Reform concepts for social assistance and their consequences for the treasury and labour supply : microeconometric analysis using the socio-economic panel 1986 to 1996 and the simulation model SimTrans

Abstract

"The quantitative significance of social assistance has grown clearly above all since the beginning of the 1980s. This has caused various political players to make very different therapy proposals. Employers and the former Federal Government are pursuing (or pursued) labour market policy objectives with their concept of a wages top-up, as are those who advocate a negative income tax; they want (or wanted) to increase the attractiveness of employment by reducing the amount of net earned income that would be deducted from the social assistance payment. The SPD (Social Democratic Party of Germany) intends to create a special benefit system for certain groups of people in order not to refer them to social assistance. The ideas of the red-green Federal Government and the trade unions point in the same direction. The Greens, PDS (Party of Democratic Socialism) and the Joint Charitable Association (Paritätische Wohlfahrtsverband) intend to raise the benefits in order to improve the material position of social assistance recipients. In this paper the author's own model SimTrans for the microsimulation of the German tax transfer system is used to forecast the effects of various reform concepts on the treasury and labour supply with microeconometric methods on the basis of the socio-economic panel (SOEP) for western and eastern Germany for 1986 to 1996. The simulation model SimTrans permits among other things the calculation of the net income of any German households which are connected with different employment extents of their members before and after a reform of social assistance. For this in addition to social security contributions and direct taxes, the main state social benefits as well as private maintenance payments are taken into account. The labour market policy concepts prove to a large extent to be ineffective or even counterproductive. The other concepts prove to be costly and risky with regard to employment policy. This is particularly true of the PDS proposal, followed by the concepts of the Green Party, the Joint Charitable Association and the SPD." (Author's abstract, IAB-Doku) ((en))

Cite article

Kaltenborn, B. (2000): Reformkonzepte für die Sozialhilfe und ihre Konsequenzen für Fiskus und Arbeitsangebot. Mikroökonometrische Analyse mit dem Sozio-ökonomischen Panel 1986 bis 1996 und dem Simulationsmodell Sim Trans. In: Mitteilungen aus der Arbeitsmarkt- und Berufsforschung, Vol. 33, No. 1, p. 68-79.