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Before and After the Hartz Reforms: The Performance of Active Labour Market Policy in Germany

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  • Jacobi, Lena

    ()
    (RWI)

  • Kluve, Jochen

    ()
    (Humboldt University Berlin, RWI)

Abstract

Having faced high unemployment rates for more than a decade, the German government implemented a comprehensive set of labour market reforms during the period 2003-2005. This paper describes the economic and institutional context of the German labour market before and after these so-called Hartz reforms. Focussing on active policy measures, we delineate the rationale for reform and its main principles. As results of programme evaluation studies post-reform have become available just now, we give a first assessment of the effectiveness of key elements of German ALMP before and after the Hartz reforms. The evidence indicates that the re-organisation of public employment services was mainly successful, with the exception of the outsourcing of services. Re-designing training programmes seems to have improved their effectiveness, while job creation schemes continue to be detrimental for participants' employment prospects. Wage subsidies and start-up subsidies show significantly positive effects. On balance, therefore, the reform seems to be moving the German labour market in the right direction.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 2100.

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Length: 32 pages
Date of creation: Apr 2006
Date of revision:
Publication status: published in: Journal for Labour Market Research / Zeitschrift für Arbeitsmarktforschung, 2007, 40 (1), 45-64
Handle: RePEc:iza:izadps:dp2100

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Keywords: programme evaluation; Active Labour Market Policy; labour market reform;

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References

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  13. Conny Wunsch, 2005. "Labour Market Policy in Germany: Institutions, Instruments and Reforms since Unification," University of St. Gallen Department of Economics working paper series 2005 2005-06, Department of Economics, University of St. Gallen.
  14. Eichler, Martin & Lechner, Michael, 2002. "An evaluation of public employment programmes in the East German State of Sachsen-Anhalt," Labour Economics, Elsevier, vol. 9(2), pages 143-186, April.
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  16. Hagen, Tobias, 2003. "Three Approaches to the Evaluation of Active Labour Market Policy in East Germany Using Regional Data," ZEW Discussion Papers 03-27, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  17. Michael Lechner, 2000. "An Evaluation of Public-Sector-Sponsored Continuous Vocational Training Programs in East Germany," Journal of Human Resources, University of Wisconsin Press, vol. 35(2), pages 347-375.
  18. Eva Reinowski & Birgit Schultz & Jürgen Wiemers, 2003. "Evaluation von Maßnahmen der aktiven Arbeitsmarktpolitik mit Hilfe eines iterativen Matching-Algorithmus - Eine Fallstudie über langzeitarbeitslose Maßnahmeteilnehmer in Sachsen," IWH Discussion Papers 173, Halle Institute for Economic Research.
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