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Earnings exemptions for unemployed workers: The relationship between marginal employment, unemployment duration and job quality

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  • Caliendo, Marco
  • Künn, Steffen
  • Uhlendorff, Arne

Abstract

In some countries including Germany unemployed workers can increase their income by working a few hours per week. The intention is to keep unemployed job seekers attached to the labour market and to increase their job-finding probabilities. To analyze the unemployment dynamics of job seekers with and without marginal employment, we consider an inflow sample into unemployment and estimate multivariate duration models. While we do not find any significant impact on the job finding probability in a model with homogeneous effects, models allowing for time-varying coefficients indicate a decreased job finding probability of marginal employment at the beginning of the unemployment spell and an increased job finding probability for the long-term unemployed. Our results suggest that job seekers with marginal employment find more stable post-unemployment jobs, and we find some evidence that the relationship between marginal employment and wages and employment stability varies with respect to skill levels, sector and labor market tightness.

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  • Caliendo, Marco & Künn, Steffen & Uhlendorff, Arne, 2016. "Earnings exemptions for unemployed workers: The relationship between marginal employment, unemployment duration and job quality," Labour Economics, Elsevier, vol. 42(C), pages 177-193.
  • Handle: RePEc:eee:labeco:v:42:y:2016:i:c:p:177-193
    DOI: 10.1016/j.labeco.2016.07.003
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    8. Pohlan, Laura & Bergemann, Annette & Uhlendorff, Arne, 2016. "Job Creation Schemes in Turbulent Times," VfS Annual Conference 2016 (Augsburg): Demographic Change 145495, Verein für Socialpolitik / German Economic Association.
    9. Kyyrä, Tomi & Arranz, José M. & García-Serrano, Carlos, 2019. "Does subsidized part-time employment help unemployed workers to find full-time employment?," Labour Economics, Elsevier, vol. 56(C), pages 68-83.
    10. Lietzmann, Torsten & Schmelzer, Paul & Wiemers, Jürgen, 2017. "Marginal employment for welfare recipients: stepping stone or obstacle?," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, pages 394-414.
    11. José Alves & Tomás Silva, 2021. "An Empirical Assessment of Monetary Policy Channels in Income and Wealth Disparities," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 63(3), pages 432-449, September.
    12. Kyyrä, Tomi & Pesola, Hanna & Rissanen, Aarne, 2017. "Unemployment Insurance in Finland: A Review of Recent Changes and Empirical Evidence on Behavioral Responses," Research Reports 184, VATT Institute for Economic Research.
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    More about this item

    Keywords

    Marginal employment; Mini-job; Unemployment duration; Job search; Employment stability; Multivariate duration models;
    All these keywords.

    JEL classification:

    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • C41 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Duration Analysis; Optimal Timing Strategies
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models

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