Household Labor Supply Effects of Low-Wage Subsidies in Germany
AbstractThis research evaluates the impact on German household labor supply of various subsidy schemes proposed to foster low-wage employment. Using data from the German Socio- Economic Panel, we estimate a discrete choice model of household labor supply. On the basis of the estimated labor supply parameters of husbands and wives, we simulate participation and hours effects of different policies raising low labor earnings at the individual and household levels. In all cases, the labor supply effect is very moderate. Subsidies to individuals promote part-time employment, in particular of second earners, while subsidies based on low household income drive the better qualified partner out of the labor market so that the total number of labor market participants even declines.
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Bibliographic InfoPaper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 637.
Length: 21 pages
Date of creation: Nov 2002
Date of revision:
Publication status: published in: Journal of Applied Social Sciences Studies, 2003, 123 (1), 199-208
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
Find related papers by JEL classification:
- J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy
- J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy
- H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
- J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
This paper has been announced in the following NEP Reports:
- NEP-ALL-2002-12-09 (All new papers)
- NEP-DCM-2002-12-09 (Discrete Choice Models)
- NEP-PBE-2002-12-09 (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.:
- Jerry A. Hausman & Paul Ruud, 1984.
"Family Labor Supply With Taxes,"
NBER Working Papers
1271, National Bureau of Economic Research, Inc.
- Martijn P. Tummers & Isolde Woittiez, 1991. "A Simultaneous Wage and Labor Supply Model with Hours Restrictions," Journal of Human Resources, University of Wisconsin Press, vol. 26(3), pages 393-423.
- Heckman, James J, 1979.
"Sample Selection Bias as a Specification Error,"
Econometric Society, vol. 47(1), pages 153-61, January.
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