TY  - RPRT
        AU  - Brück, Tilman
AU  - New, John de
AU  - Zimmermann, Klaus F.
        TI  - Creating Low Skilled Jobs by Subsidizing Market-Contracted Household Work
        PY  - 2003/Dec/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 958
        UR  - https://www.iza.org/publications/dp958
        AB  - We analyze the determinants of household work contracted in the German shadow economy.
The German socio-economic household panel, which enumerates casual domestic
employment, is used to estimate the demand for such household work. The regressors
include regional wage rates, household income and several control variables for household
composition. We find that the demand for household work in the shadow economy is very
income elastic. This suggests that targeted wage subsidies, linked to household work
agencies, would be very effective in raising the legal demand for domestic help. A wage
subsidy of 50% of wage costs could thus establish up to 500,000 new jobs for previously
unemployed or non-working low skilled workers. The net fiscal costs of such a scheme are
about 6.200 Euro per full-time job. In addition, society benefits from more law enforcement
and from a raised female labor supply, especially by highly qualified mothers.
        KW  - labor demand
KW  - wage subsidy
KW  - household services
KW  - low skilled unemployment
KW  - shadow economy
KW  - GSOEP
        ER  -