Long-term Participation Tax Rates
Bartels, Charlotte ;  Universität <Berlin, Freie Universität> / Fachbereich Wirtschaftswissenschaft

Main titleLong-term Participation Tax Rates
AuthorBartels, Charlotte
InstitutionUniversität <Berlin, Freie Universität> / Fachbereich Wirtschaftswissenschaft
No. of Pages32 S.
Series Discussion paper / School of Business & Economics ; 2012/20 : Economics
KeywordsWelfare; Work incentives; Unemployment; Unemployment Insurance
Classification (DDC)336 Public finance
AbstractGenerous income support programs as provided by European welfare states have often been blamed to reduce work incentives for lower income classes and to increase durations of unemployment. Standard studies measure work incentives based on annual income concepts. This paper analyzes how work incentives inherent in the German tax-benefit system evolve when extending the time horizon to three years (long-term). Participation tax rates are computed for 3-year periods 1995-1997 and 2005-2007 to reveal potential effects of the labor market reforms between 2003 and 2005. Results show that long-term work incentives increased even more than short-term work incentives. Particularly for middle-income individuals, this is largely explained by the abolition of earnings-related unemployment assistance.
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FU DepartmentDepartment Business and Economics
Other affiliation(s)Öffentliche Finanzen und Sozialpolitik
Year of publication2012
Type of documentBook
Terms of use/Rights Nutzungsbedingungen
Created at2012-10-10 : 01:16:22
Last changed2015-01-22 : 04:40:53
Static URLhttp://edocs.fu-berlin.de/docs/receive/FUDOCS_document_000000014675