. Box 7240, D-53072 Bonn, Germany
Phone: +49 228 3894 223
Fax: +49 228 3894 180
Web page: http://www.iza.org
Postal: IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany
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, Vacancies, and Immigrant Workers - - - 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)
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.:
- Robert Moffitt, 2002.
"Welfare Programs and Labor Supply,"
NBER Working Papers
9168, National Bureau of Economic Research, Inc.
- Kristian Orsini, 2006. "Tax-benefits reforms and the labor market: evidence from Belgium and other EU countries," Center for Economic Studies - Discussion papers ces0606, Katholieke Universiteit Leuven, Centrum voor Economische Studiën.
- Richard Blundell & Alan Duncan & Julian McCrae & Costas Meghir, 2000. "The labour market impact of the working families’ tax credit," Fiscal Studies, Institute for Fiscal Studies, vol. 21(1), pages 75-103, March.
- Ai, Chunrong & Norton, Edward C., 2003. "Interaction terms in logit and probit models," Economics Letters, Elsevier, vol. 80(1), pages 123-129, July.
- Scholz, John Karl, 1996. "In-Work Benefits in the United States: The Earned Income Tax Credit," Economic Journal, Royal Economic Society, vol. 106(434), pages 156-69, January.
- 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.
- Müller, Kai-Uwe & Steiner, Viktor, 2011. "Beschäftigungswirkungen von Lohnsubventionen und Mindestlöhnen - Zur Reform des Niedriglohnsektors in Deutschland," Discussion Papers 2011/4, Free University Berlin, School of Business & Economics.
- Caliendo, Marco, 2009.
"Income Support Systems, Labor Market Policies and Labor Supply: The German Experience,"
IZA Discussion Papers
4665, Institute for the Study of Labor (IZA).
- Caliendo, Marco, 2009. "Income support systems, labor market policies and labor supply: the German experience," Working Paper Series 2009:26, IFAU - Institute for Evaluation of Labour Market and Education Policy.
- Oral, Isil & Santos, Indhira & Zhang, Fan, 2012. "Climate change policies and employment in Eastern Europe and Central Asia," Policy Research Working Paper Series 6294, The World Bank.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mark Fallak).
If references are entirely missing, you can add them using this form.