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Publications of the Project: Work Incentives, Earnings-Related Subsidies, and Employment in Low-Wage Labor Markets - Empirical Analysis and Policy Simulations for Germany 

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Diskussionspapiere 792 / 2008

Imposed Benefit Sanctions and the Unemployment-to-Employment Transition: The German Experience

We analyze the effect of imposed benefit sanctions on the unemployment-to-employment transition of unemployed people entitled to unemployment compensation on the basis of register data from the German Federal Employment Agency. We combine propensity score matching with a discrete-time hazard rate model which accounts for the dynamic nature of the treatment. We find positive short- and long-term effects ...

2008| Kai-Uwe Müller, Viktor Steiner
Diskussionspapiere 791 / 2008

Would a Legal Minimum Wage Reduce Poverty? A Microsimulation Study for Germany

In view of rising wage inequality and increasing poverty, the introduction of a legal minimum wage has recently become an important policy issue in Germany. We analyze the distributional effects of the introduction of a nationwide legal minimum wage of € 7.5 per hour on the basis of a microsimulation model which accounts for the complex interactions between individual wages, the tax-benefit system ...

2008| Kai-Uwe Müller, Viktor Steiner
Diskussionspapiere 744 / 2007

"Marginal Employment": Stepping Stone or Dead End? Evaluating the German Experience

"Marginal Employment", i.e. employment at low working hours and earnings not covered by social security, has been gaining importance in the German economy over the past decade. Using a large newly available panel data set and statistical matching techniques, we analyse the effects of marginal employment on future individual outcome variables such as unemployment, regular employment and earnings. In ...

2007| Ronny Freier, Viktor Steiner
Diskussionspapiere 678 / 2007

Benefit-Entitlement Effects and the Duration of Unemployment: An Ex-ante Evaluation of Recent Labour Market Reforms in Germany

Abstract: We analyse benefit-entitlement effects and the likely impact of the recent reform of the unemployment compensation system on the duration of unemployment in Germany on the basis of a flexible discrete-time hazard rate model estimated on pre-reform data from the German Socioeconomic Panel (SOEP). We find (i) relatively strong benefit-entitlement effects for the unemployed who are eligible ...

2007| Hendrik Schmitz, Viktor Steiner
Diskussionspapiere 670 / 2007

The Impact of Income Taxation on the Ratio between Reservation and Market Wages and the Incentives for Labour Supply

This paper extends previous research about the determinants of reservation wages by analysing the effect of progressive income taxation on the ratio between reservation and net market wages. Based on micro data for Germany (SOEP) we show that joint income taxation in Germany which discriminates by marital status, has a strong and highly significant impact on the reservation/market wage ratio. Relative ...

2007| Marco Caliendo, Ludovica Gambaro, Peter Haan
Diskussionspapiere 669 / 2007

Intertemporal Labor Supply Effects of Tax Reforms

In the year 2000, the German government passed the most ambitious tax reform in post-war German history aiming at a significant tax relief for households. One central aim of this tax reform was to improve work incentives and, thereby, foster employment. In this paper, I estimate an intertemporal discrete choice model of female labor supply that allows to analyze the behavioral effects of the tax reform ...

2007| Peter Haan
Diskussionspapiere 662 / 2007

'Marginal Employment' and the Demand for Heterogenous Labour: Empirical Evidence from a Multi-factor Labour Demand Model for Germany

We develop a structural multi-factor labour demand model which distinguishes between eight labour categories including non-standard types of employment such as marginal employment. The model is estimated for both the number of workers and total working hours using a new panel data set. For unskilled and skilled workers in full-time employment, we find labour demand elasticities similar to previous ...

2007| Ronny Freier, Viktor Steiner
Diskussionspapiere 661 / 2007

Self-Employment - a Way to End Unemployment? Empirical Evidence from German Pseudo-Panel Data

This paper contributes to the policy-relevant question whether self-employment is a way out of (long-term) unemployment. We estimate the relationship between the entry rate into self-employment and previous (long-term) unemployment on the basis of pseudo-panel data for Germany in the period 1996-2002. The estimation method accounts for cohort fixed effects and measurement errors induced by the pseudo ...

2007| Daniela Glocker, Viktor Steiner
Diskussionspapiere 573 / 2006

Estimation of Multinomial Logit Models with Unobserved Heterogeneity Using Maximum Simulated Likelihood

In this paper we suggest a Stata routine for multinomial logit models with unobserved heterogeneity using maximum simulated likelihood based on Halton sequences. The purpose of this paper is twofold: First, we provide a description of the technical implementation of the estimation routine and discuss its properties. Further, we compare our estimation routine to the Stata program gllamm which solves ...

2006| Peter Haan, Arne Uhlendorff
Diskussionspapiere 569 / 2006

Evaluating the German "Mini-Job" Reform Using a True Natural Experiment

Increasing work incentives for people with low incomes is a common topic in the policy debate across European countries. The "Mini-Job" reform in Germany - introduced on April 1, 2003 - can be seen in line with these policies, exempting labour income below a certain threshold from taxes and employees' social security contributions. We carry out an ex-post evaluation to identify the short-run effects ...

2006| Marco Caliendo, Katharina Wrohlich