Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/200111
Authors: 
Fischer, Benjamin
Jessen, Robin
Steiner, Viktor
Year of Publication: 
2019
Series/Report no.: 
Diskussionsbeiträge 2019/10
Abstract: 
Using information on desired and actual hours of work, we formulate a discrete choice model of constrained labor supply. Using the German Socio-Economic Panel and the microsimulation model STSM, we find that hours and participation elasticities are substantially smaller than those in the conventional model. We evaluate two reforms for Germany. Both redistribute to the working poor. The first reform is financed through an increase in the effective marginal tax rate for welfare recipients, the second through an increase in taxes. The first reform is desirable with equal weights, the second if the social planner has substantial redistributive taste.
Subjects: 
Tax-benefit systems
Household labor supply
Labor market constraints
Involuntary unemployment
Marginal cost of public funds
JEL: 
J22
H21
D10
Persistent Identifier of the first edition: 
Document Type: 
Working Paper
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