Service cheques in Europe - a model for Germany? Employment effects and macro-economic costs: five scenarios

Dirk Finger

No FS I 97-201a, Discussion Papers, Research Unit: Labor Market Policy and Employment from WZB Berlin Social Science Center

Abstract: In the mid-nineties, near all european governments look almost desperately for a panacea against sluggish growth and high unemployment. Since this problem concerns mainly low-skilled workers, the creation of low-profile jobs in the personal service sector still seems to be one of the most promising solutions. After a long period of scepticism dominating economic thinking about the growth potential of this sector, a renaissance of the service-idea is taking place at the moment. The so called service cheque finds itself at the centre of this new policy approach. Its objective is twofold: to subsidize demand and to reduce the cost of labour. After France and Belgium, Germany is the third country introducing it at a large scale. The findings of this essay back up the opinion that direct welfare benefits, promoting the use of service-cheques, are preferable to those that rely on tax-relief incentives. On the other hand, the idea to provide households with a special welfare benefit in terms of service-cheques could prove risky once the system's high elasticity of output provokes uncontrollable budget deficits. Alternative models should therefore also be considered.

Date: 1997
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://www.econstor.eu/bitstream/10419/43920/1/257914161.pdf (application/pdf)

Related works:
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:zbw:wzblpe:fsi97201a

Access Statistics for this paper

More papers in Discussion Papers, Research Unit: Labor Market Policy and Employment from WZB Berlin Social Science Center Contact information at EDIRC.
Bibliographic data for series maintained by ZBW - Leibniz Information Centre for Economics ().