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?Making Work Pay? in a Rationed Labour Market: The Mini-Job Reform in Germany

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dc.creator Bargain, Olivier
dc.creator Caliendo, Marco
dc.creator Haan, Peter
dc.creator Orsini, Kristian
dc.date 2005
dc.date.accessioned 2013-10-16T06:59:43Z
dc.date.available 2013-10-16T06:59:43Z
dc.date.issued 2013-10-16
dc.identifier http://hdl.handle.net/10419/18387
dc.identifier ppn:505102307
dc.identifier.uri http://koha.mediu.edu.my:8181/xmlui/handle/10419/18387
dc.description To tackle mass unemployment and increase participation rates, the German government over recent years has mainly focused on supply side strategies, including 'making work pay' policies. The 2003 Mini-Job reform introduced an extended subsidy of social security contributions for low wage workers. In this paper, we evaluate the employment effects of this reform using a behavioural tax-benefit microsimulation model. Ex-ante micro policy evaluations based on labour supply models usually ignore involuntary unemployment. This leads to biased estimates of labour supply elasticities and erroneous predictions of the effects of the measure. This aspect is all the more important in a country like Germany, characterized by high unemployment. In this analysis we evaluate the employment effects of the Mini-Job reform by controlling for involuntary unemployment through a double-hurdle model. When focusing on the main labour force, we show that the Mini-Job reform has only a small positive effect on the extensive margin, which is outweighed by a reduction of working hours at the intensive margin.
dc.language eng
dc.publisher Deutsches Institut für Wirtschaftsforschung (DIW) Berlin
dc.relation DIW-Diskussionspapiere 536
dc.rights http://www.econstor.eu/dspace/Nutzungsbedingungen
dc.subject J22
dc.subject H31
dc.subject C25
dc.subject C52
dc.subject ddc:330
dc.subject Tax-benefit Systems
dc.subject Microsimulation
dc.subject Household Labour Supply
dc.subject Multinomial Logit
dc.subject Involuntary Unemployment
dc.title ?Making Work Pay? in a Rationed Labour Market: The Mini-Job Reform in Germany
dc.type doc-type:workingPaper


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