Earnings exemptions for unemployed workers: The relationship between marginal employment, unemployment duration and job quality

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. The Institute for the Study of Labor (IZA) in Bonn is a local and virtual international research center and a place of communication between science, politics and business. IZA is an independent nonprofit organization supported by Deutsche Post Foundation. The center is associated with the University of Bonn and offers a stimulating research environment through its international network, workshops and conferences, data service, project support, research visits and doctoral program. IZA engages in (i) original and internationally competitive research in all fields of labor economics, (ii) development of policy concepts, and (iii) dissemination of research results and concepts to the interested public. Terms of use: Documents in D I S C U S S I O N P A P E R S E R I E S Earnings Exemptions forIZA Discussion Papers often represent preliminary work and are circulated to encourage discussion. Citation of such a paper should account for its provisional character. A revised version may be available directly from the author. In some countries including Germany unemployed workers can increase their income by working a few hours per week. The intention is to keep unemployed job seekers attached to the labour market and to increase their job-finding probabilities. To analyze the unemployment dynamics of job seekers with and without marginal employment, we consider an inflow sample into unemployment and estimate multivariate duration models. While we do not find any significant impact on the job finding probability in a model with homogeneous effects, models allowing for time-varying coefficients indicate a decreased job finding probability of marginal employment at the beginning of the unemployment spell and an increased job finding probability for the long-term unemployed. Our results suggest that job seekers with marginal employment find more stable post-unemployment jobs, and we find some evidence that the relationship between marginal employment and wages and employment stability varies with respect to skill levels, sector and labor market tightness.JEL Classification: J64, C41, C33

Minijobs nach Einführung des Mindestlohns – Eine Bestandsaufnahme

“…Hinsichtlich einer möglichen Brückenfunktion von Minijobs liefert die wissenschaftliche Literatur keine eindeutigen Aussagen, aber auch keine Evidenz für einen "Einsperr"-Effekt für Arbeitslose mit Minijob (Berthold/Coban, 2013a;Brülle, 2013;Caliendo et al, 2016;Dingeldey et al, 2012;Freier/Steiner, 2008). Trotzdem…”

Marginal employment for welfare recipients: stepping stone or obstacle?

“…Nonetheless, they find that marginally employed men subsequently spent less time in unemployment and have higher cumulative incomes. Caliendo et al (2012Caliendo et al ( , 2016 also do not find a positive effect of ME on regular employment for short-term unemployed men in the period 2001 to 2004. For long-term unemployed men, however, the probability of regular employment is higher for those who did take up a marginal job.…”

“…We find a clear‐cut trend of substantial employment effects for unemployed men and women who remain unemployed after entering UB‐II receipt for at least 4 or 5 months, whereas there are no unambiguous effects for individuals with shorter unemployment durations. These results are more or less in accordance with existing empirical evidence of the positive effects of ME for either unemployed individuals with higher unemployment duration (Caliendo et al ., , ) or a sample of long‐term unemployed UB‐II recipients (Lehmer, ). The analysis used newly available data for UB‐II recipients, thus enabling us to focus on a special group of unemployed men and women who should be equally likely to profit from ME.…”

“…For long-term unemployed men, however, the probability of regular employment is higher for those who did take up a marginal job. In addition, Caliendo et al (2012Caliendo et al ( , 2016 find that those with a preceding temporal marginal job are more likely to find stable regular employment. Lehmer (2012), who focuses on the effects of temporary agency work on long-term unemployed men and women, also provides results for the effects of ME for the period 2004 to 2008, finding that ME has a small positive effect for men but no effect for women.…”

The impact of participation in job creation schemes in turbulent times

“…This approach allows for a flexible covariance matrix for the unobserved heterogeneity. For similar strategies for modeling the unobserved heterogeneity, see for example Aitkin (1999), Crépon, Ferracci, Jolivet, and van den Berg (2010) and Caliendo, Künn, and Uhlendorff (2016). Our model selection with respect to the number of mass points is based on the bivariate duration model.…”