Generous income support programs as provided by European welfare states have often been blamed to hamper employment. This paper investigates the importance of incentives inherent in the tax-benefit system for the individual decision to take up work. Using German microdata over the period 1993 -...

This paper examines to what extent marital sorting affects cross-sectional earnings inequality in Germany over the past three decades, while explicitly taking into account labor supply choices. Using rich micro data, the observed distribution of couples' earnings is compared to a counterfactual...

We quantify the importance of precautionary labor supply using data from the German Socio-Economic Panel (SOEP) for 2001-2012. We estimate dynamic labor supply equations augmented with a measure of wage risk. Our results show that married men choose about 2.5% of their hours of work or one week...

This paper examines to what extent non-random sorting of spouses affects earnings inequality while explicitly disentangling effects from increasing assortativeness in couple formation from changing patterns of couples' labor supply behavior. Using German micro data, earnings distributions of...

This paper examines the added worker effect (AWE), which refers to the increase of labor supply of individuals in response to a sudden financial shock in family income, that is, unemployment of their partner. While previous empirical studies focus on married women's response to those shocks, I...

We analyze the effects of three alternative proposals to reform the taxation of families relative to the current German system of joint taxation of couples and child allowances: a French-type family splitting and two full family splitting proposals. The empirical analysis of the effects of these...

We use the German Socio-Economic Panel to show that introducing a high-impact statutory minimum wage causes an increase in reservation wages of approximately 4 percent at the low end of the distribution. The shifts in reservation wages and observed wages due to the minimum wage reform are...

Existing research has found little to no evidence for an added worker effect. However, studies to date have only analysed individuals' actual labor supply responses to their partners' job loss, neglecting to consider a potential mismatch between desired and actual labor supply adjustments. Using...

This paper analyzes the impact of job insecurity perceptions on individual well-being. In contrast to previous studies, we explicitly take into account perceptions about both the likelihood and the potential costs of job loss and demonstrate that most contributions to the literature suffer from...

The tertiarization, or perhaps more accurately, the deindustrialization of the economy has left deep scars on cities. It is evident not only in the industrial wastelands and empty factory buildings scattered throughout the urban landscape, but also in the income and social structures of cities....