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‘Marginal Employment’: Stepping Stone or Dead End? Evaluating the German Experience

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Author Info
Ronny Freier () (Stockholm School of Economics and DIW Berlin)
Viktor Steiner () (Free University Berlin, DIW Berlin and IZA)
Abstract

'Marginal employment', i.e. employment at low working hours and earnings not covered by social security, has been gaining importance in the German economy over the past decade. Using a large newly available panel data set and statistical matching techniques, we analyse the effects of marginal employment on future individual outcome variables such as unemployment, regular employment and earnings. In addition to average treatment effects, we calculate dynamic and cumulative treatment effects accounting for total time spent in various labor market states and related earnings over a period of three years. We find that marginal employment (i) does not affect time spent in regular employment within a threeyears' observation period, (ii) reduces future unemployment, (iii) slightly increases cumulated future earnings, on average, and (iv) is associated with a small negative cumulative earnings effect for older workers in west Germany.

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Publisher Info
Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 3175.

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Length: 30 pages
Date of creation: Nov 2007
Date of revision:
Handle: RePEc:iza:izadps:dp3175

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Related research
Keywords: marginal employment; social security contributions; wage subsidies; labour market policy; evaluation of treatment effect;

Other versions of this item:

Find related papers by JEL classification:
J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
J64 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Unemployment: Models, Duration, Incidence, and Job Search
H43 - Public Economics - - Publicly Provided Goods - - - Project Evaluation; Social Discount Rate
C35 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Discrete Regression and Qualitative Choice Models

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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. James Heckman & Hidehiko Ichimura & Jeffrey Smith & Petra Todd, 1998. "Characterizing Selection Bias Using Experimental Data," Econometrica, Econometric Society, vol. 66(5), pages 1017-1098, September.
    Other versions:
  2. Peter Haan & Viktor Steiner, 2006. "Making Work Pay for the Elderly Unemployed: Evaluating Alternative Policy Reforms for Germany," IZA Discussion Papers 2424, Institute for the Study of Labor (IZA). [Downloadable!]
  3. Peter Haan & Viktor Steiner, 2006. "Making Work Pay for the Elderly Unemployed: Evaluating Alternative Policy Reforms for Germany," Discussion Papers of DIW Berlin 641, DIW Berlin, German Institute for Economic Research. [Downloadable!]
  4. Marco Caliendo & Sabine Kopeinig, 2005. "Some Practical Guidance for the Implementation of Propensity Score Matching," IZA Discussion Papers 1588, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  5. Ichino, Andrea & Mealli, Fabrizia & Nannicini, Tommaso, 2006. "From Temporary Help Jobs to Permanent Employment: What Can We Learn from Matching Estimators and their Sensitivity?," CEPR Discussion Papers 5736, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  6. Lechner, Michael, 1999. "Earnings and Employment Effects of Continuous Off-the-Job Training in East Germany after Unification," Journal of Business & Economic Statistics, American Statistical Association, vol. 17(1), pages 74-90, January.
  7. Viktor Steiner & Katharina Wrohlich, 2004. "Work Incentives and Labor Supply Effects of the 'Mini-Jobs Reform' in Germany," Discussion Papers of DIW Berlin 438, DIW Berlin, German Institute for Economic Research. [Downloadable!]
  8. Sianesi, Barbara, 2001. "An evaluation of the active labour market programmes in Sweden," Working Paper Series 2001:5, IFAU - Institute for Labour Market Policy Evaluation. [Downloadable!]
  9. René Böheim & Andrea Weber, 2006. "The effects of marginal employment on subsequent labour market outcomes," Economics working papers 2006-12, Department of Economics, Johannes Kepler University Linz, Austria. [Downloadable!]
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