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Short- and Long-term Ex-Post Effects of Unemployment Insurance Sanctions: Evidence from West Germany

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  • Hofmann Barbara

    (Institut für Arbeitsmarkt- und Berufsforschung (IAB) der Bundesagentur für Arbeit (BA), Regensburger Straße 104, 90478 Nürnberg, Germany)

Abstract

Unemployment insurance (UI) benefit sanctions in form of benefit reductions are intended to set an incentive to comply with job search requirements and to decrease moral hazard behaviour. However, sanctions might also affect the subsequent employment history. Empirical research on long-term effects is scarce. Using administrative data, we investigate short- and long-term effects of sanctions on the reemployment probability of individuals in West Germany who entered UI benefit receipt between April 2000 and March 2001. As outcomes we consider regular employment, other employment, and having dropped out of the registered labour market. By applying a matching approach that takes the timing of treatment into account, we identify the ex post effect of UI sanctions. According to our results, sanctions are effective in increasing the probability of regular employment for young sanctioned UI benefit recipients. Older women on average respond to a sanction by taking up jobs of lower quality. For both women and men, we find an increased number of months out of the official work force after a sanction.

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  • Hofmann Barbara, 2012. "Short- and Long-term Ex-Post Effects of Unemployment Insurance Sanctions: Evidence from West Germany," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 232(1), pages 31-60, February.
    • Handle: RePEc:jns:jbstat:v:232:y:2012:i:1:p:31-60
    DOI: 10.1515/jbnst-2012-0105
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    2. Krebs, Tom & Scheffel, Martin, 2016. "Structural reform in Germany," Working Papers 16-05, University of Mannheim, Department of Economics.
    3. Barbara Hofmann, 2014. "Sick of being “Activated?”," Empirical Economics, Springer, vol. 47(3), pages 1103-1127, November.
    4. Hohenleitner, Ingrid & Hillmann, Katja, 2019. "Impact of welfare sanctions on employment and benefit receipt: Considering top-up benefits and indirect sanctions," HWWI Research Papers 189, Hamburg Institute of International Economics (HWWI).
    5. Krebs, Tom & Scheffel, Martin, 2016. "Quantifizierung der gesamtwirtschaftlichen Effekte ausgewählter Reformvorschläge der Studie "Reforms, Investment and Growth: An Agenda for France, Germany and Europe"," Working Papers 16-04, University of Mannheim, Department of Economics.
    6. Bernhard Boockmann & Christopher Osiander & Michael Stops, 2014. "Vermittlerstrategien und Arbeitsmarkterfolg – Evidenz aus kombinierten Prozess- und Befragungsdaten [Caseworkers’ strategies and clients’ labor market outcomes]," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 47(4), pages 341-360, December.
    7. Schmieder, Johannes F & Trenkle, Simon, 2020. "Disincentive effects of unemployment benefits and the role of caseworkers," Journal of Public Economics, Elsevier, vol. 182(C).
    8. Hofmann, Barbara & Köhler, Markus, 2013. "New register data from the German public employment service on counseling and monitoring the unemployed," FDZ Methodenreport 201309_en, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    9. Rainer Eppel & Helmut Mahringer, 2019. "Getting a lot out of a little bit of work? The effects of marginal employment during unemployment," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 46(2), pages 381-408, May.
    10. Wolff, Joachim & Moczall, Andreas, 2012. "Übergänge von Alg-II-Beziehern in die erste Sanktion : Frauen werden nur selten sanktioniert," IAB-Forschungsbericht 201211, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    11. Laporšek Suzana & Vodopivec Milan & Vodopivec Matija, 2022. "Activation programs for unemployment benefit recipients in Slovenia," Review of Economic Perspectives, Sciendo, vol. 22(1), pages 75-95, June.

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