Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/18462
Authors: 
Caliendo, Marco
Wrohlich, Katharina
Year of Publication: 
2006
Series/Report no.: 
DIW Discussion Papers 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

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