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Active Labour Market Policy in East Germany: Waiting for the Economy to Take Off

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  • Lechner, Michael

    ()
    (University of St. Gallen)

  • Wunsch, Conny

    ()
    (University of Basel)

Abstract

We investigate the effects of the most important East German active labour market programmes on the labour market outcomes of their participants. The analysis is based on a large and informative individual database coming from administrative data sources. Using matching methods, we find that over a horizon of 2.5 years after programme start the programmes fail to increase the employment chances of their participants in the regular labour market. However, the programmes may have other effects for their participants that may be considered important in the especially difficult situation experienced in the East German labour market.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 2363.

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Length: 47 pages
Date of creation: Oct 2006
Date of revision:
Publication status: published in: Economics of Transition, 2009, 17 (4), 661-702
Handle: RePEc:iza:izadps:dp2363

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Keywords: programme evaluation; causal effects; matching estimation; panel data;

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References

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  1. George A. Akerlof & Andrew K. Rose & Janet L. Yellen & Helga Hessenius, 1991. "East Germany in from the Cold: The Economic Aftermath of Currency Union," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 22(1), pages 1-106.
  2. Marco Caliendo & Reinhard Hujer & Stephan L. Thomsen, 2006. "Sectoral Heterogeneity in the Employment Effects of Job Creation Schemes in Germany," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), Justus-Liebig University Giessen, Department of Statistics and Economics, Justus-Liebig University Giessen, Department of Statistics and Economics, vol. 226(2), pages 139-179, March.
  3. Gerfin, Michael & Lechner, Michael, 2000. "Microeconometric Evaluation of the Active Labour Market Policy in Switzerland," IZA Discussion Papers 154, Institute for the Study of Labor (IZA).
  4. Michael Lechner & Ruth Miquel & Conny Wunsch, 2004. "Long-run Effects of Public Sector Sponsored Training in West Germany," University of St. Gallen Department of Economics working paper series 2004, Department of Economics, University of St. Gallen 2004-19, Department of Economics, University of St. Gallen.
  5. Lechner, Michael, 1999. "Identification and Estimation of Causal Effects of Multiple Treatments Under the Conditional Independence Assumption," IZA Discussion Papers 91, Institute for the Study of Labor (IZA).
  6. Schneider, Hilmar & Brenke, Karl & Kaiser, Lutz C. & Steinwede, Jacob & Jesske, Birgit & Uhlendorff, Arne, 2006. "Report No. 7: Evaluation der Maßnahmen zur Umsetzung der Vorschläge der Hartz-Kommission - Bericht 2005," IZA Research Reports, Institute for the Study of Labor (IZA) 7, Institute for the Study of Labor (IZA).
  7. Alberto Abadie & Guido W. Imbens, 2006. "Large Sample Properties of Matching Estimators for Average Treatment Effects," Econometrica, Econometric Society, Econometric Society, vol. 74(1), pages 235-267, 01.
  8. Eichler, Martin & Lechner, Michael, 2002. "An evaluation of public employment programmes in the East German State of Sachsen-Anhalt," Labour Economics, Elsevier, Elsevier, vol. 9(2), pages 143-186, April.
  9. Caliendo, Marco & Hujer, Reinhard & Thomsen, Stephan L., 2005. "The Employment Effects of Job Creation Schemes in Germany: A Microeconometric Evaluation," IZA Discussion Papers 1512, Institute for the Study of Labor (IZA).
  10. Fitzenberger, Bernd & Speckesser, Stefan, 2005. "Employment effects of the provision of specific professional skills and techniques in Germany," IAB Discussion Paper, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany] 200521, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
  11. Joffe, Marshall M. & Ten Have, Thomas R. & Feldman, Harold I. & Kimmel, Stephen E., 2004. "Model Selection, Confounder Control, and Marginal Structural Models: Review and New Applications," The American Statistician, American Statistical Association, American Statistical Association, vol. 58, pages 272-279, November.
  12. Guido W. Imbens, 1999. "The Role of the Propensity Score in Estimating Dose-Response Functions," NBER Technical Working Papers, National Bureau of Economic Research, Inc 0237, National Bureau of Economic Research, Inc.
  13. Michael Lechner & Jeffrey Smith, 2003. "What is the Value Added by Caseworkers?," University of Western Ontario, CIBC Centre for Human Capital and Productivity Working Papers, University of Western Ontario, CIBC Centre for Human Capital and Productivity 20031, University of Western Ontario, CIBC Centre for Human Capital and Productivity.
  14. Michael Lechner, 2002. "Program Heterogeneity And Propensity Score Matching: An Application To The Evaluation Of Active Labor Market Policies," The Review of Economics and Statistics, MIT Press, vol. 84(2), pages 205-220, May.
  15. Hujer, Reinhard & Thomsen, Stephan L. & Zeiss, Christopher, 2004. "The Effects of Vocational Training Programmes on the Duration of Unemployment in Eastern Germany," IZA Discussion Papers 1117, Institute for the Study of Labor (IZA).
  16. 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, Department of Economics, University of St. Gallen 2005-06, Department of Economics, University of St. Gallen.
  17. Markus Frölich & Michael Lechner & Heidi Steiger, 2003. "Statistically Assisted Programme Selection - International Experiences and Potential Benefits for Switzerland," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), Swiss Society of Economics and Statistics (SSES), vol. 139(III), pages 311-331, September.
  18. Bergemann, Annette & Fitzenberger, Bernd & Speckesser, Stefan, 2005. "Evaluating the Dynamic Employment Effects of Training Programs in East Germany Using Conditional Difference-in-Differences," IZA Discussion Papers 1848, Institute for the Study of Labor (IZA).
  19. Michael Lechner, 2000. "Programme Heterogeneity and Propensity Score Matching: An Application to the Evaluation of Active Labour Market Policies," Econometric Society World Congress 2000 Contributed Papers, Econometric Society 0647, Econometric Society.
  20. Caliendo, Marco & Hujer, Reinhard & Thomsen, Stephan L., 2004. "Evaluation der Eingliederungseffekte von Arbeitsbeschaffungsmaßnahmen in reguläre Beschäftigung für Teilnehmer in Deutschland," ZEW Discussion Papers, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research 04-46, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  21. Florian Kraus & Patrick Puhani & Viktor Steiner, 1999. "Employment Effects of Publicly Financed Training Programs - The East German Experience," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), Justus-Liebig University Giessen, Department of Statistics and Economics, Justus-Liebig University Giessen, Department of Statistics and Economics, vol. 219(1+2), pages 216-248, July.
  22. Fitzenberger, Bernd & Prey, Hedwig, 2000. "Evaluating Public Sector Sponsored Training in East Germany," Oxford Economic Papers, Oxford University Press, vol. 52(3), pages 497-520, July.
  23. Michael Lechner, 2002. "Some practical issues in the evaluation of heterogeneous labour market programmes by matching methods," Journal of the Royal Statistical Society Series A, Royal Statistical Society, Royal Statistical Society, vol. 165(1), pages 59-82.
  24. Rajeev H. Dehejia & Sadek Wahba, 2002. "Propensity score matching methods for non-experimental causal studies," Discussion Papers, Columbia University, Department of Economics 0102-14, Columbia University, Department of Economics.
  25. 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, American Statistical Association, vol. 17(1), pages 74-90, January.
  26. Kraus, Florian & Puhani, Patrick A. & Steiner, Viktor, 1998. "Do public works programs work? Some unpleasant results from the East German experience," ZEW Discussion Papers, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research 98-07, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
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