Creating Low Skilled Jobs by Subsidising Market-Contracted Household Work
We analyze the determinants of household work contracted in the German shadow economy. The German socio-economic household panel, which enumerates casual domestic employment, is used to estimate the demand for such household work. The regressors include regional wage rates, household income and several control variables for household composition. We find that the demand for household work in the shadow economy is very income elastic. This suggests that targeted wage subsidies, linked to household work agencies, would be very effective in raising the legal demand for domestic help. A wage subsidy of 50% of wage costs could thus establish up to 500,000 new jobs for previously unemployed or non-working low skilled workers. The net fiscal costs of such a scheme are about 6.200 Euro per full-time job. In addition, society benefits from more law enforcement and from a raised female labor supply, especially by highly qualified mothers.
|Date of creation:||2003|
|Date of revision:|
|Contact details of provider:|| Postal: Mohrenstraße 58, D-10117 Berlin|
Web page: http://www.diw.de/en
More information through EDIRC
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.:
- Suen, W., 1995.
"Market-procured housework: The demand for domestic servants and female labor supply,"
Elsevier, vol. 2(1), pages 105-105, March.
- Suen, Wing, 1994. "Market-procured housework: The demand for domestic servants and female labor supply," Labour Economics, Elsevier, vol. 1(3-4), pages 289-302, September.
- Namkee Ahn & Sara La De Rica, 1997. "The underground economy in Spain: an alternative to unemployment?," Applied Economics, Taylor & Francis Journals, vol. 29(6), pages 733-743.
- Bernard Fortin & Guy Lacroix & Claude Montmarquette, 1997.
"Are Underground Workers More Likely To Be Underground Consumers?,"
CIRANO Working Papers
- Fortin, Bernard & Lacroix, Guy & Montmarquette, Claude, 2000. "Are Underground Workers More Likely to be Underground Consumers?," Economic Journal, Royal Economic Society, vol. 110(466), pages 838-60, October.
- Fortin, Bernard & Lacroix, Guy & Montmarquette, Claude, 1997. "Are Underground Workers More Likely to be Underground Consumers?," Cahiers de recherche 9710, Université Laval - Département d'économique.
- Rosenzweig, Mark R & Wolpin, Kenneth I, 1980. "Life-Cycle Labor Supply and Fertility: Causal Inferences from Household Models," Journal of Political Economy, University of Chicago Press, vol. 88(2), pages 328-48, April.
- Reuben Gronau & R. Layard, .
"Home Production - A Survey,"
University of Chicago - Population Research Center
85-2, Chicago - Population Research Center.
- Schneider, Hilmar & Kempe, Wolfram, 2002. "Lohnabstandsgebot kein hinreichendes Kriterium für positive Arbeitsanreize im Niedriglohnbereich," Wirtschaft im Wandel, Halle Institute for Economic Research (IWH), vol. 8(4), pages 85-91.
- Karsten Hank & Michaela Kreyenfeld, 2000. "Does the availability of childcare influence the employment of mothers? Findings from western Germany," MPIDR Working Papers WP-2000-003, Max Planck Institute for Demographic Research, Rostock, Germany.
- Tilman Brück & John P. Haisken-DeNew & Klaus F. Zimmermann, 2002. "Förderung von Agenturen für haushaltsnahe Dienstleistungen schafft Arbeitsplätze für Geringqualifizierte," DIW Wochenbericht, DIW Berlin, German Institute for Economic Research, vol. 69(23), pages 363-369.
- Killingsworth, Mark R. & Heckman, James J., 1987. "Female labor supply: A survey," Handbook of Labor Economics, in: O. Ashenfelter & R. Layard (ed.), Handbook of Labor Economics, edition 1, volume 1, chapter 2, pages 103-204 Elsevier.
- Hersch, Joni & Stratton, Leslie S, 1994. "Housework, Wages, and the Division of Housework Time for Employed Spouses," American Economic Review, American Economic Association, vol. 84(2), pages 120-25, May.
- Jürgen Schupp, 2001. "Private Haushalte als Arbeitsgeber bleiben beschäftigungspolitisch von geringer Bedeutung: "Hausmädchenprivileg" überflüssig," DIW Wochenbericht, DIW Berlin, German Institute for Economic Research, vol. 68(13), pages 201-210.
- Annette Mummert & Friedrich Schneider, 2001. "The German Shadow Economy: Parted in a United Germany?," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 58(3), pages 286-, July.
- repec:zbw:iwhwiw:4-02-3 is not listed on IDEAS
When requesting a correction, please mention this item's handle: RePEc:diw:diwwpp:dp387. 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: (Bibliothek)
If references are entirely missing, you can add them using this form.