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Do German Welfare-to-Work Programmes Reduce Welfare and Increase Work?

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Author Info

  • Huber, Martin

    ()
    (University of St. Gallen)

  • Lechner, Michael

    ()
    (University of St. Gallen)

  • Wunsch, Conny

    ()
    (University of Basel)

  • Walter, Thomas

    ()
    (ZEW Mannheim)

Abstract

Many Western economies have reformed their welfare systems with the aim of activating welfare recipients by increasing welfare-to-work programmes and job search enforcement. We evaluate the three most important German welfare-to-work programmes implemented after a major reform in January 2005 ("Hartz IV"). Our analysis is based on a unique combination of large scale survey and administrative data that is unusually rich with respect to individual, household, agency level, and regional information. We use this richness to allow for a selection-on-observables approach when doing the econometric evaluation. We find that short-term training programmes on average increase their participants' employment perspectives and that all programmes induce further programme participation. We also show that there is considerable effect heterogeneity across different subgroups of participants that could be exploited to improve the allocation of welfare recipients to the specific programmes and thus increase overall programme effectiveness.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 4090.

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Length: 42 pages
Date of creation: Mar 2009
Date of revision:
Publication status: published as 'Do German Welfare-to-Work Programmes Reduce Welfare Dependency and Increase Employment?' in: German Economic Review, 2011, 12 (2), 182-204
Handle: RePEc:iza:izadps:dp4090

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Keywords: panel data; welfare-to-work policies; propensity score matching; targeting; programme evaluation;

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References

References listed on IDEAS
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Citations

Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. Welfare-to-work programs work, sort of
    by Economic Logician in Economic Logic on 2009-04-27 14:00:00
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
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Cited by:
  1. Stephan L. Thomsen & Thomas Walter, 2010. "Temporary Extra Jobs for Immigrants: Merging Lane to Employment or Dead‐End Road in Welfare?," LABOUR, CEIS, CEIS, vol. 24(s1), pages 114-140, December.
  2. Annette Bergemann & Marco Caliendo & Gerard J. van den Berg & Klaus F. Zimmermann, 2011. "The threat effect of participation in active labor market programs on job search behavior of migrants in Germany," International Journal of Manpower, Emerald Group Publishing, Emerald Group Publishing, vol. 32(7), pages 777-795, November.
  3. Wolff, Joachim & Hohmeyer, Katrin, 2011. "Direct job creation revisited: Is it effective for welfare recipients and does it matter whether participants receive a wage?," Annual Conference 2011 (Frankfurt, Main): The Order of the World Economy - Lessons from the Crisis 48722, Verein für Socialpolitik / German Economic Association.
  4. Bernhard Boockmann & Stephan Thomsen & Thomas Walter, 2011. "Aktivierung der erwerbsfähigen Hilfebedürftigen mit arbeitsmarktpolitischen Maßnahmen – Wer wird gefördert?," AStA Wirtschafts- und Sozialstatistisches Archiv, Springer, Springer, vol. 4(4), pages 269-292, January.
  5. John P. Haisken-DeNew & Matthias Vorell, 2009. "Killing them with Kindness: Negative Distributional Externalities of Increasing UI Benefits," Ruhr Economic Papers, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen 0121, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
  6. Christian Hohendanner, 2011. "Ein-Euro-Jobs und regulaere Beschaeftigung," 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. 231(2), pages 210-246, April.
  7. Aldashev, Alisher & Thomsen, Stephan L. & Walter, Thomas, 2010. "Short-term training programs for immigrants: do effects differ from natives and why?," ZEW Discussion Papers, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research 10-021, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  8. Zabel, Cordula, 2013. "Effects of participating in skill training and workfare on employment entries for lone mothers receiving means-tested benefits in Germany," IAB Discussion Paper 201303, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
  9. Schneider, Hilmar & Uhlendorff, Arne & Zimmermann, Klaus F., 2011. "Ökonometrie vs. Projektdesign: Lehren aus der Evaluation eines Modellprojekts zur Umsetzung des Workfare-Konzepts," IZA Discussion Papers 5599, Institute for the Study of Labor (IZA).

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