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We investigate the effect of the COVID-19 pandemic on self-employed people's mental health. Using representative longitudinal survey data from Germany, we reveal differential effects by gender: whereas self-employed women experienced a substantial deterioration in their mental health, self-employed men displayed no significant changes up to early 2021. Financial losses are important in explaining these differences. In addition, we find larger mental health responses among self-employed women who were directly affected by government-imposed restrictions and bore an increased childcare burden due to school and daycare closures. We also find that self-employed individuals who are more resilient coped better with the crisis. [ABSTRACT FROM AUTHOR]

This study quantifies the distributional effects of the minimum wage introduced in Germany in 2015. Using detailed Socio-Economic Panel survey data, we assess changes in the hourly wages, working hours, and monthly wages of employees who were entitled to be paid the minimum wage. We employ a difference-in-differences analysis, exploiting regional variation in the "bite" of the minimum wage. At the bottom of the hourly wage distribution, we document wage growth of 9% in the short term and 21% in the medium term. At the same time, we find a reduction in working hours, such that the increase in hourly wages does not lead to a subortionate increase in monthly wages. We conclude that working hours adjustments play an important role in the distributional effects of minimum wages. [ABSTRACT FROM AUTHOR]

While a growing body of literature finds positive impacts of Start-Up Subsidies (SUS) on labor market outcomes of participants, little is known about how the design of these programs shapes their effectiveness and hence how to improve policy. As experimental variation in program design is unavailable, we exploit the 2011 reform of the current German SUS program for the unemployed which strengthened caseworkers' discretionary power, increased entry requirements and reduced monetary support. We estimate the impact of the reform on the program's effectiveness using samples of participants and non-participants from before and after the reform. To control for time-constant unobserved heterogeneity as well as differential selection patterns based on observable characteristics over time, we combine Difference-in-Differences with inverse probability weighting using covariate balancing propensity scores. Holding participants' observed characteristics as well as macroeconomic conditions constant, the results suggest that the reform was successful in raising employment effects on average. As these findings may be contaminated by changes in selection patterns based on unobserved characteristics, we assess our results using simulation-based sensitivity analyses and find that our estimates are highly robust to changes in unobserved characteristics. Hence, the reform most likely had a positive impact on the effectiveness of the program, suggesting that increasing entry requirements and reducing support increased the program's impacts while reducing the cost per participant. [ABSTRACT FROM AUTHOR]

In 2015, Germany introduced a statutory hourly minimum wage that was not only universally binding but also set at a relatively high level. We discuss the shortrun effects of this new minimum wage on a wide set of socioeconomic outcomes, such as employment and working hours, earnings and wage inequality, dependent and selfemployment, as well as reservation wages and satisfaction. We also discuss difficulties in the implementation of the minimum wage and the measurement of its effects related to non-compliance and suitability of data sources. Two years after the minimum wage introduction, the following conclusions can be drawn: while hourly wages increased for low-wage earners, some small negative employment effects are also identifiable. The effects on aspired goals, such as poverty and inequality reduction, have not materialised in the short run. Instead, a tendency to reduce working hours is found, which alleviates the desired positive impact on monthly income. Additionally, the level of noncompliance was substantial in the short run, thus drawing attention to problems when implementing such a wide reaching policy. [ABSTRACT FROM AUTHOR]

Calculations based on data from the Socio-Economic Panel (SOEP) show that after the introduction of a statutory minimum wage in Germany in January 2015, the wage growth of eligible employees with low wages accelerated significantly. Before the reform, the nominal growth in contractual hourly wages in the lowest decile, the bottom tenth of the pay distribution, was less than two percent in the long-term two-year average, while from 2014 to 2016 it was around 15 percent. Nevertheless, in the first half of 2016, around 1.8 million employees who were eligible for the minimum wage of 8.50 euros gross per hour still earned contractual hourly wages below this level. In 2015, the count was approximately 2.1 million workers, and in the year before the introduction of the minimum wage, almost 2.8 million. The figures for 2015 and 2016 reported here are thus higher than corresponding figures from company surveys. Despite the disproportionate increase in wages in the lowest wage decile, many workers are still not earning the minimum wage. The objectives of the German Minimum Wage Act (Mindestlohngesetz) are often not being met, especially among the marginally employed. Instruments for better enforcement of the Minimum Wage Act include more frequent inspections, stricter sanctioning, more effective grievance procedures for workers, and stricter requirements for the documentation systems (especially timekeeping). [ABSTRACT FROM AUTHOR]

Standard job search theory assumes that unemployed individuals have perfect information about the effect of their search effort on the job offer arrival rate. We present an alternative model that assumes that each individual has a subjective belief about the impact of her search effort on the job arrival. These beliefs depend in part on an individual's locus of control. We estimate the impact of locus of control on job search behavior using a data set of newly unemployed individuals in Germany. Consistent with our theoretical predictions, we find evidence that individuals with an internal locus of control search more and that individuals who believe that their future outcomes are determined by external factors have lower reservation wages. [ABSTRACT FROM AUTHOR]

