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Title:Evaluating the German 'Mini-Job' Reform Using a True Natural Experiment PDF Logo
Authors:Caliendo, Marco
Wrohlich, Katharina
Issue Date:2006
Series/Report no.:DIW-Diskussionspapiere 569
Abstract: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 of this reform. Our identification strategy uses an exogenous variation in the interview months in the German Socio-Economic Panel, that allows us to distinguish groups that are (or are not) affected by the reform. To account for seasonal effects we additionally use a difference-in-differences strategy. The results show that the short-run effects of the reform are limited. We find no significant short-run effects for marginal employment. However, there is evidence that single men who are already employed react immediately and increase secondary job holding.
Subjects:Evaluation
Natural Experiment
Difference-in-Differences
Marginal Employment
JEL:J68
C25
H31
Document Type:Working Paper
Appears in Collections:DIW-Diskussionspapiere
Publikationen von Forscherinnen und Forschern des DIW

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