Sozialhilfe, Lohnabstand, Leistungsanreize und Mindestlohnarbeitslosigkeit

Alfred Boss

No 1075, Kiel Working Papers from Kiel Institute for the World Economy (IfW Kiel)

Abstract: The difference between the potential net wage income and the social welfare payments is measured for different types of private households in Germany. In 2001, the difference is small for households consisting of at least three persons. For three types of households the difference is calculated for the 1962–2001 period; it turns out that it decreased significantly. The (explicit and implicit) marginal tax rates for wage income of the recipients of social assistance are extremely high (up to 100 percent). Thus, the incentives to work are strongly impaired. The downward adjustment of wages for low skilled workers was impeded by the system of social assistance. As a consequence, unemployment increased.

Keywords: incentives to work; poverty trap; unemployment; social assistance (search for similar items in EconPapers)
JEL-codes: E24 H31 H53 (search for similar items in EconPapers)
Date: 2001
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Citations: View citations in EconPapers (10)

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