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Wage subsidies for needy job-seekers and their effect on individual labour market outcomes after the German reforms

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Author Info
Bernhard, Sarah () (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany])
Gartner, Hermann () (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany])
Stephan, Gesine () (Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany])

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Abstract

"In Germany, since 2005 needy job-seekers without access to earnings-related and insurance-paid 'unemployment benefit I' are entitled to means-tested and tax-funded 'unemployment benefit II'. Several active labour market programmes support the integration of these needy job-seekers into the labour market. Our paper estimates the average effect of targeted wage subsidies - paid to employers for a limited period of time - on the subsequent labour market prospects of participating needy job-seekers. We apply propensity score matching to compare participants with a group of similar non-participants. The results show that wage subsidies had in fact large and significant favourable effects: 20 months after taking up a subsidised job, the share of persons in regular employment is nearly 40 percentage points higher across participants. Estimated effects on the shares not unemployed and the share no longer receiving 'unemployment benefit II' are slightly smaller." (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 200821.

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Length: 27 pages
Date of creation: 21 May 2008
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Handle: RePEc:iab:iabdpa:200821

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Related research
Keywords: Arbeitslosengeld II-Empfänger Eingliederungszuschuss - Erfolgskontrolle Arbeitsmarktchancen

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Find related papers by JEL classification:
J68 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Public Policy
J64 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Unemployment: Models, Duration, Incidence, and Job Search
J65 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - Unemployment Insurance; Severance Pay; Plant Closings

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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  7. Stephan, Gesine & Zickert, Kathi, 2008. "Participation of unemployment benefit recipients in active labor market programs : before and after the German labor market reforms," IAB Discussion Paper 200815, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]. [Downloadable!]
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  13. Jaenichen, Ursula & Stephan, Gesine, 2007. "The effectiveness of targeted wage subsidies for hard-to-place workers," IAB Discussion Paper 200716, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany]. [Downloadable!]
  14. Boockmann, Bernhard & Zwick, Thomas & Ammermüller, Andreas & Maier, Michael, 2007. "Do hiring subsidies reduce unemployment among the elderly? Evidence from two natural experiments," ZEW Discussion Papers 07-001, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research. [Downloadable!]
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