Under- And Overemployment in Germany: The Role of the Tax and Transfer System and Reform Options

Tasks

Within the project, the role of the tax and transfer system for discrete decisions (e.g., taking up employment in principle or changing from part-time to full-time employment) will be investigated. For this purpose, participation tax rates will be calculated, employment and work (time) volume developments will be documented, and reform options for improving incentive structures will be simulated, taking behavioral adjustments into account. The project consists of several modules.

Methods

Using the ifo microsimulation model, the project examines how changes in the tax and transfer system affect public budgets (i.e. tax revenues, social security revenues, payment of government transfers), individual incentives to work and employment development, as well as income distribution and numerous different household types.

Data and other sources

Socio-Economic Panel (SOEP) and Panel Labor Market and Social Security (PASS).