ABSTRACT
This chapter explains the "passivating" welfare policy pursued in Austria. Intending to be "social", policy strives to increase subsidies to low-income groups, and softens the conditions to get access to pension and health insurance. In the European Union, where labour mobility is substantial and the principle of non-discrimination is not negotiable, effects are further reinforced by migrating workers, which can directly enter the social system of a country. The chapter focuses on the firms' interest to offer part-time jobs. It is shown that they can save wage costs by splitting up full-time into part-time jobs. A series of tax reforms has resulted in high marginal tax rates for individuals above an income limit of about 1,200 € a month. Thereby, workers get a strong incentive to substitute working time by leisure time, and a similar incentive is present for firms.
