Midijob reforms, Minijob traps, and employers' response

Abstract

"In Germany, jobs with monthly earnings of up to 2,000 Euro (Mini- and Midijobs) are subsidized: employees pay reduced social insurance contributions. Among various reform elements, since Oct. 1, 2022, employers have to pay higher social insurance contributions on Midijobs compared to regular employment. Midijobs were introduced in 2003 to address the Minijob trap: individuals face strong disincentives to extend their labor supply beyond the Minijob earnings limit due to the abrupt increase in payroll and income taxes. This paper examines whether recent Midijob reforms contribute to reaching this objective, and whether employers changed their hiring behavior in response to increased contribution rates. We exploit reliable administrative data and find that the Minijob trap problem was not ameliorated by the reforms. In addition, employers avoided Midijobs in their hiring behavior after the reforms." (Author's abstract, IAB-Doku) ((en))

Cite article

Sauer, I., Collischon, M. & Riphahn, R. (2026): Midijob reforms, Minijob traps, and employers' response. (LASER discussion papers 156), Erlangen, 28 p.