Does Marginal Employment Substitute Regular Employment? - A Heterogeneous Dynamic Labor Demand Approach for Germany

38 Pages Posted: 22 Aug 2008

See all articles by Lena Jacobi

Lena Jacobi

Rhine-Westphalia Institute for Economic Research (RWI-Essen)

Sandra Schaffner

RWI - Leibniz Institute for Economic Research

Date Written: July 1, 2008

Abstract

In Germany we observe a decline in regular employment and an increase in atypical forms of employment. Especially marginal part-time employment which is characterized by lower tax rates and lower social security contributions increased substantially after a reform in 2003 made this type of employment even more attractive to employers. In our paper we estimate the substitutability of regular employment by marginal part-time employment using data on the industry level before and after the reform.We detect high substitution elasticities with respect to three skill categories of regular employment in both time periods. The substitutability of unskilled full-time workers increased significantly after the reform.

Keywords: Mini-Jobs, dynamic labor demand, elasticities, Hartz-reforms

JEL Classification: J23, J31

Suggested Citation

Jacobi, Lena and Schaffner, Sandra, Does Marginal Employment Substitute Regular Employment? - A Heterogeneous Dynamic Labor Demand Approach for Germany (July 1, 2008). Ruhr Economic Paper No. 56. Available at SSRN: https://ssrn.com/abstract=1244507 or http://dx.doi.org/10.2139/ssrn.1244507

Lena Jacobi

Rhine-Westphalia Institute for Economic Research (RWI-Essen) ( email )

Hohenzollernstr. 1-3
Essen, 45128
Germany

HOME PAGE: http://www.rwi-essen.de/jacobi

Sandra Schaffner (Contact Author)

RWI - Leibniz Institute for Economic Research ( email )

Hohenzollernstr. 1-3
Essen, 45128
Germany

HOME PAGE: http://www.rwi-essen.de/schaffner

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