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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. 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).
  2. Lechner, Michael & Miquel, Ruth & Wunsch, Conny, 2005. "Long-run effects of public sector sponsored training in West Germany," IAB Discussion Paper 200503, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
  3. Kraus, Florian & Puhani, Patrick A. & Steiner, Viktor, 1997. "Employment Effects of Publicly Financed Training Programs The East German Experience," ZEW Discussion Papers 97-33, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  4. Frölich, Markus & Lechner, Michael & Steiger, Heidi, 2003. "Statistically assisted programme selection - International experiences and potential benefits for Switzerland," Working Paper Series, IFAU - Institute for Evaluation of Labour Market and Education Policy 2004:1, IFAU - Institute for Evaluation of Labour Market and Education Policy.
  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. 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).
  7. Fitzenberger, Bernd & Speckesser, Stefan, 2005. "Employment Effects of the Provision of Specific Professional Skills and Techniques in Germany," IZA Discussion Papers 1868, Institute for the Study of Labor (IZA).
  8. 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.
  9. Eichler, Martin & Lechner, Michael, 1999. "An Evaluation of Public Employment Programmes in the East German State of Sachsen-Anhalt," IZA Discussion Papers 94, Institute for the Study of Labor (IZA).
  10. 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).
  11. Caliendo, Marco & Hujer, Reinhard & Thomsen, Stephan L., 2004. "Evaluation der Eingliederungseffekte von Arbeitsbeschaffungsmaßnahmen in reguläre Beschäftigung für Teilnehmer in Deutschland," ZEW Discussion Papers 04-46, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  12. Reinhard Hujer & Stephan Thomsen & Christopher Zeiss, 2006. "The effects of vocational training programmes on the duration of unemployment in Eastern Germany," AStA Advances in Statistical Analysis, Springer, vol. 90(2), pages 299-321, June.
  13. Lechner, Michael & Smith, Jeffrey, 2003. "What is the Value Added by Caseworkers?," CEPR Discussion Papers 3825, C.E.P.R. Discussion Papers.
  14. Michael Lechner, 2005. "Some practical issues in the evaluation of heterogeneous labour market programmes by matching methods," Labor and Demography, EconWPA 0505006, EconWPA.
  15. 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.
  16. Rajeev H. Dehejia & Sadek Wahba, 1998. "Propensity Score Matching Methods for Non-experimental Causal Studies," NBER Working Papers 6829, National Bureau of Economic Research, Inc.
  17. 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.
  18. 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.
  19. 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.
  20. Guido W. Imbens, 1999. "The Role of the Propensity Score in Estimating Dose-Response Functions," NBER Technical Working Papers 0237, National Bureau of Economic Research, Inc.
  21. 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 0647, Econometric Society.
  22. 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 7, Institute for the Study of Labor (IZA).
  23. 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.
  24. Kraus, Florian & Puhani, Patrick A. & Steiner, Viktor, 1998. "Do public works programs work? Some unpleasant results from the East German experience," ZEW Discussion Papers 98-07, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  25. 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.
  26. 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.
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