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Making Work Pay for the Elderly Unemployed: Evaluating Alternative Policy Reforms for Germany

Discussion Papers 641, 26 S.

Peter Haan, Viktor Steiner

2006. Nov.

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Published in: FinanzArchiv 64 (2008), 3, 380-402

Abstract

We evaluate three policy reforms targeted at older unemployed people: (i) an hourly wage subsidy, (ii) an in-work credit, and (iii) a subsidy of social security contributions on low wages. The work incentive, labour supply and welfare effects of these hypothetical reforms are analysed on the basis of a detailed micro-simulation model for Germany which includes a structural household labour supply model. We find that the simulated labour supply effects of the three policy reforms would be rather similar and of moderate size, ranging between 20,000 and 30,000 older women and between 10,000 and 20,000 older men. Our results also suggest that the hourly wage subsidy yields the highest welfare gains.

Peter Haan

Head of Department in the Public Economics Department



JEL-Classification: J21;J48;H21
Keywords: in-work support, wage subsidies, unemployment, elderly workers
Frei zugängliche Version: (econstor)
http://hdl.handle.net/10419/18534

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