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

Aufsätze referiert extern - Web of Science

Peter Haan, Viktor Steiner

In: Finanzarchiv 64 (2008), 3, S. 380-402


We evaluate three policy reforms targeted at older unemployed people: (i) an hourly wage subsidy, (ii) an in-work credit, and (iii) an employment bonus in the form of subsidized social security contributions on low wages. The work-incentive, labor-supply, and welfare effects of these policy reforms are analyzed on the basis of a behavioral microsimulation model for Germany. We find that the simulated labor-supply effects of the three policy reforms would be rather similar and of moderate size. Our results also suggest that the hourly wage subsidy yields the highest welfare gains.

Peter Haan

Head of Department in the Public Economics Department