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...

We develop a structural multi-factor labour demand model which distinguishes between eight labour categories including non-standard types of employment such as marginal employment. The model is estimated for both the number of workers and total working hours using a new panel data set. For...

Turning unemployment into self-employment has become a major focus of German active labour market policy (ALMP) in recent years. If effective, this would not only reduce Germany’s persistently high unemployment rate, but also increase its notoriously low self-employment rate. Empirical...

We evaluate three policy reforms targeted at older unemployed people: (i) an hourly wage subsidy, (ii) an in-work credit, and (iii) a subsidy of social security contributions on low wages. The work incentive, labour supply and welfare effects of these hypothetical reforms are analysed on the...

Turning unemployment into self-employment has become an increasingly important part of active labor market policies (ALMP) in many OECD countries. Germany is a good example where the spending on start-up subsidies for the unemployed accounted for nearly 17% of the total spending on ALMP in 2004....

When unemployed persons go into business, they often are characterized as necessity entrepreneurs, because push factors, namely their unemployment, likely prompted their decision. In contrast to this, business founders who have been previously employed represent opportunity entrepreneurs because...