It is often argued that the high level of welfare claims in Germany causes little incentive for workers with low productivity to seek for a job. We examine the influence of the ratio between estimated potential labor income and the welfare payment level on the probability of leaving social...

The paper simulates the labor market impact of a fixed allowance for social insurance contributions. Based on a discrete choice labor supply model estimated on data from the German Socio-Economic Panel, we evaluate household utility changes triggered by the reform, accounting for behavioral...

This research evaluates the impact on German household labor supply of various subsidy schemes proposed to foster low-wage employment. Using data from the German Socio-Economic Panel, we estimate a discrete choice model of household labor supply. On the basis of the estimated labor supply...