Benefit Take-Up and Labor Supply Incentives of Interdependent Means-Tested Benefit Programs for Low-Income Households

Kerstin Bruckmeier () and Jürgen Wiemers ()
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Kerstin Bruckmeier: Institute for Employment Research (IAB) of the German Federal Employment Agency (BA)
Jürgen Wiemers: Institute for Employment Research (IAB) of the German Federal Employment Agency (BA)

Comparative Economic Studies, 2018, vol. 60, issue 4, No 5, 583-604

Abstract: Abstract Using a microsimulation model based on representative panel data, we analyze the outcomes of three major means-tested interdependent benefit programs that are available for low-income households in Germany with respect to benefit take-up and labor supply incentives. The results show a distinct overlap between the programs and high rates of non-take-up, indicating that the effectiveness of the programs in reaching their target groups could be improved. Furthermore, we find that workers from low-income households are confronted with a complex benefit structure and high marginal tax rates, which negatively affects the individual labor supply.

Keywords: Social assistance; Labor supply; Non-take-up; Microsimulation (search for similar items in EconPapers)
JEL-codes: C15 H31 I38 (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (12)

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DOI: 10.1057/s41294-017-0041-5

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