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

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Abstract

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 of organizations. Compared to centralized organization, decentralized organization of welfare administration has a negative effect on the transition of male welfare recipients to self-sufficient employment, but it does not affect employment in combination with continuing welfare support. No significant effects were found for women.

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File URL: http://www.iaw.edu/RePEc/iaw/pdf/iaw_dp_69.pdf
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Bibliographic Info

Paper provided by Institut für Angewandte Wirtschaftsforschung (IAW) in its series IAW Discussion Papers with number 69.

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Length: 43 pages
Date of creation: Dec 2010
Date of revision:
Handle: RePEc:iaw:iawdip:69

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Keywords: Welfare System; Organization; Decentralization; Labor Market Integration;

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  1. Eichhorst, Werner & Grienberger-Zingerle, Maria & Konle-Seidl, Regina, 2006. "Activation Policies in Germany: From Status Protection to Basic Income Support," IZA Discussion Papers 2514, Institute for the Study of Labor (IZA).
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Cited by:
  1. Christian Holzner & Sonja Munz, 2011. "Should Local Public Employment Services be Merged with the Local Social Benefit Administrations?," CESifo Working Paper Series 3472, CESifo Group Munich.

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