The effects of the new mini- and midi-jobs on the suply of labour * an ex-ante evaluation

Abstract

"The legal provisions regarding marginal part-time employment relationships were fundamentally altered for the second time in four years on 1 April 2003. Key components of the 2003 reform are the increase in the limit of what constitutes a marginal part-time job from EURO 325 to EURO 400 (mini-jobs) and the introduction of a flexible zone between EURO 400 and EURO 800 (midi-jobs). This paper examines, in the form of an ex-ante evaluation, what maximum effects on the supply of labour can be expected from this reform of marginal part-time employment. Theoretical considerations on the effect on the supply of labour show that after the reform there is an incentive for people in regular employment without receipt of transfer payments to earn EURO 400 to EURO 800 instead of the previous EURO 325. In addition to that, mini-jobs become attractive for people already in employment as a second income possibility. For people who already have a marginal part-time job as a second job there is only reason to extend their activity up to the limit of EURO 400. Mini-jobs are also interesting for spouses who did not work previously. In the empirical part of the study, the labour supply response of people in regular employment is simulated with the aid of the tax-transfer-microsimulation model STSM. The data basis is the socio-economic panel (SOEP). First the net incomes that changed as a result of the reform are calculated (microsimulation). Then the supply effect resulting from this is predicted using a con-ditional logit model. The labour supply response in the case of people without benefit entitlement is weak. In addition, in accordance with the theoretical considerations, households in receipt of transfer payments show a clearly even weaker response." (Author's abstract, IAB-Doku) ((en))

Cite article

Arntz, M., Feil, M. & Spermann, A. (2003): Die Arbeitsangebotseffekte der neuen Mini- und Midijobs. Eine ex-ante Evaluation. In: Mitteilungen aus der Arbeitsmarkt- und Berufsforschung, Vol. 36, No. 3, p. 271-290.