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Title:Household Labor Supply Effects of Low-Wage Subsidies in Germany PDF Logo
Authors:Schneider, Hilmar
Kempe, Wolfram
Bonin, Holger
Issue Date:2002
Series/Report no.:IZA Discussion paper series 637
Abstract:This research evaluates the impact on German household labor supply of various subsidy schemes proposed to foster low-wage employment. Using data from the German Socio-Economic Panel, we estimate a discrete choice model of household labor supply. On the basis of the estimated labor supply parameters of husbands and wives, we simulate participation and hours effects of different policies raising low labor earnings at the individual and household levels. In all cases, the labor supply effect is very moderate. Subsidies to individuals promote part-time employment, in particular of second earners, while subsidies based on low household income drive the better qualified partner out of the labor market so that the total number of labor market participants even declines.
Subjects:low-wage subsidies
labor supply
discrete choice
Germany
JEL:J68
J38
H24
J22
Document Type:Working Paper
Appears in Collections:IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)

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