Does Work Always Pay in Germany?
Income redistribution in Germany is the result of a combination of several redistribution instruments: there is a complex income tax law, different obligatory social insurances and supplementary benefits. This paper estimates income redistribution by quantile regression, using German EVS data. Two results are obtained: income after redistribution does not always increase in line with income before redistribution, i.e. for people with a low income before redistribution, it does not make sense to increase their efforts, since more work means less earnings. Further, an increasing redistribution rate for higher incomes is not always observable from the data. Copyright 2009 The Author. Journal Compilation Verein für Socialpolitik and Blackwell Publishing Ltd. 2009.
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Volume (Year): 11 (2010)
Issue (Month): (08)
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- Wolfgang Ochel, 2005. "Hartz IV – Welfare to Work in Germany," CESifo DICE Report, Ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 3(2), pages 18-25, 07.