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The effect of unemployment benefit II sanctions on reservation wages

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  • Schneider, Julia

    (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany])

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    Abstract

    "In 2005, benefit sanctions in Germany were tightened with the introduction of the new means-tested unemployment benefit II (UB II), codified in Social Code (SC) II. This study analyzes the effect of benefit sanctions on the reservation wage of sanctioned unemployment benefit II recipients. The behavioral effect of a benefit sanction is an empirically open question. According to job search theory, benefit sanctions directly reduce reservation wages. To explore this hypothesis, propensity score matching is adopted. The dataset used is a unique survey of UB II recipients in the first year of SC II. For the identification of the effect, the study relies on the rich individual data and the rather unsystematic sanctioning process in the starting months after the introduction of the SC II. The timing of the sanction is explicitly considered by estimating the effects for the first four quarters of UB II receipt in 2005. The main result is that there was no significant effect of sanctions on the reservation wages of sanctioned unemployment benefit II recipients. A side result is that sanctioned UB II recipients were not more likely to be employed at the time of their interview either. Both results are robust to various matching estimators, estimation specifications and to the timing of the UB II sanction." (Author's abstract, IAB-Doku) ((en))

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    Paper provided by Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany] in its series IAB Discussion Paper with number 200819.

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    Length: 65 pages
    Date of creation: 23 Apr 2008
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    Handle: RePEc:iab:iabdpa:200819

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    Keywords: Arbeitslosengeld II-Empfänger; Leistungsbezug; Sanktion - Auswirkungen; Einkommenserwartung; Verhaltensänderung; Erwerbsverhalten; Arbeitsplatzsuchtheorie;

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    References

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    1. van den Berg, Gerard J & van der Klaauw, Bas & van Ours, Jan C, 2000. "Punitive Sanctions and the Transition Rate From Welfare to Work," CEPR Discussion Papers 2447, C.E.P.R. Discussion Papers.
    2. Lechner, Michael & Smith, Jeffrey, 2003. "What is the Value Added by Caseworkers?," CEPR Discussion Papers 3825, C.E.P.R. Discussion Papers.
    3. Abbring, Jaap H. & Berg, Gerard J. van den & Ours, Jan C. van, 1996. "The effect of unemployment insurance sanctions on the transition rate from unemployment to employment," Serie Research Memoranda 0038, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics.
    4. Berg, G.J. van den, 1987. "Nonstationarity in job search theory," Research Memorandum 242, Tilburg University, Faculty of Economics and Business Administration.
    5. Sianesi, Barbara, 2001. "An evaluation of the active labour market programmes in Sweden," Working Paper Series 2001:5, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    6. Lechner, Michael, 1999. "Earnings and Employment Effects of Continuous Off-the-Job Training in East Germany after Unification," Journal of Business & Economic Statistics, American Statistical Association, vol. 17(1), pages 74-90, January.
    7. Müller, Kai-Uwe, 2007. "Observed and unobserved determinants of unemployment insurance benefit sanctions in Germany: Evidence from matched individual and regional administrative data," Discussion Papers, Research Unit: Labor Market Policy and Employment SP I 2007-107, Social Science Research Center Berlin (WZB).
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    Cited by:
    1. Martin Huber & Michael Lechner & Conny Wunsch & Thomas Walter, 2009. "Do German Welfare-to-Work Programmes Reduce Welfare and Increase Work?," University of St. Gallen Department of Economics working paper series 2009 2009-03, Department of Economics, University of St. Gallen.
    2. 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].
    3. Caliendo, Marco & Hogenacker, Jens, 2012. "The German Labor Market after the Great Recession: Successful Reforms and Future Challenges," IZA Discussion Papers 6810, Institute for the Study of Labor (IZA).
    4. Boockmann, Bernhard & Osiander, Christopher & Stops, Michael & Verbeek, Hans, 2013. "Effekte von Vermittlerhandeln und Vermittlerstrategien im SGB II und SGB III (Pilotstudie) : Abschlussbericht an das IAB durch das Institut für Angewandte Wirtschaftsforschung e. V. (IAW), Tübingen," IAB-Forschungsbericht 201307, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    5. Kai-Uwe Müller & Viktor Steiner, 2008. "Imposed Benefit Sanctions and the Unemployment-to-Employment Transition: The German Experience," Discussion Papers of DIW Berlin 792, DIW Berlin, German Institute for Economic Research.
    6. Caliendo, Marco, 2009. "Income support systems, labor market policies and labor supply: the German experience," Working Paper Series 2009:26, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    7. Müller, Kai-Uwe & Steiner, Viktor, 2008. "Imposed Benefit Sanctions and the Unemployment-to-Employment Transition: The German Experience," IZA Discussion Papers 3483, Institute for the Study of Labor (IZA).

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