We present a model that integrates the discrete working time choice of heterogenous households into a general equilibrium setting where wages are determined by sectoral bargaining between firms and trade unions. The model is calibrated to German micro and macro data. We then use it to analyse a...

"Labour market reforms that are designed to stimulate labour supply at the lower end of the wage distribution can never be precisely restricted to affect only the target group. Spillovers to and feedback from other segments of the labour market are unavoidable and may counteract the direct...

"The legal provisions regarding marginal part-time employment relationships were fundamentally altered for the second time in four years on 1 April 2003. Key components of the 2003 reform are the increase in the limit of what constitutes a marginal part-time job from EURO 325 to EURO 400...

Nickell and Layard (1999) conclude that "[t]here appear to be no differential tax effects on unemployment but there is evidence that overall labor tax rates do influence labor costs in the long run and hence raise unemployment." This paper asks whether this conclusion still holds, by approaching...