@TechReport{iza:izadps:dp14248,
            	author={Galassi, Gabriela},
            	title={Labor Demand Response to Labor Supply Incentives: Lessons from the German Mini-Job Reform},
            	year={2021},
	month={Apr},
            	institution={Institute of Labor Economics (IZA)},
            	address={Bonn},
            	type={IZA Discussion Paper},
            	number={14248},
            	url={https://www.iza.org/index.php/publications/dp14248},
	abstract={This paper analyzes how firms respond to changes in tax benefits for low-earning workers and how such policies also affect high-earning workers. I explore establishment outcomes around Germany's 2003 Mini-Job Reform, which expanded tax benefits for low-earning workers. I document that highly exposed establishments–high proportion of low-earning workers–increase their employees relative to non-exposed establishments–low proportion of such workers. 
This relative expansion is tilted towards high-earning workers, not targeted by the tax benefits. Nonexposed establishments substitute employment towards low-earning workers without expanding at the same pace. My findings are consistent with a model in which employment growth the policy intended is accompanied by a reallocation of employment and production between highly exposed firms and non-exposed firms, resulting in an efficiency loss.},
	keywords={tax benefits;firm decisions;spillovers},
            }