IDEAS home Printed from https://ideas.repec.org/a/jns/jbstat/v222y2002i2p258-279.html
   My bibliography  Save this article

Wege aus der Verschuldung: Reform der Lohnpfändung / Getting Out of Debt: Reforming the Garnishment of Wage

Author

Listed:
  • Zaborowski Christoph

    () (Sandstraße 6, CH-8003 Zürich)

  • Zweifel Peter

    () (Sozialökonomisches Institut der Universität Zürich, Hottingerstraße 10, CH-8032 Zürich)

Abstract

Garnishment of wage as a way for creditors to enforce payment by unwilling or insolvent debtors, while very common in Germany and Switzerland, is not very successful. Based on a dynamic model of debtor behaviour, this paper explores two alternatives of reform. One is to reduce the rate of garnishment, which at present amounts to 100 percent of the wage income exceeding a defined subsistence level, thus probably destroying incentives to work. According to model simulations, reducing the rate of garnishment is likely to result in an increase of labour supply but a decrease of garnishment revenue per period. Second, the introduction of a debt release as it exists in the United States would have an ambiguous effect on labour supply. While providing debtorswith a fresh start, it would results a partial loss for creditors. A Pareto improvement thus does not seem to be possible. When taxpayers as an involved third party are taken into account, however, a potential Pareto improvement appears not attainable through debt release.

Suggested Citation

  • Zaborowski Christoph & Zweifel Peter, 2002. "Wege aus der Verschuldung: Reform der Lohnpfändung / Getting Out of Debt: Reforming the Garnishment of Wage," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 222(2), pages 258-279, April.
  • Handle: RePEc:jns:jbstat:v:222:y:2002:i:2:p:258-279
    as

    Download full text from publisher

    File URL: https://www.degruyter.com/view/j/jbnst.2002.222.issue-2/jbnst-2002-0206/jbnst-2002-0206.xml?format=INT
    Download Restriction: For access to full text, subscription to the journal or payment for the individual article is required.

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Das-Gupta, Arindam & Mookherjee, Dilip, 1996. "Tax Amnesties as Asset-Laundering Devices," Journal of Law, Economics, and Organization, Oxford University Press, vol. 12(2), pages 408-431, October.
    2. Reint Gropp & John Karl Scholz & Michelle J. White, 1997. "Personal Bankruptcy and Credit Supply and Demand," The Quarterly Journal of Economics, Oxford University Press, vol. 112(1), pages 217-251.
    3. Dutta, Prajit K., 1994. "Bankruptcy and expected utility maximization," Journal of Economic Dynamics and Control, Elsevier, vol. 18(3-4), pages 539-560.
    4. Andreoni, James, 1991. "The desirability of a permanent tax amnesty," Journal of Public Economics, Elsevier, vol. 45(2), pages 143-159, July.
    Full references (including those not matched with items on IDEAS)

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:jns:jbstat:v:222:y:2002:i:2:p:258-279. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Peter Golla). General contact details of provider: https://www.degruyter.com .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.