Effects of Introducing Compulsory Social Insurance Contributions on Marginal Employment in '630-Dm Jobs' - an Evaluation of the Reform Law

DIW Discussion Paper No. 257

29 Pages Posted: 10 Nov 2003

See all articles by Johannes Schwarze

Johannes Schwarze

University of Bamberg; German Institute for Economic Research (DIW Berlin); IZA Institute of Labor Economics

Guido Heineck

University of Bamberg; IZA Institute of Labor Economics

Date Written: July 2001

Abstract

Using longitudinal data from the GSOEP, we analyse the behaviour of jobholders in response to the introduction of social insurance contributions on minimal employment (a specific form of part-time employment in Germany). As the so-called 'exclusively marginal employed' jobholders and 'marginal employed' double-jobholders are affected quite differently, separate empirical analyses are carried out. The dynamics of marginal employment as well as the dynamics of second jobholding are compared to a pseudo-contrafactual situation to analyse the effects of the reform apart from possible 'natural' changes. Using econometric methods, we furthermore analyse which determinants affect the stay in or the exit from marginal employment or double-jobholding. The results show that marginal employment has undergone a change in structure: marginal employed double-jobholders are likely to be substituted by exclusively marginal employed jobholders, which can be explained both from the labour-supply side as well as from the labour-demand side. The reform, one the one hand, is successful with respect to the inclusion of incomes from marginal employment to finance social insurance systems. If, one the other hand, jobholders, married women especially, will build up substantial entitlements to social insurance benefits remains questionable, as the reform caused decreasing incentives to pick up a regular full- or part-time employment.

Note: Downloadable document is in German.

Keywords: labour supply, marginal employment, double jobholding, evaluation of labour-market policy measures

JEL Classification: H31, J22, J62

Suggested Citation

Schwarze, Johannes and Heineck, Guido, Effects of Introducing Compulsory Social Insurance Contributions on Marginal Employment in '630-Dm Jobs' - an Evaluation of the Reform Law (July 2001). DIW Discussion Paper No. 257. Available at SSRN: https://ssrn.com/abstract=296201 or http://dx.doi.org/10.2139/ssrn.296201

Johannes Schwarze (Contact Author)

University of Bamberg ( email )

Kirschaeckerstrasse 39
Bamberg 96045
Germany
+49 951 863 2600 (Phone)
+49 951 863 5569 (Fax)

German Institute for Economic Research (DIW Berlin)

Mohrenstra├če 58
Berlin, 10117
Germany

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Guido Heineck

University of Bamberg

Feldkirchenstr. 21
Bamberg, 96052
Germany

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

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