Two years ago, DIW Berlin introduced “Familienarbeitszeit”, which offers wage replacement for families in which both partners decide to take on reduced full-time employment (working hours amount¬ing to roughly 80 percent of a full-time job, henceforth referred to as “three-quarters employment”). This study investigates further developments of this model: Apart from a more generous wage replacement variant, the study examines a simplified variant with a lump sum benefit that serves as a sensible alternative, since it entails fewer administrative burdens and lower overall costs. The benefit’s eligibility requirements are also flexibilized: Instead of having to adhere to a fixed working-time requirement (base model), any parent whose working hours fall within the “corridor” of 28 to 32 hours per week is entitled to the benefits (corridor model). The corridor model increases the number of eligible recipients, and thus utilization rises somewhat more than it does with the base model; however, a corridor model would also come with higher costs.
Keywords: Income distribution, migration, demographic trends, macroeconomic effects, unemployment, productivity
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