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Evaluating the German 'Mini-Job' reform using a natural experiment

Marco Caliendo () and Katharina Wrohlich ()

Applied Economics, 2010, vol. 42, issue 19, 2475-2489

Abstract: Increasing work incentives for people with low income is a common topic in the policy debate across European countries. The 'Mini-Job' reform in Germany had a similar motivation. We carry out an ex-post evaluation to identify the short-run effects of this reform. Our identification strategy uses an exogenous variation in the interview months in the Socio-Economic Panel Study (SOEP), which allows us to distinguish groups that are affected by the reform from those who are not. To account for seasonal effects we additionally use a Difference-In-Differences (DID) strategy. Descriptives show that there is a post-reform increase in the number of mini-jobs. However, we show that this increase cannot be causally related to the reform, since the short-run effects are very limited. Only single men seem to react immediately and increase secondary job holding.

Date: 2010
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Working Paper: Evaluating the German "Mini-Job" Reform Using a True Natural Experiment (2006) Downloads
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