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Benefit Take-Up and Labor Supply Incentives of Interdependent Means-Tested Benefit Programs for Low-Income Households

Author

Listed:
  • Kerstin Bruckmeier

    (Institute for Employment Research (IAB) of the German Federal Employment Agency (BA))

  • Jürgen Wiemers

    (Institute for Employment Research (IAB) of the German Federal Employment Agency (BA))

Abstract

Using a microsimulation model based on representative panel data, we analyze the outcomes of three major means-tested interdependent benefit programs that are available for low-income households in Germany with respect to benefit take-up and labor supply incentives. The results show a distinct overlap between the programs and high rates of non-take-up, indicating that the effectiveness of the programs in reaching their target groups could be improved. Furthermore, we find that workers from low-income households are confronted with a complex benefit structure and high marginal tax rates, which negatively affects the individual labor supply.

Suggested Citation

  • Kerstin Bruckmeier & Jürgen Wiemers, 2018. "Benefit Take-Up and Labor Supply Incentives of Interdependent Means-Tested Benefit Programs for Low-Income Households," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 60(4), pages 583-604, December.
    • Handle: RePEc:pal:compes:v:60:y:2018:i:4:d:10.1057_s41294-017-0041-5
    DOI: 10.1057/s41294-017-0041-5
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    2. Schöb Ronnie, 2020. "Eine neue solidarische Grundsicherung," Perspektiven der Wirtschaftspolitik, De Gruyter, vol. 21(2), pages 162-184, June.
    3. Gyubeom Park & Kichan Yoon & Munjae Lee, 2021. "Regional Factors Influencing Non-Take-Up for Social Support in Korea Using a Spatial Regression Model," SAGE Open, , vol. 11(4), pages 21582440211, December.
    4. Jennifer Feichtmayer & Regina T. Riphahn, 2023. "Intergenerational Transmission of Welfare Benefit Receipt: Evidence from Germany," Working Papers 229, Bavarian Graduate Program in Economics (BGPE).
    5. Mario Bossler & Thorsten Schank, 2023. "Wage Inequality in Germany after the Minimum Wage Introduction," Journal of Labor Economics, University of Chicago Press, vol. 41(3), pages 813-857.
    6. Buhlmann, Florian & Kolb, Michael & Siegloch, Sebastian, 2020. "Einführung einer Garantiesicherung: Endbericht," ZEW Expertises, ZEW - Leibniz Centre for European Economic Research, number 230961.
    7. Diego Muñoz-Higueras & Stephan Köppe & Rafael Granell & Amadeo Fuenmayor, 2024. "Non-take-up of in-work benefits: determinants, benefit erosion and indexing," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 58(1), pages 1-19, December.
    8. Aleksandra Kolasa, 2022. "The long-term impact of quasi-universal transfers to older households," Working Papers 2022-28, Faculty of Economic Sciences, University of Warsaw.
    9. Feld, Lars P. & Schmidt, Christoph M. & Schnabel, Isabel & Truger, Achim & Wieland, Volker, 2019. "Den Strukturwandel meistern. Jahresgutachten 2019/20 [Dealing with Structural Change. Annual Report 2019/20]," Annual Economic Reports / Jahresgutachten, German Council of Economic Experts / Sachverständigenrat zur Begutachtung der gesamtwirtschaftlichen Entwicklung, volume 127, number 201920, September.
    10. Buhlmann, Florian & Siegloch, Sebastian & Stichnoth, Holger & Hebsaker, Michael, 2021. "Verteilungswirkungen der Reformpläne im Koalitionsvertrag 2021-2025: Eine Analyse auf Basis des ZEW-EviSTAModells und des Sozio-oekonomischen Panels (SOEP)," ZEW Expert Briefs 21-12, ZEW - Leibniz Centre for European Economic Research.

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    More about this item

    Keywords

    Social assistance; Labor supply; Non-take-up; Microsimulation;
    All these keywords.

    JEL classification:

    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
    • C15 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Statistical Simulation Methods: General

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