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Should Welfare Administration be Centralized or Decentralized? Evidence from a Policy Experiment

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  • Bernhard Boockmann
  • Stephan L. Thomsen
  • Thomas Walter
  • Christian Göbel
  • Martin Huber

Abstract

type="main" xml:id="geer12021-abs-0001"> The 2005 reform of the German welfare system introduced two competing organizational models for welfare administration. In most districts, a centralized organization was established where local welfare agencies are bound to central directives. At the same time, 69 districts were allowed to opt for a decentralized organization. We evaluate the relative success of both types in terms of integrating welfare recipients into employment. Compared to centralized organization, decentralized organization has a negative effect on employment chances of males. For women, no significant effect is found. These findings are robust to the inclusion of aspects of internal organization common to both types of agencies.

Suggested Citation

  • Bernhard Boockmann & Stephan L. Thomsen & Thomas Walter & Christian Göbel & Martin Huber, 2015. "Should Welfare Administration be Centralized or Decentralized? Evidence from a Policy Experiment," German Economic Review, Verein für Socialpolitik, vol. 16(1), pages 13-42, February.
    • Handle: RePEc:bla:germec:v:16:y:2015:i:1:p:13-42
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    File URL: http://hdl.handle.net/10.1111/geer.2015.16.issue-1
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    References listed on IDEAS

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    1. W. Eichhorst & M. Grienberger-Zingerle & R. Konle-Seidl, 2008. "Activation Policies in Germany: From Status Protection to Basic Income Support," Springer Books, in: Werner Eichhorst & Otto Kaufmann & Regina Konle-Seidl (ed.), Bringing the Jobless into Work?, pages 17-67, Springer.
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    Cited by:

    1. Holzner, Christian & Munz, Sonja, 2013. "Should local public employment services be merged with local social benefit administrations?," Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 46(2), pages 83-102.
    2. Mergele, Lukas & Weber, Michael, 2020. "Public employment services under decentralization: Evidence from a natural experiment," Journal of Public Economics, Elsevier, vol. 182(C).
    3. Ohto Kanninen & Hannu Karhunen & Jeremias Nieminen, 2021. "Behavior and Effectiveness of Decentralized Employment Offices," Working Papers 332, Työn ja talouden tutkimus LABORE, The Labour Institute for Economic Research LABORE.
    4. Lukas Mergele, 2016. "Are there gains from decentralizing public employment offices?," Working Papers 2015020, Berlin Doctoral Program in Economics and Management Science (BDPEMS).
    5. Wolfgang Nagl & Michael Weber, 2016. "Stuck in a trap? Long-term unemployment under two-tier unemployment compensation schemes," ifo Working Paper Series 231, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.
    6. Lukas Mergele & Michael Weber & Michael Weber, 2020. "Job Center: Opting Municipalities Are Less Likely to Place the Unemployed in Employment," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 73(02), pages 39-44, February.
    7. Regina T. Riphahn & Christoph Wunder, 2016. "State dependence in welfare receipt: transitions before and after a reform," Empirical Economics, Springer, vol. 50(4), pages 1303-1329, June.
    8. Mergele, Lukas & Weber, Michael, 2020. "Public employment services under decentralization: Evidence from a natural experiment," Journal of Public Economics, Elsevier, vol. 182(C).
    9. Oliver Falck & Siegfried Schönherr, 2016. "An Economic Reform Agenda for Croatia: a comprehensive economic reform package prepared for the Croatian Statehood Foundation," ifo Forschungsberichte, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 70, October.
    10. Michael Weber, 2016. "The short-run and long-run effects of decentralizing public employment services," ifo Working Paper Series 209, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.

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    More about this item

    JEL classification:

    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search
    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models

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