Abstract: This paper focuses on estimating the magnitude of any potential weight discrimination by examining whether obese job applicants in Germany get treated or behave differently from non-obese applicants. Based on two waves of rich survey data from the IZA Evaluation dataset, which includes measures that control for education, demographic characteristics, labor market history, psychological factors and health, we estimate differences in job search behavior and labor market outcomes between obese/overweight and normal weight individuals. Unlike other observational studies which are generally based on obese and non-obese individuals who might already be at different points in the job ladder (e.g., household surveys), in our data, individuals are newly unemployed and all start from the same point. The only subgroup we find in our data experiencing any possible form of negative labor market outcomes is obese women. Despite making more job applications and engaging more in job training programs, we find some indications that they experienced worse (or at best similar) employment outcomes than normal weight women. Obese women who found a job also had significantly lower wages than normal weight women. [Copyright &y& Elsevier]

Purpose -- This paper aims to analyze the role of social networks on the job search choices of the unemployed. If social networks convey useful information in the job search process, individuals with larger networks should experience a higher productivity of informal search channels. This in turn affects the choice of formal search intensity and the reservation wage. The paper seeks to test these search-theoretic implications of productive social networks empirically. Design/methodology/approach -- The authors use the IZA Evaluation Dataset containing detailed information on job search behavior of recently unemployed individuals. Observing a rich array of personality traits and direct measures of the social network, the authors choose an identification approach based on observable characteristics using least squares and binary probit regression analysis. Findings -- The findings confirm theoretical expectations. Individuals with larger networks use informal search channels more often and shift from formal to informal search. In addition to that, evidence is found for a positive relationship between network size and reservation wages. Research limitations/implications - The extent to which networks are used during job search most likely also depends on the quality of the network, which cannot be observed in the data. However, as the network significantly changes the observable formal job search effort of individuals, public job search monitoring policies should take these effects into account. Originality/value -- The paper complements the previous body of literature on the role of social networks in the labor market that predominantly focuses on labor market outcomes. By highlighting the interaction between networks and job search choices the paper improves the understanding of realized labor market outcomes in the presence of networks. [ABSTRACT FROM AUTHOR]

Purpose -- Labor market programs may affect unemployed individuals' behavior before they enroll. The aim of this paper is to study whether such ex ante effects differ according to ethnic origin. Design/methodology/approach -- The authors apply a method that relates self-reported perceived treatment rates and job search behavioral outcomes, such as the reservation wage or search intensity, to each other. German native workers are compared with migrants with a Turkish origin or Central and Eastern European (including Russian) background. Job search theory is used to derive theoretical predictions. The ex ante effect of the German active labor market program (ALMP) system is examined using the novel IZA Evaluation Data Set which includes self-reported assessments of the variables of interest as well as an unusually detailed amount of information on behavior, attitudes and past outcomes. Findings -- It is found that the ex ante threat effect on the reservation wage and search effort varies considerably among the groups considered. Originality/value -- The study is the first to investigate whether migrants and natives react similarly to the expectation of participating in an ALMP, and whether migrants of different regions of origin react similarly or not. [ABSTRACT FROM AUTHOR]

Purpose -- This paper aims to present the IZA Evaluation Dataset, a newly created data source allowing for the evaluation of active labor market policies in Germany. Design/methodology/approach -- The paper's approach is a description of the sampling and contents of the IZA Evaluation Dataset and an outline of its research potential. Findings -- The evaluation of active labor market policies is often confronted with a lack of adequate empirical data. The IZA Evaluation Dataset may serve as a role model for the provision of such data. Research limitations/implications -- The scope of active labor market policy instruments that can be analyzed with the IZA Evaluation Dataset is mainly restricted to measures for unemployed individuals. Originality/value -- In recent years, many countries have opened their administrative databases for evaluation studies. However, information that might be relevant for economic modeling is often absent. The IZA Evaluation Dataset aims to overcome such limitations for Germany by complementing administrative data from the Federal Employment Agency with innovative survey data. [ABSTRACT FROM AUTHOR]

Abstract: Risk attitudes influence the complete life cycle of entrepreneurs. Whereas recent research underpins the theoretical proposition of a positive correlation between risk attitudes and the decision to become self-employed, the effects on survival are not as straightforward. Psychological research posits an inverse U-shaped relationship between risk attitudes and entrepreneurial survival. On the basis of experimentally validated data of the German Socio-Economic Panel (SOEP), we examine the extent to which risk attitudes influence survival rates in self-employment in Germany. The empirical results confirm that persons whose risk attitudes are in the medium range survive significantly longer as entrepreneurs than do persons with particularly low or high risk attitudes. [ABSTRACT FROM AUTHOR]

Increasing work incentives for people with low income is a common topic in the policy debate across European countries. The 'Mini-Job' reform in Germany had a similar motivation. We carry out an ex-post evaluation to identify the short-run effects of this reform. Our identification strategy uses an exogenous variation in the interview months in the Socio-Economic Panel Study (SOEP), which allows us to distinguish groups that are affected by the reform from those who are not. To account for seasonal effects we additionally use a Difference-In-Differences (DID) strategy. Descriptives show that there is a post-reform increase in the number of mini-jobs. However, we show that this increase cannot be causally related to the reform, since the short-run effects are very limited. Only single men seem to react immediately and increase secondary job holding. [ABSTRACT FROM AUTHOR]

