Abstract

The recent reform of jobs with reduced social security contributions (the so-called Minijobs) was associated with the expectation that such jobs could serve as a bridge into regular employment for unemployed workers. However, recent experiences with the reform cast substantial doubts on the potential of Minijobs in this regard. Hence, this article develops a proposal for an easily implementable, generous and temporary extension of the current regulation to provide an incentive for unemployed workers to take up such a Minijob. Our proposal is supplemented by an assessment of the expected labor market impact and a monetary cost-benefit analysis.