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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

    () (University of Potsdam)

  • Künn, Steffen

    () (Maastricht University)

  • Uhlendorff, Arne

    () (CREST)

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.

Suggested Citation

  • Caliendo, Marco & Künn, Steffen & Uhlendorff, Arne, 2016. "Earnings Exemptions for Unemployed Workers: The Relationship between Marginal Employment, Unemployment Duration and Job Quality," IZA Discussion Papers 10177, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp10177
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Carrillo-Tudela, Carlos & Launov, Andrey & Robin, Jean-Marc, 2018. "The Fall in German Unemployment: A Flow Analysis," IZA Discussion Papers 11442, Institute for the Study of Labor (IZA).
    2. repec:eee:labeco:v:47:y:2017:i:c:p:182-201 is not listed on IDEAS
    3. Bergemann, Annette & Pohlan, Laura & Uhlendorff, Arne, 2017. "The impact of participation in job creation schemes in turbulent times," Labour Economics, Elsevier, vol. 47(C), pages 182-201.
    4. Bergemann, Annette & Pohlan, Laura & Uhlendorff, Arne, 2016. "Job Creation Schemes in Turbulent Times," IZA Discussion Papers 10369, Institute for the Study of Labor (IZA).
    5. Matthias Collischon & Kamila Cygan-Rehm & Regina T. Riphahn, 2018. "Employment Effects of Payroll Tax Subsidies," CESifo Working Paper Series 7111, CESifo Group Munich.
    6. Boll, Christina & Boysen-Hogrefe, Jens & Wolf, André, 2017. "Wie viel Soziale Marktwirtschaft steckt in den Wahlprogrammen zur Bundestagswahl 2017?," HWWI Policy Papers 105, Hamburg Institute of International Economics (HWWI).
    7. 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.
    8. repec:bla:labour:v:31:y:2017:i:4:p:394-414 is not listed on IDEAS
    9. Kyyrä, Tomi & Arranz, José María & García-Serrano, Carlos, 2017. "Does Part-Time Work Help Unemployed Workers to Find Full-Time Work? Evidence from Spain," IZA Discussion Papers 10770, Institute for the Study of Labor (IZA).

    More about this item

    Keywords

    employment stability; job search; unemployment duration; mini-job; marginal employment; multivariate duration models;

    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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