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The Targeted Negative Income Tax (TNIT) in Germany: Evidence from a Quasi Experiment

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  • Spermann, Alexander

    (University of Freiburg)

  • Strotmann, Harald

    (Institut für Angewandte Wirtschaftsforschung)

Abstract

We report empirical evidence from the first field experiments to be conducted in Germany with program and control groups between 1999 and 2002. The evaluated program called "Targeted Negative Income Tax (TNIT)" is a time-restricted employee subsidy for means-tested welfare recipients. We focus on a unique data set on welfare recipients in Mannheim and estimate the treatment effect of TNIT on participation probability. The average treatment effect is significant and lies between 6.6 and 6.8 percentage points. Since January 1st, 2005, TNIT can be offered to all means-tested long-term unemployed people in Germany by public case managers.

Suggested Citation

  • Spermann, Alexander & Strotmann, Harald, 2006. "The Targeted Negative Income Tax (TNIT) in Germany: Evidence from a Quasi Experiment," IZA Discussion Papers 2067, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp2067
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    Cited by:

    1. Jirjahn, Uwe & Pfeifer, Christian & Tsertsvadze, Georgi, 2006. "Mikroökonomische Beschäftigungseffekte des Hamburger Modells zur Beschäftigungsförderung," IAB-Discussion Paper 200625, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    2. Alexander Spermann, 2015. "How to fight long-term unemployment: lessons from Germany," IZA Journal of Labor Policy, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 4(1), pages 1-15, December.
    3. Sachverständigenrat zur Begutachtung der gesamtwirtschaftlichen Entwicklung (ed.), 2006. "Arbeitslosengeld II reformieren: Ein zielgerichtetes Kombilohnmodell. Expertise im Auftrag des Bundesministers für Wirtschaft und Technologie," Occasional Reports / Expertisen, German Council of Economic Experts / Sachverständigenrat zur Begutachtung der gesamtwirtschaftlichen Entwicklung, number 75364.
    4. Spermann, Alexander, 2006. "Basic Income Reform in Germany: Better Gradualism than Cold Turkey," ZEW Discussion Papers 06-064, ZEW - Leibniz Centre for European Economic Research.
    5. Spermann Alexander, 2017. "Basic Income in Germany: Proposals for Randomised Controlled Trials using Nudges," Basic Income Studies, De Gruyter, vol. 12(2), pages 1-9, December.
    6. Patricia J. Lucas & Karen McIntosh & Mark Petticrew & Helen M. Roberts & Alan Shiell, 2008. "Financial Benefits for Child Health and Well‐Being in Low Income or Socially Disadvantaged Families in Developed World Countries," Campbell Systematic Reviews, John Wiley & Sons, vol. 4(1), pages 1-93.
    7. Oskamp, Frank & Snower, Dennis J., 2006. "The effect of low-wage subsidies on skills and employment," Kiel Working Papers 1292, Kiel Institute for the World Economy (IfW Kiel).

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    More about this item

    Keywords

    field experiments; labor market reform; negative income tax; employee subsidy; long-term unemployment;
    All these keywords.

    JEL classification:

    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

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