'Marginal employment' and the demand for heterogeneous labour - elasticity estimates from a multi-factor labour demand model for Germany

Ronny Freier and Viktor Steiner

Applied Economics Letters, 2010, vol. 17, issue 12, 1177-1182

Abstract: We develop a structural multi-factor labour demand model which distinguishes between eight labour categories including marginal employment, i.e. low-paying jobs with only a few working hours and partially exempted from employee's social security contributions. Using a new panel data set for Germany, the model is estimated both for the number of workers and total working hours. For unskilled and skilled workers in full-time employment, we find labour demand elasticities similar to previous estimates. Our new estimates of own-wage elasticities for marginal employment range between -0.13 (number of male workers in West Germany) to -1 (working hours for women).

Date: 2010
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DOI: 10.1080/00036840902862140

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