Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/18290 
Year of Publication: 
2004
Series/Report no.: 
DIW Discussion Papers No. 438
Publisher: 
Deutsches Institut für Wirtschaftsforschung (DIW), Berlin
Abstract: 
We analyze the work incentives and labor supply effects of the so-called mini- jobs reform (subsidies of social security contributions to people with low-earnings jobs) introduced in Germany in April 2003. The analysis is based on a structural labor supply model embedded in a detailed tax-benefit microsimulation model for which we use the German Socio-Economic Panel (GSOEP). Our simulation results show that the likely employment effects of the mini-jobs reform will be small. The small positive participation effect is outweighed by a negative hours effect among already employed workers. The fiscal effects of the reform are also likely to be negative. We conclude that the analyzed mini-job reform is not an effective policy to increase employment of people with low earnings capacity.
JEL: 
H31
J22
Document Type: 
Working Paper

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