Workfare: Eine wirksame Alternative zum Kombilohn

Holger Bonin () and Hilmar Schneider ()

No 2399, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: In the debate on in-work benefits in Germany it is often overlooked that such subsidies may only be effective if basic minimum income is remarkably decreased for those who are employable. However, proposals following this principle will hardly achieve political consensus as can be derived from reactions to the model of ifo or the board of economic advisors. IZA is therefore proposing workfare as an effective alternative, which may accomplish a strong incentive for the acceptance of low paid jobs without having to cut the current welfare level. Simulations based on a micro-econometric labor supply model show that this could add to the workforce an additional number of 800,000 workers. Roughly the same effect could be achieved by the ifo model, however, at the expense of massive cuts of disposable income for welfare recipients. Hence, workfare turns out as an efficient alternative. Moreover, there is no useful combination between in-work benefits based on the current welfare level and workfare.

Keywords: labor supply; low-wage subsidies; in-work benefits; discrete choice; Germany (search for similar items in EconPapers)
JEL-codes: H24 J22 J38 J68 (search for similar items in EconPapers)
Pages: 18 pages
Date: 2006-10
New Economics Papers: this item is included in nep-dcm
References: Add references at CitEc
Citations: View citations in EconPapers (17)

Published - published in: Wirtschaftsdienst, 2006, 86 (10), 645-650

Downloads: (external link)
https://docs.iza.org/dp2399.pdf (application/pdf)

Related works:
Journal Article: Workfare: Eine wirksame Alternative zum Kombilohn (2006)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:iza:izadps:dp2399

Ordering information: This working paper can be ordered from
IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany

Access Statistics for this paper

More papers in IZA Discussion Papers from Institute of Labor Economics (IZA) IZA, P.O. Box 7240, D-53072 Bonn, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Holger Hinte ().