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"Marginal Employment": Stepping Stone or Dead End? Evaluating the German Experience

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  • Ronny Freier
  • Viktor Steiner

Abstract

"Marginal Employment", i.e. employment at low working hours and earnings not covered by social security, has been gaining importance in the German economy over the past decade. Using a large newly available panel data set and statistical matching techniques, we analyse the effects of marginal employment on future individual outcome variables such as unemployment, regular employment and earnings. In addition to average treatment effects, we calculate dynamic and cumulative treatment effects accounting for total time spent in various labor market states and related earnings over a period of three years. We find that marginal employment (i) does not affect time spent in regular employment within a three-years' observation period, (ii) reduces future unemployment, (iii) slightly increases cumulated future earnings, on average, and (iv) is associated with a small negative cumulative earnings effect for older workers in west Germany.

Suggested Citation

  • Ronny Freier & Viktor Steiner, 2007. ""Marginal Employment": Stepping Stone or Dead End? Evaluating the German Experience," Discussion Papers of DIW Berlin 744, DIW Berlin, German Institute for Economic Research.
    • Handle: RePEc:diw:diwwpp:dp744
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    4. Kyyrä, Tomi & Arranz, José M. & García-Serrano, Carlos, 2019. "Does subsidized part-time employment help unemployed workers to find full-time employment?," Labour Economics, Elsevier, vol. 56(C), pages 68-83.
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    6. Andreas Kappeler & Andrés Fuentes Hutfilter, 2014. "Making Economic Growth more Socially Inclusive in Germany," OECD Economics Department Working Papers 1175, OECD Publishing.
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    More about this item

    Keywords

    Marginal employment; social security contributions; wage subsidies; labour market policy; evaluation of treatment effects;
    All these keywords.

    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • H43 - Public Economics - - Publicly Provided Goods - - - Project Evaluation; Social Discount Rate
    • C35 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions

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