Date of Award

Spring 2021


MS - Economics


Thomas Masterson, Ph.D.


The Austrian labor market has experienced high rates of involuntary unemployment for several years, and the COVID-19 pandemic has likely exacerbated the problem. Part-time employment rates, especially high for women, have fed into time-related underemployment. Many people have left the labor force wanting to work. Aside from the short-lived Aktion 20,000 program, labor market policies have been ineffective in addressing these issues. A different, more promising approach is the job guarantee. In a job guarantee, the state acts as an employer-of-last resort, granting everyone willing to work the right to a job at a minimum wage. This thesis argues that a job guarantee is an effective and equitable policy to reach full employment, reduce poverty, and reduce income inequality in Austria. Applying a microsimulation approach, three benchmark scenarios are estimated using survey data from EU-SILC 2019, the Austrian labor force survey, and registry data from the Public Employment Service (Arbeitsmarktservice, AMS). In the simulation, between 169,460 and 613,483 people join the program, depending on eligibility criteria. A job guarantee is found to have large and significant impacts on the share of people at risk of poverty in Austria, decreasing the overall headcount ratio by 10.8 to 29.0 percent. Among job guarantee participants, the share of people at risk of poverty in the different benchmark scenarios drops from a range of 37.9 to 47.9 percent to a range of 4.3 to 19.3 percent. Income inequality measured by the Gini coefficient is found to decrease from 0.346 to between 0.335 and 0.341. The thesis offers suggestions for a just and equitable implementation of a job guarantee policy in Austria. Type of jobs, a participatory democratic implementation process, perspectives on gender-sensitive policy design, and ideas for the administration of the program are provided. The net costs of the different scenarios are estimated at 0.9 to 3.7 percent of 2020 GDP, not including multiplier effects.

Access Control

Open Access

Included in

Economics Commons