This paper bolsters Prescott's (2004) claim that high taxes are responsible for lacklustre labor market performance in continental European countries. We develop a lifecycle model with endogenous skill formation, endogenous labor supply, and endogenous retirement. Labor taxation distorts not...

Using data from the 2006 wave of the German Socio-Economic Panel (GSOEP), this paper analyzes how a minimum wage affects employment, wage inequality, public expenditures, and aggregate income in the low-wage sector. It is shown that a statutory minimum wage of EUR 7.50 per hour would cost...

Do minimum wages reduce in-work-poverty and wage inequality? Or can alternative policies do better? We evaluate theses issues for the exemplary case of Germany that suffers from high unemployment among low-skilled workers and rising wage dispersion at the bottom of the wage distribution. We...

Recent theoretical work shows that precautionary savings increase in response to an increase in first-order risk. In addition, it is known that the welfare state, being an insurance or consumption-smoothing mechanism, reduces the negative welfare effect of future income uncertainty. We build a...

This paper looks into the role the tax-benefit system plays in mitigating the effects of widespread socio-economic risks in the context of individualization, welfare state transformation and recent austerity. We analyse the drivers behind the changing role of the risk-mitigating social policies...

Does the supply of a welfare state create its own demand? Many economic scholars studying welfare arrangements refer to Say's law and insinuate a self-destructive welfare state. However, little is known about the empirical validity of these assumptions and hypotheses. We study the dynamic effect...

Using a factor decomposition of the Gini coefficient we measure the contribution to inequality of direct monetary income flows to and from the Brazilian State. The income flows from the State include public servants' earnings, Social Security pensions, unemployment benefits and Social Assistance...

This paper looks at the effects of tax-benefit systems and social stratification determinants on the probability of poverty among mothers after childbirth and divorce/separation. The analysis was carried out for twelve EU countries, which represent a variety of welfare regimes providing...

This paper examines the consequences of a government mimicking the policy of its competitor by studying the introduction of the welfare state in 19th century Germany. The reform conducted by the conservative government targeted blue-collar workers and aimed to reduce the success of the socialist...

The purpose of this paper is to explore and compare the effectiveness of Minimum Income (MI) schemes in protecting people of working age from poverty in the European Union. Using the EU-wide microsimulation model EUROMOD, we investigate (a) coverage and (b) adequacy of MI schemes in 18...