Please use this identifier to cite or link to this item:
Haan, Peter
Prowse, Victoria
Uhlendorff, Arne
Year of Publication: 
Series/Report no.: 
DIW Discussion Papers 790
In this paper we develop a dynamic structural life-cycle model of labor supply behavior which fully accounts for the effects of income tax and transfers on labor supply incentives. Additionally, the model recognizes the demand side driven rationing risk that might prevent individuals from realizing their optimal labor supply state, resulting in involuntary unemployment. We use this framework to study the employment effects of transforming a traditional welfare state, as is currently in place in Germany, towards a more Anglo-American system in which a large proportion of transfers are paid to the working poor.
Life-cycle labor supply
Involuntary unemployment
In-work credits
Document Type: 
Working Paper

Files in This Item:
476.78 kB

Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.