Imposed Benefit Sanctions and the Unemployment-to-Employment Transition: The German Experience

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Imposed Benefit Sanctions and the Unemployment-to-Employment Transition: The German Experience

Author Info

Müller, Kai-Uwe () (DIW Berlin)
Steiner, Viktor () (DIW Berlin)

Abstract

We analyze the effect of imposed benefit sanctions on the unemployment-to-employment transition of unemployed people entitled to unemployment compensation on the basis of register data from the German Federal Employment Agency. We combine propensity score matching with a discrete-time hazard rate model which accounts for the dynamic nature of the treatment. We find positive short- and long-term effects of benefit sanctions which are robust for men and women in East and West Germany. The effects diminish with the elapsed unemployment duration until a sanction is imposed. The limited use of benefit sanctions can thus be an effective activation tool if they take place not too late in an individual’s unemployment spell.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 3483.

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Length: 32 pages
Date of creation: May 2008
Date of revision:
Handle: RePEc:iza:izadps:dp3483

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Find related papers by JEL classification:
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
H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household

This paper has been announced in the following NEP Reports:

NEP-ALL-2008-05-31 (All new papers)
NEP-EEC-2008-05-31 (European Economics)
NEP-LAB-2008-05-31 (Labour Economics)

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Kai-Uwe Müller, 2007. "Individual and regional determinants of receiving unemployment benefit sanctions in Germany," AStA Wirtschafts- und Sozialstatistisches Archiv, Springer, vol. 1(3), pages 275-286, December. [Downloadable!] (restricted)
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Other versions:
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Other versions:
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