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We analyze the labor supply and income effects of a needs-based minimum benefit system ("Bedarfsorientierte Mindestsicherung") to be introduced in Austria by the end of this/beginning of next year. The aim of this reform is to reduce poverty as well as increasing employment rates of recipients...
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and full-time work, respectively. We estimate labor supply reactions and welfare effects using a microsimulation model … that provides improved incentives to work full-time has negligible effects on overall labor supply. With equal welfare … weights, aggregate welfare gains are realizable under all three reforms. …
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Generous income support programs as provided by European welfare states have often been blamed to hamper employment …
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