Work Incentives. Earnings-Related Subsidies, and Employment in Low-Wage labor markets - Empirical Analysis and Policy Simulations for Germany
Final Report Abstract
The project has contributed to the empirical analysis of the work incentive and employment effects of earnings-related subsidies in the presence of high structural unemployment when labor market flexibility is hindered by wage rigidity related to institutional factors, in particular minimum wages and the tax-benefit system. The methodological contribution of the project was the further development of a structural household labor supply model that accounts for demand-side rationing in low-wage labor markets and the disincentive effects to take up low-wage jobs induced by the tax-benefit system. Another important methodological contribution was the application of ex-post evaluation methods to policy reforms (like the mini-jobs reform, or the sectoral minimum wage) in comparison to ex-ante evaluation studies based on the developed behavioural microsimulation model. In addition to the methodological contributions and the empirical analysis of the relationships between work incentives, earnings-related subsidies and employment, the project has contributed to the evaluation of public policies aimed at reducing (long-term) unemployment and increasing employment in the low-wage sector of the German economy. The ex-ante and ex-post evaluation studies include the analysis of the so-called “mini-jobs” reform, the reform of the unemployment compensation system, several wage subsidy schemes, and the introduction of a general legal minimum wage in Germany, as it is has been perceived in the recent policy debate. These evaluation studies have contributed to the policy debate by providing estimates of the labor market and welfare effects of recently implemented or suggested reforms. An important conclusion from the policy analysis is that the effects of wage-subsidy programs, the unemployment compensation system, and minimum wages are closely related, and analysing these effects in isolation is likely to yield misleading policy conclusions.
Publications
- Social welfare reform and the low-wage labor market in Germany: What
works and what doesn’t?. Applied Economics Quarterly Supplement, Issue 55. 2004, pp. 57-78.
Steiner, V.
- Aktive Arbeitsmarktpolitik in Deutschland. Bestandsaufnahme und Bewertung der mikroökonomischen Evaluationsergebnisse. Zeitschrift für ArbeitsmarktForschung – Journal of Labour Market Research, Vol. 38. 2005, Issue 2/3, pp. 386-418.
Caliendo, M., V. Steiner
- Work incentives and labor supply effects of the „Mini-Jobs Reform’ in Germany. Empirica, Vol. 32. 2005, Issue 1, pp. 91–116.
Steiner, V., K. Wrohlich
(See online at https://doi.org/10.1007/s10663-005-1982-x) - Mehr Beschäftigung durch Subventionierung der Sozialbeiträge? Eine empirische Evaluation aktueller Reformvorschläge. Perspektiven der Wirtschaftspolitik, Vol. 8. 2007, Issue 4, pp. 378–388.
Haan, P., V. Steiner
(See online at https://dx.doi.org/10.1111/j.1468-2516.2007.00257.x) - ´Marginal employment´: stepping stone or dead end? Evaluating the German experience. Zeitschrift für Arbeitsmarktforschung 41 (2008), 2/3, S. 223-243
Freier, R., V. Steiner
- The Impact of Income Taxation on the Ratio between Reservation and Market Wages and the Incentives for Labour Supply. Applied Economics Letters, Vol. 16. 2009, Issue 9, pp. 877-883.
Caliendo, M., L. Gambaro, P. Haan
(See online at https://doi.org/10.1080/13504850701222103) - Would a Legal Minimum Wage Reduce Poverty? A Microsimulation
Study for Germany, Journal of Income Distribution, Vol. 18. 2009, Number 3-4, pp. 131-151.
Müller K.-U., V. Steiner
- Evaluating the German 'Mini-Jobs' Reform Using a True Natural Experiment. Applied Economics, Vol. 42. 2009, Issue 19, pp. 2475-2489.
Caliendo, M., K. Wrohlich
- Making work pay in a rationed labour market. The Mini-Job reform in Germany. Journal of Population Economics, Vol. 23. 2010, Issue 1, pp. 323–351.
Bargain, O., M. Caliendo, P. Haan, K. Orsini
(See online at https://doi.org/10.1007/s00148-008-0220-9) - ´Marginal Employment´ and the demand for heterogeneous labour: Empirical evidence from a multi-factor labour demand model for Germany. Applied Economics Letters, Vol. 17. 2010, Issue 12, pp. 1177-1182.
Freier, R., V. Steiner
(See online at https://doi.org/10.1080/00036840902862140) - Beschäftigungswirkungen von Lohnsubventionen und Mindestlöhnen – Zur Reform des Niedriglohnsektors in Deutschland. Zeitschrift für ArbeitsmarktForschung, Vol. 44. 2011, Issue 1–2, pp. 181–195.
Müller K.-U., V. Steiner
(See online at https://dx.doi.org/10.1007/s12651-011-0073-7)
