Abstract
Using a microsimulation model based on representative panel data, we analyze the outcomes of three major means-tested interdependent benefit programs that are available for low-income households in Germany with respect to benefit take-up and labor supply incentives. The results show a distinct overlap between the programs and high rates of non-take-up, indicating that the effectiveness of the programs in reaching their target groups could be improved. Furthermore, we find that workers from low-income households are confronted with a complex benefit structure and high marginal tax rates, which negatively affects the individual labor supply.
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