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Evaluating the German 'Mini-Job' reform using a natural experiment

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  • Marco Caliendo
  • Katharina Wrohlich

Abstract

Increasing work incentives for people with low income is a common topic in the policy debate across European countries. The 'Mini-Job' reform in Germany had a similar motivation. We carry out an ex-post evaluation to identify the short-run effects of this reform. Our identification strategy uses an exogenous variation in the interview months in the Socio-Economic Panel Study (SOEP), which allows us to distinguish groups that are affected by the reform from those who are not. To account for seasonal effects we additionally use a Difference-In-Differences (DID) strategy. Descriptives show that there is a post-reform increase in the number of mini-jobs. However, we show that this increase cannot be causally related to the reform, since the short-run effects are very limited. Only single men seem to react immediately and increase secondary job holding.

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  • Marco Caliendo & Katharina Wrohlich, 2010. "Evaluating the German 'Mini-Job' reform using a natural experiment," Applied Economics, Taylor & Francis Journals, vol. 42(19), pages 2475-2489.
  • Handle: RePEc:taf:applec:v:42:y:2010:i:19:p:2475-2489
    DOI: 10.1080/00036840701858125
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    Cited by:

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    2. Carrillo-Tudela, Carlos & Launov, Andrey & Robin, Jean-Marc, 2021. "The fall in german unemployment: A flow analysis," European Economic Review, Elsevier, vol. 132(C).
    3. Zoe Adams & Simon Deakin, 2014. "Institutional Solutions to Precariousness & Inequality in Labour Markets," Working Papers wp463, Centre for Business Research, University of Cambridge.
    4. Gabriela Galassi, 2021. "Labor Demand Response to Labor Supply Incentives: Lessons from the German Mini-Job Reform," Staff Working Papers 21-15, Bank of Canada.
    5. Oral, Isil & Santos, Indhira & Zhang, Fan, 2012. "Climate change policies and employment in Eastern Europe and Central Asia," Policy Research Working Paper Series 6294, The World Bank.
    6. Müller, Kai-Uwe & Steiner, Viktor, 2011. "Beschäftigungswirkungen von Lohnsubventionen und Mindestlöhnen - Zur Reform des Niedriglohnsektors in Deutschland," Discussion Papers 2011/4, Free University Berlin, School of Business & Economics.
    7. Laun, Lisa, 2019. "In-work benefits across Europe," Working Paper Series 2019:16, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    8. Caliendo, Marco, 2009. "Income Support Systems, Labor Market Policies and Labor Supply: The German Experience," IZA Discussion Papers 4665, Institute of Labor Economics (IZA).
    9. Germana Bottone, 2020. "The Effect of Globalisation on Labour Market Institutions in Europe," Working Papers 0052, ASTRIL - Associazione Studi e Ricerche Interdisciplinari sul Lavoro.
    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. 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.
    12. Galassi, Gabriela, 2021. "Labor Demand Response to Labor Supply Incentives: Lessons from the German Mini-Job Reform," IZA Discussion Papers 14248, Institute of Labor Economics (IZA).
    13. Matthias Collischon & Kamila Cygan-Rehm & Regina T. Riphahn, 2021. "Employment effects of payroll tax subsidies," Small Business Economics, Springer, vol. 57(3), pages 1201-1219, October.
    14. Alessandro Sola, 2018. "The 2015 Refugee Crisis in Germany: Concerns about Immigration and Populism," SOEPpapers on Multidisciplinary Panel Data Research 966, DIW Berlin, The German Socio-Economic Panel (SOEP).

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    More about this item

    JEL classification:

    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy

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