German Government Reforms for Mini- and Midi-Jobs Exacerbate Part-Time Trap for Women

The mini- and midi-job reform would make part-time jobs more financially attractive, and a good 80,000 more women would work in part-time jobs with few hours. At the same time, 40,000 women would give up their full-time jobs. Even after taking into account the positive employment effect associated with the planned tax relief, women’s working hours would still be reduced by the equivalent of 7,000 full-time positions. “The negative employment effects arise primarily from the combination of the existing tax splitting for marital couples and the expansion of tax- and contribution-free mini-jobs. With the planned reforms, the traffic light coalition thus fails to achieve its stated goal of not letting mini-jobs displace regular employment relationships and of helping people – especially women – avoid the part-time trap” Blömer says.

The government bill of February 23, 2022, provides for an increase in the mini-job earnings limit from EUR 450 to EUR 520 per month as well as for the redesign and expansion of the midi-job transition zone to EUR 1,600. In addition, tax relief is planned in the form of increases in the blanket allowance for business deductions from EUR 1,000 to EUR 1,200 per year and in the basic allowance from EUR 9,984 to EUR 10,347 per year. Blömer and coauthor Valentina Consiglio calculate the impact of these three reform elements on employment and the government budget.

Article (in German only): “Reform of Mini- and Midi-Jobs: Is the Traffic Light Coalition Exacerbating the Part-Time Trap?” by Maximilian Blömer and Valentina Consiglio, in ifo Schnelldienst 04/2022.