Fostering and supporting start-up businesses by unemployed persons has become an increasingly important issue in many European countries. These new ventures are being subsidized by various governmental programs. Empirical evidence on skill-composition, direct job creation and other key variables is rather scarce, largely because of inadequate data availability. We base our analysis on unique survey data containing a representative sample of over 3,100 start-ups founded by unemployed persons in Germany and subsidized under two different schemes: the bridging allowance ( BA) and the start-up-subsidy ( SUS). We are able to draw on extensive pre- and post-founding information concerning the characteristics of the business (start-up capital, industry, etc.) and of the business founders (education, motivation, preparation, etc.). Our main results are: (1) The two programs attracted very different business founders (higher skilled for the BA, more female persons for the SUS), and different businesses were created (less capital intensive for the SUS). (2) We find that formerly unemployed founders are motivated by push and pull factors. (3) Survival rates 2.5 years after business founding are quite high (around 70%) and similar for both programs and across gender. (4) However, the newly developed businesses differ significantly in terms of direct employment effects. While around 30% of the founders with the BA already have at least one employee, this is true for roughly 12% of the founders with the SUS. [ABSTRACT FROM AUTHOR]

This paper empirically analyzes the labor supply effects of two “making work pay” reforms in Germany. We provide evidence in favor of policies that distinguish between low effort and low productivity by targeting individuals with low wages rather than those with low earnings. We discuss our results more generally and with comparisons to the family-based tax credits in force in the US and the UK. For the evaluation of the policies, we apply a static structural labor supply framework and explicitly account for demand-side constraints by using a double-hurdle model. [ABSTRACT FROM AUTHOR]

Purpose -- The purpose of the paper is to estimate the effectiveness of two start-up programs (bridging allowance and start-up subsidy) in East Germany. Design/methodology/approach -- Using a combination of administrative data from the Federal Employment Agency and a follow-up survey (for roughly 1,300/1,000 participants/non-participants), the analysis is based on the conditional independence assumption. Kernel matching estimators are applied to estimate the treatment effects and test the sensitivity of the results using a conditional difference-in-differences approach. Findings -- At the end of the observation period both programs are effective: unemployment rates of participants are lower, and employment rates and personal income are higher when compared to non-participants. Additionally, first descriptive evidence of the additional employment effects through direct job creation is presented, which is quite significant for the bridging allowance and negligible for participants in the start-up subsidy. Research limitations/implications -- Participants in the start-up subsidy are in their third year of participation at the end of the observation period and mostly still receive further support (although at a reduced rate). Therefore, the results for this program have to be treated as preliminary. Practical implications -- In contrast to other active labor market programs that have been evaluated recently (including job-creation schemes and vocational training programs) this paper finds considerable positive effects for start-up subsidies. Hence, programs aimed at turning the unemployed into entrepreneurs may be a promising strategy in East Germany. Originality/value -- This is one of the first studies that allows inferences to be drawn about the effectiveness of start-up programs in East Germany. Most previous studies on the effectiveness of active labour market policies in the Eastern part of Germany neglected these programs. [ABSTRACT FROM AUTHOR]

This article extends previous research about the determinants of reservation wages by analysing the effect of progressive income taxation on the ratio between reservation and net market wages. Based on micro data for Germany Socio-Economic-Panel (SOEP) we show that joint income taxation in Germany which discriminates by marital status, has a strong and highly significant impact on the reservation/market wage ratio. Relative to single filers, this leads to strong negative labour supply incentives for secondary earners and to positive incentives for first earners in married couples. [ABSTRACT FROM AUTHOR]

Turning unemployment into self-employment has become a major focus of German active labour market policy (ALMP) in recent years. If effective, this would not only reduce Germany's persistently high unemployment rate, but also increase its notoriously low self-employment rate. Empirical evidence on the effectiveness of such programmes is scarce. We evaluate the effectiveness of two start-up programmes for the unemployed, where we include the probability of being employed, the probability of being unemployed and personal income as outcome variables. Our results show that at the end of the observation period, both programmes are effective. The considerable positive effects present a stark contrast to findings from evaluations of other German ALMP programmes in recent years. Hence, ALMP programmes aimed at moving the unemployed into self-employment may prove to be among the most effective, both in Germany and elsewhere. [ABSTRACT FROM AUTHOR]

Previous empirical studies of job creation schemes (JCS) in Germany have shown that the average effects for the participating individuals are negative. However, we find that this is not true for all strata of the population. Identifying individual characteristics that are responsible for the effect heterogeneity and using this information for a better allocation of individuals therefore bears some scope for improving programme efficiency. We present several stratification strategies and discuss the occurring effect heterogeneity. Our findings show that JCS do neither harm nor improve the labour market chances for most of the groups. Exceptions are long-term unemployed men in West and long-term unemployed women in East and West Germany who benefit from participation in terms of higher employment rates. [ABSTRACT FROM AUTHOR]